Tech stocks have seen a good start to 2023, with the Nasdaq Composite up more than 7% year to date. But while that performance is nice, what matters more is the future. After all, investors should always be looking for stocks to buy now that can be held for the long run.

In my view, CrowdStrike (CRWD -0.40%) and PayPal (PYPL 1.35%) are tech sector growth stocks with clear tailwinds that investors should consider buying in 2023.


CrowdStrike is a cloud-native cybersecurity company that uses artificial intelligence and machine learning to stop security breaches. The benefit for its customers is that once a security breach is patched for one of its clients, the entire network of CrowdStrike users gets patched against that threat as well. Its whole platform is constantly learning and improving.

The company's customer base has expanded rapidly. In its fiscal 2023, which ended Jan. 31, the number of customers grew 41%, and over the past four years, its customer base has increased by 815%. It's also attracting some of the biggest companies in the world; 70% of the Fortune 100 are CrowdStrike customers.

Those customers are also spending more with it over time. Since the first quarter of its fiscal 2018, the company's dollar-based net retention rate has only slipped below 120% three times, and has been as high as 147%. Additionally, 62% of its customers subscribe to five or more of its product offerings, known as modules.

There's reason to believe this growth can continue. At its IPO, CrowdStrike saw its total addressable market as $25 billion. The company believes that will expand to $98 billion by 2025 and has the potential to reach $158 billion by 2026. 


PayPal has built itself up to be a leader in the digital payments space. When it comes to peer-to-peer payments or online purchasing, its products are top of mind for many consumers. For many years, PayPal was fueled by strong growth in active accounts. In 2015, it had 181 million active accounts. By 2019, that figure had grown 69% to 305 million. From 2019 through 2022, active accounts only grew 43%. Still impressive, but slowing.

Recently, PayPal's management stated while they are still pursuing active account growth, their focus would be shifting to improving how the company serves existing users and increasing engagement. One way the company has done this is through its "buy now, pay later" service, which it launched in 2020. This past year saw strong growth for "buy now, pay later." Transaction volume increased by 160%, and its customer count grew by 105% over 2021. 

PayPal margins and profitability have also improved recently. Operating margin improved in each of the past three quarters, and non-GAAP EPS increased 11% year over year in Q4. Improved efficiencies have allowed PayPal to increase its share repurchases in each of the past three years, resulting in a reduction of shares outstanding by 3.5%. PayPal plans to spend around 75% of its 2023 free cash flow on share repurchases. 

The bottom line for investors

The valuations of both CrowdStrike and PayPal have fallen significantly over the past few years. At the time of this writing, both companies' price-to-sales ratios are near their five-year lows. CrowdStrike is still in hyper-growth mode and faces an expanding market opportunity. PayPal could see slower user and revenue growth, but as it improves its profitability and continues to buy back stock, its shareholders should benefit. 

Taking into consideration their current valuations, market positions, and opportunities for further expansion, both stocks seem to offer good balances of risk vs. potential reward now.