It's been a volatile time for investors in many industries, and the tech arena has been particularly wild lately. The tech-heavy Nasdaq Composite tumbled 11% over the past year, proving just how difficult it's been.
But despite the tough times, there are some great technology companies out there that I wouldn't hesitate putting some money toward right now. Here's why you may want to consider buying Apple (AAPL -0.91%), Amazon (AMZN 1.34%), and Microsoft (MSFT 1.69%).
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1. Apple
Apple fared better than many tech stocks, with its share price down just 1% over the past year. That slide came after the company reported worse-than-expected results for its fiscal first quarter, which contained the all-important holiday season.
But long-term investors shouldn't write off Apple just yet. First, the company is still a leading player in the smartphone industry and generates a massive amount of profit from its position. For example, Apple accounted for 85% of global smartphone operating income in 2022.
But smartphones aren't the company's only strength. The tech titan could also soon enter a new device market with a mixed-reality headset (a combination of augmented reality and virtual reality). Apple has reportedly already shown its board of directors the device, indicating that it could potentially launch soon.
The latest estimates from Bloomberg put the number of shipped headset devices at about 1 million in the first year and for the headset to cost about $3,000. The timeline for release could come as early as Apple's Worldwide Developers Conference in June.
While sales will likely be slow at first given the high price tag, Apple has a history of its devices becoming blockbuster hits over the long term. And investors shouldn't underestimate the potential for the headset to eventually drive Apple's services revenue higher through in-app purchases and subscriptions.
For investors looking for a large company with an established track record of innovation, picking up some Apple shares could prove to be a great long-term move.
2. Microsoft
Microsoft is another no-brainer tech stock to buy because the company is a large player in some fast-growing markets, including cloud computing and artificial intelligence (AI).
While Amazon gets a lot of attention for its cloud dominance, Microsoft shouldn't be ignored here considering its Azure cloud services continue to nip at Amazon's heels. Azure's market share has more than doubled since 2015, and Microsoft's cloud services now account for 21% of the overall cloud infrastructure market, according to Synergy Research Group.
Sales from Microsoft's Azure and other cloud segment climbed 31% in the most recent quarter, and while that was a slower rate than in the recent past, there's still plenty of more room to grow. The public cloud market is estimated to increase from $525 billion this year to nearly $882 billion by 2027.
In addition to the cloud, Microsoft has a long-term opportunity in artificial intelligence. The company was an early investor in OpenAI -- the maker of the advanced language model ChatGPT -- and has recently begun integrating the technology into its Bing search engine and other software.
Microsoft is hoping the next wave of technology is focused on AI and thus far it appears the company is making the right bet. Since its announcement about integrating ChatGPT into its search engine, the Bing app had nearly as many downloads in just one week than it had all of last year. But Microsoft's AI integration goes far beyond putting the tool into Bing. Earlier this month, the company added the ability for developers to integrate ChatGPT into Azure as well, which could be a boon to its cloud services over the long term.
This matters because Microsoft is betting on the growing AI market, which IDC estimates will surpass $500 billion this year. The company's willingness to integrate AI across nearly all of its key software -- from Word to Bing to Azure -- is helping to give Microsoft an early lead in the AI race.
3. Amazon
Despite Amazon's 36% share price slide over the past 12 months, there are a couple of really good reasons why investors should keep it on their buy list. The first is that the company remains the leading player in the massive cloud computing industry.
Amazon Web Services (AWS) commands 34% of the cloud computing market right now, outpacing Microsoft's 21% and Google's 11%. And that lead is important because the company makes the vast majority of its profits from its cloud segment.
For the full 2022 year, AWS sales rose 29% to $80.1 billion and operating income increased 23% to $22.8 billion. For comparison's sake, Amazon generated $316 billion in North American e-commerce revenue and had an operating loss of $2.8 billion over the same period.
In addition to Amazon's long-term prospects in cloud computing, the company is also expanding its presence in the fast-growing digital ad market as well. In 2022, Amazon's ad business generated $37.7 billion in sales, up about 21% from 2021.
The company now holds about a 10% share of the digital ad market -- behind Meta and Google -- but will capture about 13% by 2026. With the digital ad space expected to grow and Amazon taking a larger portion in the near future, some estimates put its ad business at $85 billion in annual sales just three years from now.
Patience is a tech virtue
The tech sector is still volatile right now and long-term investors will likely have to be patient to see investments in these companies pay off. But all of them are making significant moves in key sectors, which could set them up for success for years to come.
