Spring is in full bloom, and while this time of the year often brings to mind flowers and itchy eyes, it's also an excellent time to bolster your portfolio with solid tech stocks.
Like clockwork, Apple (AAPL 0.11%) hosts its Worldwide Developers Conference (WWDC) every June. The company's immense influence in tech means its announcements at the event often indicate where the industry is headed as a whole. This year, virtual/augmented reality (VR/AR) is expected to be a large part of WWDC, suggesting it might be a good idea to consider investing in the market.
Moreover, the artificial intelligence (AI) market is booming, with its related stocks skyrocketing since the start of the year. Companies like Advanced Micro Devices (AMD 1.04%) and Microsoft (MSFT -3.13%) have a lot to gain from the industry's growth, making their stocks attractive picks.
Here are three top tech stocks to buy in June.
1. Advanced Micro Devices
AMD shares have soared up to 94% since Jan. 1, almost entirely on the prospects of AI. Last November, OpenAI launched the advanced chatbot ChatGPT, which stunned the world with its ability to produce human-like dialogue based on prompts. The program's success led countless companies to pivot their businesses to AI development, with AMD well positioned to supply chips to the entire market.
AMD produces the hardware necessary to run and develop AI software with its line of central processing units (CPUs), graphics processing units (GPUs), and data processing units (DPUs). The company's chips power a wide range of devices and platforms already, including multiple game consoles and cloud services like Microsoft's Azure, Alphabet's Google Cloud, and Oracle. The cloud industry is becoming one of the biggest adopters of AI technology, which is positive for AMD's future.
The argument for AMD's stock is made stronger by the fact it is currently trading at a better value than Nvidia's, the company's biggest competitor in AI. AMD's forward price-to-earnings ratio (P/E) of 43 at this writing is high, but compared to Nvidia's forward P/E of 52 it's a better buy.
AMD shares might seem expensive, but its prospects suggest it could offer massive gains to patient investors.
2. Apple
Apple is projected to debut its first VR/AR headset at WWDC, which signifies the company's first expansion into a completely new product category since it entered the smartwatch space in 2015 with the Apple Watch.
While venturing into a new market could bring uncertainty and doubt for some companies, Apple has a unique history of achieving immense success when it has done so in the past. The iPhone manufacturer has climbed to the top of smartphones, headphones, tablets, and wearables despite other tech companies leading these markets before Apple entered the picture. As a result, the company's rumored plan to release a VR/AR headset this month has created excitement for investors.
Meta and Sony currently dominate the VR/AR market with their respective headsets. While these companies have had some success in gaming, Meta in particular has had trouble convincing consumers to embrace the technology for other uses.
Meanwhile, Apple's considerable brand loyalty has sent the mass adoption of several technologies skyrocketing after releasing its own take on a device. Apple could be just what the industry needs to take the next step.
Apple's stock climbed 277% in the last five years alone, making it a reliable buy that is only made more attractive ahead of WWDC this month.
3. Microsoft
As the biggest backer of OpenAI after investing $11 billion in the start-up since 2019, Microsoft is an attractive way to invest in the software side of AI. The company's partnership with OpenAI has allowed it to integrate AI into its products, including Office programs like Word and Excel, Azure, and its search engine Bing. Consequently, Microsoft is well on its way to becoming the go-to for businesses and consumers seeking AI services.
Moreover, Microsoft has further proven its dedication to AI development by supporting AMD in its AI chip expansion. According to a Bloomberg report from May 4, Microsoft is providing financial and engineering resources to boost AMD's AI efforts and create an alternative to Nvidia. The partnership could be a strategic move for Microsoft to leapfrog competitors like Amazon and Alphabet by securing chips tailored to the efficiency of its own AI services.
In addition to artificial intelligence, Microsoft has a thoroughly diversified business that allowed it to gain substantial market shares in productivity software, gaming, cloud computing, operating systems, and more. This variety has made its stock one of the most consistently rising investments, with its shares up about 850% over the last decade. As a result, Microsoft is a buy at almost any time, including this month.
