Macroeconomic headwinds last year caused steep declines across the tech sector as reductions in consumer spending hampered quarterly results. However, tech stocks have returned to favor in 2023, alongside easing inflation. As a result, now is an excellent time to fill up on tech stocks that have massive potential over the long term before they rise any higher.
Companies active in innovative industries like artificial intelligence (AI) and consumer tech can be an excellent way to ensure consistent gains over many years. In fact, market leaders Advanced Micro Devices (AMD 0.02%) and Apple (AAPL 0.25%) have enjoyed stock growth of about 79% and 47%, respectively, since Jan. 1 as investors have noted their long-term potential.
Despite their stocks' monster growth this year, AMD and Apple have positions in multiple high-profit industries that suggest they're not done rising yet. So, here are two explosive growth stocks to buy in 2023 and beyond.
1. AMD: Profiting from several areas of tech
Technological advances have made adding a chipmaker to your portfolio a smart idea, and AMD is an attractive choice. As the tech market develops, demand for powerful chips is rising across different sectors. As a result, AMD stock offers the chance to benefit from the growth of several industries.
The company's hardware can be found across the tech market in popular game consoles such as Sony's PlayStation 5 and Microsoft's Xbox Series X|S, numerous PCs and laptops, handheld gaming machines, and powering cloud platforms like Azure and Alphabet's Google Cloud through its data center chips.
Meanwhile, AMD has increasing potential in AI. The company is playing catch-up in the market, with its biggest competitor Nvidia seemingly getting a head start. But AMD has made promising strides to match Nvdia's AI offerings.
AMD partnered with cloud giant Microsoft to bolster its artificial intelligence chip expansion. The Windows company is highly motivated to create an alternative to Nvidia to reduce the cost of chips supporting AI workloads. As a result, Microsoft is providing AMD with financial and engineering resources, which could take its business far.
AMD shares skyrocketed about 581% in the last five years. In the same period, its annual revenue has risen 264%, with operating income up 180%. With the power of AI at its side and recent advances across the tech industry, the company could continue on its current growth trajectory.
2. Apple: Outperforming the competition
While many tech companies were harshly affected by last year's economic declines, Apple proved the strength of its business by outperforming many of its peers. The chart below illustrates how the iPhone company experienced a more moderate stock decline amid 2022's sell-off than some of the biggest names in tech.
Data by YCharts.
Moreover, according to research from Counterpoint, U.S. smartphone shipments declined by 17% in the first quarter of 2023. The drop made it challenging for many companies in the industry, with Samsung's market share remaining at 27% year over year and Motorola's share falling from 10% to 8%. But the same quarter saw Apple take advantage of the market slump and grow its smartphone market share from 49% to 53%.
A similar situation occurred in the personal computing market. IDC data shows global PC shipments fell 13% in the second quarter, with companies like Lenovo, Dell, and Acer experiencing declines between 18% to 22%. Yet Apple enjoyed PC shipment growth of 10% in the same period and was the only company on IDC's list to report an improvement for the quarter.
Apple's consistent ability to outperform the competition even with economic hurdles to clear makes it one of the most reliable growth stocks available. Its stock gained 304% in the last five years, becoming the first company to achieve a market cap of $3 trillion this year.
Along with consistent product demand and a recent venture into the high-growth virtual/augmented reality market, it all means Apple's stock is too good to pass up in 2023.
