Many of the world's most successful investors have realized the value of tech stocks. The ever-expanding industry and its innovative nature allow companies to benefit from consistent long-term gains. So it's not surprising that Warren Buffett's holdings company, Berkshire Hathaway, has dedicated over 45% of its portfolio to Apple (AAPL -0.35%). Since Berkshire first invested in 2016, Apple shares have soared 565%.
Booming markets like artificial intelligence (AI) and cloud computing have made Wall Street particularly bullish about tech stocks this year. Consequently, now is an excellent time to invest in the industry and profit from its long-term growth.
Here are two leading tech stocks to buy in 2023 and beyond.
1. Amazon
Amazon (AMZN 3.43%) is an attractive option right now as it recovers from last year's economic downturn. The company is on a growth path, as evidenced by a correction in its retail business. In the second quarter of 2023, Amazon's North America segment hit over $3 billion in operating income after reporting losses of $627 million in the year-ago period. The improvement comes after several restructuring moves by the company, including shuttering unprofitable platforms, closing dozens of warehouses, and laying off thousands of employees.
The e-commerce market is projected to expand at a compound annual growth rate of 11% through 2027 and hit $5.5 trillion. Meanwhile, Amazon is dominating the sector in multiple countries. As consumers increasingly turn to their computers and smartphones to shop, the company is well-positioned to profit substantially over the long term.
Moreover, the tech giant is home to the world's largest cloud platform in Amazon Web Services (AWS), strengthening its position in AI. Amazon has unveiled several new AI tools on the platform this year as it competes against cloud giants like Microsoft and Alphabet. However, with companies like Netflix, Sony, and Meta Platforms already on its list of high-profile AWS clientele, Amazon could have an edge over the competition.
Amazon's stock has soared 828% over the last decade. While past growth isn't always indicative of what's to come, solid positions in online retail and the AI-boosted cloud market are promising for its long-term prospects. Amazon has become a behemoth in the tech world, and its stock is a no-brainer this year.
2. Apple
Shares in Apple have tumbled 11% since the company reported its Q3 2023 earnings at the beginning of August. Revenue fell for the third consecutive quarter, slipping 1% year over year. Declines in multiple product segments, such as iPhone, Mac, and iPad, dragged down the company's earnings as macroeconomic headwinds and reductions in consumer spending caught up with the business.
However, the company remains a leader in consumer tech and is making promising inroads in AI. Economic challenges won't last forever, and it has the market dominance to come back strong over the long term. While companies like Microsoft and Amazon have focused their AI efforts on the business sector, Apple has its sights set on consumers.
The company is gradually introducing AI features across its lineup, which could make it a leading growth driver in the public's adoption of AI tools. In 2023, the iPhone received AI-driven updates. For instance, there's a revamp to autocorrect, which now uses a language model similar to the one that runs OpenAI's ChatGPT. Meanwhile, Siri is now 25% more accurate. Devices like AirPods and Apple Watch are similarly helping users improve various tasks using AI.
According to Bloomberg, the company has also created its own version of ChatGPT that engineers call Apple GPT. There's no word yet on when or if the program will be released. However, it could give competing services a run for their money if integrated into Apple's ecosystem alongside other Apple-exclusive services like Messages and FaceTime.
Apple's solid growth history and ventures into booming markets have made its recent stock dip an exciting investment opportunity. The company's share price is at one of its lowest points over the last three months, making it a screaming buy in 2023.
