The Nasdaq-100 index has dipped about 5% since mid-July as macroeconomic headwinds have caused declines across the tech market. Over the last three months, many of the biggest names in the industry have experienced either dips in their stock prices or little to no growth. However, recent challenges are why it's crucial to have a long-term mindset when investing in tech stocks.
The sector is in a near-constant state of innovation and is known for rewarding patient investors with substantial returns. For instance, Apple (AAPL -0.60%) and Microsoft (MSFT 1.44%) have experienced stock declines of 9% and 2%, respectively, since July. Meanwhile, Amazon's (AMZN 2.29%) stock has risen slightly at 4%. However, the chart below proves that stockholders who bought in five years ago are still significantly up on their investments.
Apple, Microsoft, and Amazon remain leaders in their respective markets and likely have much to offer investors over the long term. A recent sell-off in tech could be the perfect time to invest in these companies and reap the rewards for years to come. So, here are three top tech stocks to buy in November.
Data by YCharts
1. Apple
Apple hasn't had it easy this year as an economic downturn has caused reductions in consumer spending across tech. The company's earnings release on Nov. 2 represented its fourth consecutive quarter of revenue declines, with net sales tumbling 3% year over year for fiscal 2023. Apple's product segments were hit particularly hard, with iPhone revenue dipping 2% for the year and Mac sales plunging 27%.
Despite the declines, the company's Q4 2023 outperformed analyst expectations on several fronts. Earnings per share hit $1.46, beating forecasts by $0.07. Meanwhile, revenue for the quarter came in just slightly higher than expected. The bright spot for Apple over the last year and its recent quarter has been services, which hit revenue growth of 16% in Q4 and 9% for the year.
While the challenges haven't been favorable for current stockholders, they have reduced the cost of entry for new ones. Apple's price-to-earnings ratio has decreased by 11% since July to about 28, meaning its shares offer more value than any other company on this list. Apple remains one of the biggest names in tech and has a big chance to rally in the long term, with a booming services business and a growing venture into AI. November is an excellent time to consider adding Apple shares to your portfolio.
2. Microsoft
Microsoft has emerged as one of the most exciting artificial intelligence (AI) companies in 2023. The tech giant arguably has more earnings potential in the industry than almost any other organization, and that's thanks to the dominance of its products and vast financial resources.
The company was an early investor in AI, sinking $1 billion into ChatGPT developer OpenAI in 2019. Microsoft has since increased that figure by another $10 billion, achieving a 49% stake in the start-up. The partnership has allowed the company to bring AI upgrades across its product lineup, including Word, Excel, Bing, Azure, and more.
The combination of Microsoft's nearly unrivaled dominance in productivity software with OpenAI's technology creates endless earning opportunities. In addition to attracting new cloud customers to Azure, the company is monetizing its AI offerings on Microsoft 365 and enjoying boosts to revenue as a result.
In Q1 2024 (ended September 2023), revenue rose nearly 13% year over year, beating Wall Street estimates by $2 billion. The growth came alongside a 13% increase in productivity income (which includes Microsoft 365 revenue) and a 19% bump in cloud sales.
Microsoft is on a promising growth trajectory and has much to gain as the AI market expands, making now a compelling time to buy its stock before it's too late.
3. Amazon
Amazon has made an impressive comeback this year after its stock plunged 50% in 2022, burdened by macroeconomic headwinds. The company's stock has climbed 65% since Jan. 1, being one of the few tech companies to keep Wall Street consistently bullish in recent months. Amazon has rallied investors with significant growth in its e-commerce segments and a promising expansion into AI.
In Q3 2023, revenue rose close to 13% year over year, beating expectations by $1.5 billion. The growth was mainly thanks to improvements in Amazon's retail segments, with its North American division reporting an 11% boost in revenue and international sales rising 16%.
In addition to e-commerce growth, Amazon is using its leading market share in cloud computing to carve out a lucrative position in AI. The company is rapidly expanding its AI tools on AWS, cashing in on the soaring demand for such services.
Amazon is back on a growth path, with solid long-term outlooks in e-commerce and AI. Meanwhile, the company's average 12-month price target of $172 projects stock growth of 24% and indicates it still has plenty to offer new investors. Amazon is a top tech stock this November and seems too good to pass up.
