The technology sector continues to be one of the best places to invest for the long term. Let's look at three stocks in the sector showing breakout growth that investors might want to consider buying now and holding for the next decade.
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1. Palantir Technologies
Palantir Technologies (PLTR 0.46%) saw its revenue growth accelerate for the past seven quarters, including a 39% year-over-year surge in Q1. The growth is being led by the adoption of its Artificial Intelligence Platform (AIP) within the U.S. commercial sector, as well as strong momentum with its largest customer, the federal government.
The company was originally set up after the 9/11 terrorist attacks as a data gathering and analytics company to help the U.S. government fight terrorism. However, with the advent of AI, it's been able to expand the use cases of its technology to the commercial sector.
While some companies focus on training AI models, Palantir has taken a unique approach in creating an AI orchestration layer to put AI into action. Its platform does this by gathering data from different sources and organizing it into an "ontology" that then links digital assets to their real-world counterparts. This is making AI actionable and allowing its customers to solve complex, real-world problems.
Currently, AIP is being used across a wide array of industries to help tackle a diverse range of challenges. The breadth of use cases provides Palantir with a huge growth runway.
Biggest Risks: Palantir has a very expensive valuation, and it faces some risk from potential budget cuts in the U.S. government departments it serves because of cost-cutting measures the Department of Government Efficiency (DOGE) is pursuing.
2. SoundHound AI
SoundHound AI (SOUN 1.57%) has seen its revenue climb by 50% or more in each of the past seven quarters, but its growth really broke out in the first quarter of 2025, when its revenue soared 151% year over year. The company is a leader in AI voice technology, where its solution uses speech-to-meaning and deep meaning understanding technology to process speech in real time and to better understand a user's intent. It primarily generates revenue through royalties and subscriptions.
The company has made strong initial inroads in both the automobile and restaurant industries. Several automobile brands use its technology as personal assistants within their vehicles, which can do things such as turn on the air conditioning via voice control or even make restaurant recommendations. Meanwhile, restaurants are using SoundHound's technology for everything from phone ordering to drive-thrus to being an AI assistant for new employees.
With its acquisition of Amelia, meanwhile, the company entered several new verticals, including healthcare, financial services, and retail. The goal of the company is to create a voice AI platform that can handle complex interactions across industries that have their own specific jargon, and Amelia's expertise in these areas helps fill a technology gap.
The company recently introduced AI agents to its platform that can handle tasks with little to no human interaction. By combining voice and agentic technology, SoundHound believes it will have an advantage in this emerging field. If the company can become the voice layer of agentic AI, the stock has huge upside potential from here.
Biggest Risks: SoundHound carries an expensive valuation and operates in a competitive market. The company needs to improve its gross margin following the Amelia acquisition, as Amelia brought with it some lower-margin legacy deals.
3. AppLovin
Don't let its somewhat silly name fool you, AppLovin (APP 0.55%) has been a growth breakout star. Following the introduction of its Axon 2 AI-advertising engine in 2023, it has seen both its revenue and gross margin surge. In Q1, its advertising revenue soared 70%, while its gross margin climbed to 81.7% from 72.2% a year ago.
At its core, AppLovin is an adtech company focused on gaming app companies. Its gaming app customers use its platform to find players who are the most likely to download their apps or engage with an interactive ad. The company says that Axon 2 uses predictive machine learning to improve ad targeting, bidding, and ad placement, and that it can predict which ads will yield the highest return on ad spending budgets.
AppLovin believes it can see consistent 20% to 30% annual revenue growth in its gaming segment from algorithm improvements and the natural growth of the gaming app industry. However, the bigger opportunity is expanding its platform to other areas. It is currently testing the solution with e-commerce customers and expects the industry to become a meaningful contributor this year. If it can successfully move beyond the gaming industry, the stock should have strong upside from here.
Several renowned investors, including Tiger Global's Chase Coleman, own the stock, and Alphabet continues to let AppLovin operate on its Google Play platform, despite being an adtech competitor.
Biggest Risks: Short-sellers have accused the company of a multitude of things, including installing apps onto users' devices without their permission, violating app store rules, and having close ties to China.
