The best strategy to make money in the stock market is to buy and hold. It eliminates the difficulty of trying to time the market and allows stock winners to run over the long term. So, what are some technology sector stocks that investors should consider right now? Here are two that are squarely on my radar.
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Uber Technologies
First up is Uber Technologies (UBER 0.16%). There are many reasons why investors might want to buy and hold Uber stock, including:
- The company's status as the leader in the ride-sharing market
- Institutional support and bullish commentary from famous investors such as Bill Ackman
- Uber's potential expansion into new markets (robotaxis, advertising, and logistics)
However, I want to focus on something else: the company's terrific financials. Let's start with revenue. The company has expanded its revenue base from approximately $11 billion in 2021 to over $45 billion today. This translates to a compound annual growth rate (CAGR) of roughly 42%.
In short, Uber has shown that it can scale its mobility (ride-sharing) business quite well. Indeed, the company's revenue is still growing at a double-digit pace of 14%.
Similarly, the company has turned enormously profitable in the last few years. Indeed, one of the biggest arguments against Uber in the past has been the company's lack of profitability.
Yet, Uber's recent profits are excellent. It has generated over $12 billion in net income over the last 12 months, and its operating margin stands at 8%. That's the highest operating margin the company's ever recorded, and it could very well climb higher if the company properly leverages its network to drive down costs and boost profits.
Finally, Uber's stock is cheap. It currently trades at a price-to-earnings (P/E) ratio of 16. That's quite affordable in two respects. First off, the S&P 500 index trades at a P/E multiple of around 30, so Uber compares quite favorably on that count. Second, the stock is also cheap when compared against its own history. Over the last two years, the average P/E ratio for Uber shares is around 62.
Investors looking for a stock with staying power may want to consider Uber not only because of its long-term potential with robotaxis, logistics, and famous investor support; they should also consider owning it due to its fantastic fundamentals.
Nvidia
Finally, there's Nvidia (NVDA -0.82%). At this point, most investors know that Nvidia is a key winner in the artificial intelligence (AI) boom. It's now the largest company in the world by market cap and has generated nearly $150 billion in revenue over the last 12 months.
There remain many good reasons why investors may want to own Nvidia now -- and well into the future. Let's start with one recent development that could give the company a boost.
According to Nvidia CEO Jensen Huang, the Trump administration agreed to grant licenses allowing the company to sell its H20 chips to Chinese customers. That would represent a reopening of the gigantic Chinese market for Nvidia, which was largely prohibited from selling its products directly to Chinese buyers during the Biden administration.
The move could provide a big boost to Nvidia's sales -- which are already expected to rise by roughly 54% this year, according to consensus estimates compiled by Yahoo! Finance. In addition, Nvidia's revenue stands to rise even further as cutting-edge technologies like autonomous driving, AI-powered humanoid robotics, and supercomputing continue to grow over the next decade.
Nvidia has already benefited enormously from the AI boom. It is now the largest company in the world by market capitalization. Moreover, estimates of the future size of the AI market continue to increase -- meaning that Nvidia's future looks ever brighter. For all of those reasons, Nvidia remains a stock to consider for the long term.
