The 3 Top Tech Stocks to Watch in Q4 2023
This year has been all about breakthroughs in tech. We learned to embrace artificial intelligence (AI) and are now embracing 5G, augmented and virtual reality, quantum computing and the Internet of Things (IoT). The sooner you adapt to the latest developments in tech, the better it is. There was a time when the internet was unheard of and today it has become impossible to survive without it. With all of this new tech, there are now some top tech stocks to watch in Q4 of 2023.
Similarly, the new developments in the field of tech are here to stay, and someday they will become an integral part of our lives. Tech companies have had a mixed year. It started with turmoil and most tech stocks were falling until AI came into the picture and changed it all. Today, we hear AI all of the time. Because of it, top tech companies have seen a massive upside in revenue in the recent quarter. If you are ready to ride the tech wave, here are the three top tech stocks to watch out for in Q4 2023.
Nvidia (NVDA)
If you’d invested in Nvidia (NASDAQ:NVDA) in 2021, your money would have doubled by now. I’ve always been a big fan of Nvidia and believe that the company is growing at a significant rate which gives a solid opportunity for long-term investors. While the company may not be able to maintain the same level of growth in the long term, it is certainly enjoying the best days right now. The semiconductor maker is riding high with AI and it has several clients on the waitlist.
The impact of high demand can be seen in the company’s financials and it has impressed investors in the past two quarters. In the third quarter, the revenue hit $13.5 billion, which is an 88% upside from the prior period. The data center segment saw a 171% growth due to the rising AI-related demand.
Nvidia is known for the most advanced GPUs, and it has a diversified business. At one point in time, it was known for the gaming sector, and now it is gaining popularity for the data center segment. Things can change throughout the years but the next few quarters will be very important for Nvidia. AI is playing a significant role in the financials and even the upcoming quarter results will show growth driven by it. NVDA stock is up 207% year to date, and is trading at $440 today.
As AI continues to become mainstream and businesses continue to invest in it, Nvidia will keep growing. Its shares look attractive, and before the company announces results on Nov 15, the stock is a “buy.” It will soar if it beats analyst expectations yet again. This is one of the top tech stocks to watch in the final quarter of the year.
Microsoft (MSFT)
If you want to end the year with a reliable and stable stock, look for the one that has beaten the market consistently. Microsoft (NASDAQ:MSFT) is one such tech stock that should be on your radar. The stock has grown 184% in the past five years and is up 33% year to date. It is trading at $318 today and has massive upside potential.
This is one stock that should be a part of your portfolio for several reasons. It has a solid history and an excellent track record. The management has shared long-term forecasts that are highly positive, and it aims to increase the annual revenue to $500 billion by the end of 2030. While it means doubling the revenue, it is something only Microsoft can pull off.
In the recent quarter, the company reported a revenue of $56.19 billion anda net income of $20.08 billion, up 20% and beating analyst expectations. The company isn’t one to sit and watch as the world embraces AI; it has invested $10 billion in OpenAI and is integrating AI into Bing as well as other applications to ensure that it remains well ahead in the AI race. Its intelligent cloud division, which is led by Azure, has seen a 15% year-over-year growth, and it is a major contributor to the total revenue.
The company is making every attempt to ensure that Azure enjoys robust growth. AI will continue to remain a major growth driver for the company in the coming years. The stock has a solid growth history, and this is one company that will not disappoint you no matter how the market moves. Additionally, it boasts a 0.94% dividend yield and is known for high stability.
Adobe (ADBE)
I love Adobe (NASDAQ:ADBE) for its products and the business model it has created. The company has been in existence for a very long time and has become a part of several industries. Its products set it apart from competitors, and its application is used in healthcare, education, design, marketing and entertainment.
It has a subscription model that steadily generates recurring revenue. In the recent quarter, it saw a revenue of $1.2 billion from the digital experience segment, and about 90% of it came from the subscription fees. Since it generates most of its income through recurring payments, it enjoys a strong cash position. The management has hiked their outlook for the year on both the top and bottom lines. ADBE remains one of the top tech stocks to watch out for this quarter.
While you will have to pay a premium for the stock, I believe it will pay off as the company’s investments in AI improve the value of its products like Creative Cloud. However, the stock has enjoyed a rally since May and is up 53% year to date. The last time I wrote about buying the stock, it was trading at $489. It is trading at $518 today and is still lower than the highs it enjoyed in 2021. If you are looking for a growth stock, Adobe is the one to own since it is a part of multiple industries and it has a highly popular product. Consider taking a small position in the stock right now.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
