3 Tech Stocks to Buy Before Summer Ends

Investors looking for the next stage of economic growth are largely focused on the technology sector. Companies involved in the production and design of innovative new technologies continue to hold a premium in this market. But for many investors, that premium is certainly worth paying, given that that’s where most of the consumer attention is paid.

For long-term thinkers, investing in companies with strong AI offerings or platforms that can support a new era of how we live and work is an increasingly important piece of the investment puzzle. Companies with strong presences in the cloud computing and other consumer discretionary sectors are seeing strong demand, which many expect to continue in the coming years and decades.

That’s not to say there isn’t a lot of uncertainty in the market. Ratings remain high, with equally high expectations. And as we’ve seen with recent earnings reports, even beats and gains sometimes aren’t enough to quell concerns about how valuable many top tech stocks are.

That said, I think the following three companies could make decent purchases before the summer is over.

Key points about this article:

• Tech stocks continue to see higher volatility as earnings season winds down.
• These three major tech players appear to have significant long-term growth potential despite the short-term noise in the market right now.
• If you are looking for action with huge potential, be sure to grab a free copy of ours brand new “Next NVIDIA” report.. It has a software stock where we are sure it has 10x potential.

Adobe (ADBE)

Adobe logo on the side of a brick wall

Adobe (NASDAQ:ADBE) recently reported another strong quarterbringing in Revenue of $5.31 billion, up 10.2% year over year. The company beat expectations for key metrics, including its revenue, RPO and EPS, largely due to annual recurring revenue of $487 million for its Digital Media division, which easily beat estimates of $434 million. Those results prompted Adobe to raise its annual guidance, boosting its stock price. CEO Shantanu Narayen highlighted this record quarter of revenue was driven by the company’s Creative Cloud, Document Cloud and Experience Cloud businesses.

Adobe has a strong track record of market returns and is projected to reach a market cap of $1 trillion over the next decade. Over the past ten years, the company’s revenue has grown to a 17.4% CAGRfree cash flow increased by 19.7% and adjusted net income increased by 36.4% annually. Despite these impressive growth rates, share price gains have been moderate, indicating that ADBE shares appear to be fairly valued relative to underlying business performance.

Importantly, investors are keeping a close eye on another key growth catalyst. Adobe integrates Generative AI in its Creative Cloud suiteenhancing tools like Photoshop and Premiere Pro with the Firefly AI engine for tasks like editing photos and videos with simple text commands. While early results suggest there will continue to be a need for human refinement, Adobe’s early adoption positions it well for future growth. The company’s history of leading innovations, such as the move to subscription-based services, underscores its adaptability. Although it faces competition from Apple and IBM, Adobe’s trajectory suggests it could reach a $1 trillion market cap in the next few years, potentially even sooner.

Qualcomm (QCOM)

A Qualcomm executive speaking at a conference in front of a board with the company’s logo

Qualcomm (NASDAQ:QCOM) beat analysts’ expectations for it Results Q3 and guidance for Q4 despite a weak smartphone market. Estimated revenue growth of 5% for the next fiscal year could increase with a return of AI-powered devices. The company’s extended partnership with Apple (the next company on this list), which runs through 2026, continues to give many investors optimism. Baird upgraded his rating on QCOM stock to Outperform and raised his price target to $250, citing strong anticipated demand for the iPhone 16 and strong sales of AI PC components.

Qualcomm’s IoT segment supports smart home devices, remote monitoring and robotics, while its automotive division focuses on autonomous driving and digital cockpit technologies. Recently, Qualcomm ventured into PC chips with its Snapdragon platform, offering high performance along with improved battery life. Despite phones generating 63% of its revenue in Q3 fiscal 2024, IoT contributed 15% and automotive grew to 9% (growing at an impressive 87%).

from Qualcomm low ratingwith a price-to-earnings ratio of 21 times sets it apart from other major chip stocks. Following a decline due to declining smartphone sales and the end of the 5G upgrade cycle, Qualcomm’s revenue growth rebounded 11% annually to $9.4 billion in Q3. Net income rose 18% to $2.1 billion, making the stock a strong value given its upside potential, especially as 5G adoption increases.

Apple (AAPL)

Former CEO Steve Jobs at Apple’s iPhone unveiling event

Apple (NASDAQ:AAPL) leads the AI ​​PC market, dominating with its Macs accounting for 60% of shipments in Q2 2024. Canalys project AI PC shipments will grow from 44 million in 2024 to 103 million in 2025. Despite concerns over new EU regulations, Bank of America analyst Wamsi Mohan held a Purchase rating for Apple with a $256 price target, noting the company’s ability to adapt to regulatory changes.

Apple is developing a next-generation home device with an iPad-like display and a robotic arm. A team of hundreds of employees is working on this device, which uses actuators to tilt and rotate the screen. This new product aims to innovate beyond existing home devices such as the Amazon Echo Show 10 and the former Meta Portal. The next catalyst for the stock always seems to be on the horizon, and Apple is a company that hasn’t disappointed in terms of innovation, of course.

Indeed, Apple has also become a strong one dividend growth stockbacked by its strong brand and expanding services. Despite a modest 0.45% yield, its three-year dividend growth rate of 2.81% and low payout ratio of 14.7% suggest plenty of room for upside. With operating cash flow of $110.5 billion for 2023, Apple’s solid financial position and continued innovation position it well for sustained dividend growth, providing a solid total return profile for the tech giant over the long term.

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