2 Top Tech Stocks to Buy Right Now

The stock market will always experience occasional dips, but stocks of profitable and growing companies will always be a relatively safe course to build lasting wealth. Here are two solid businesses with excellent growth prospects to buy now.

1. Microsoft

Microsoft (MSFT 0.83%) is a great stock to buy for its strong brand, massive profitability, and nimble growth strategy that can quickly adapt to new opportunities. It has responded quickly to the artificial intelligence (AI) trends that took over the enterprise space last year and is translating into a strong business boost.

Microsoft is a no-brainer for almost any market environment due to its lucrative subscription-based business model. Investors can sleep well at night knowing they own shares in a business that provides essential software to students and working professionals and has the financial strength to invest in growth and pay regular dividends.

Over the past year, Microsoft generated $88 billion in net profit on $245 billion in revenue and distributed a quarter of its profit to shareholders in dividends, bringing its trailing yield to 0.72 percent.

These financial resources have allowed Microsoft to outpace competitors in AI. while Apple prepares to make its AI debut with Apple Intelligence, Microsoft announced Copilot, an AI-powered generative assistant, in early 2023 that has brought major improvements to Office, Windows and other enterprise software services.

More companies continue to adopt Copilot. In the quarter ending in June, the number of Copilot customers increased by 60% compared to the previous quarter. The feedback so far has been great for Microsoft, with companies continuing to come back and add more employees to the service.

The momentum in Microsoft’s business is driving solid growth, with revenue up 15% year-over-year last quarter. Accelerated investment in AI infrastructure may cause some short-term margin pressure, but paves the way for significant potential long-term growth.

Wall Street analysts expect Microsoft’s earnings to grow 13% annually over the next few years, which should support satisfactory returns for long-term investors.

2. Netflix

Netflix (NFLX 0.57%) is another profitable business that is enjoying a boost right now. Despite several new streaming services launching in recent years, Netflix continues to be the runaway leader with 277 million subscribers globally.

Netflix generated $7 billion in net profit on $36 billion in revenue last year. This translates to a high profit margin of 20% and makes superior margins while spending billions every year on new movies and series.

Netflix has become a destination for top filmmakers and studios to produce blockbuster content, and this should continue to generate earnings for years to come. There are over 1 billion broadband internet subscriptions worldwide, giving Netflix plenty of room to grow.

One strategy Netflix uses to attract new members is to produce localized content that appeals to different cultures. India is one of Netflix’s biggest growth markets right now. It recently received a boost from the hit series Heeramandi: The Diamond Bazaar and Amar Singh Chamkila. This shows how Netflix’s profitability funds a large content budget that can cast a wide net for more subscribers.

Global paid subscriptions grew 16% year-over-year in the second quarter, driven by strong new content and management efforts to stop password sharing. It won’t always grow subscribers at high rates, but Netflix can still fuel shareholder returns by expanding profit margins and increasing earnings per share.

Wall Street analysts expect Netflix’s earnings to grow 28% on an annual basis over the next few years. As Netflix continues to churn out new content and grow subscribers, investors can expect the stock to be worth much more in another 10 years than it is today.