Two noteworthy tech companies currently offering attractive investment opportunities.
Two noteworthy tech companies currently offering attractive investment opportunities.
Take a glance around, and you'll swiftly comprehend the significance of technology in our everyday lives. Companies dependent on tech are becoming increasingly vital to the global economy, and this trend is worth considering by investors who might wish to invest in this sector.
If your intent is to attain a diversified portfolio within the technology sector, then your search ends here with these two unmatched "Seven Wonders" stocks.
Unsurpassed influence
Investors should consider purchasing shares of Alphabet (GOOGL -1.45%) (GOOG -1.50%) and Meta Platforms (META -1.05%) right now, two technology giants leading the digital realm.
As per Alphabet CEO Sundar Pichai, the company boasts six products boasting at least 2 billion users each. Meta's family of apps (Facebook, Instagram, WhatsApp, Messenger, and Threads) collectively serve 3.29 billion daily active users, further reinforcing its extensive reach.
This immense user base grants these entities remarkable benefits, primarily harnessing the power of significant network effects. Increased internet content and data drive users closer to online searches and transforms advertising on Google into a more desirable proposition. Additionally, numerous individuals with Meta apps in their arsenal encourages continued engagement, bolstering these platforms' popularity.
This vast reach permits both Alphabet and Meta to roll out continuous artificial intelligence (AI) advancements and updates, which can then inform product development decisions based on trend data.
Financial safety
While fortunes have been amassed in unprofitable businesses with rapid growth, the safest play is to focus on companies with consistent earnings, reducing risk.
Alphabet and Meta Platforms excel in this aspect. In the third quarter, Alphabet saw a 34% surge in year-over-year operating income, while Meta observed a 26% growth. Both entities expanded their operating margins, and with abundance of cash flow, can invest heavily in technical infrastructure.
Their resourcefulness ensures the latest high-tech equipment like servers, data centers, and network gear, further improving their processing power and solidifying their competitive advantages in AI.
Even after significant investments, these companies still generate substantial capital for shareholders. In the past 12 months, Alphabet's diluted outstanding share count fell by 2.2%, while Meta Platforms' share count shrank by 1.6%. Predictably, they both granted initial dividends in 2023, making investment even more lucrative with dependable income streams.
Value for money?
Identifying lucrative companies with hold over the market and high earnings is only half the battle. To truly maximize returns, one must ensure their stock purchases do not exceed these companies' actual value.
Since January 2023, Alphabet and Meta have observed impressive growth (as of Dec. 18), with share prices soaring 113% and 396%, respectively. Although these gains appear unthinkable, their stock prices still remain comparatively reasonable.
Currently, Alphabet shares are endowed with a forward price-to-earnings ratio of 23.6, while Meta Platforms has a multiple of 26.4. Despite impressive growth, these low valuations make these stocks among the most cost-effective of the Seven Wonders.
Investors thinking of exploring this sector should seriously consider staking a claim in Alphabet and Meta Platforms, securing themselves a share of this tech revolution.
To maximize returns in the technology sector, investors might want to consider purchasing shares of Alphabet and Meta Platforms, given their consistent earnings and impressive growth. In the third quarter, Alphabet saw a 34% increase in operating income, while Meta observed a 26% growth, expanding their operating margins and generating substantial capital for shareholders.
Moreover, the low valuations of these stocks make them cost-effective options, with Alphabet having a forward price-to-earnings ratio of 23.6 and Meta Platforms having a multiple of 26.4, despite their impressive growth. These technology giants with significant user bases and extensive reach can continue to harness network effects and roll out AI advancements, ensuring their competitive advantages in the digital realm.