My Top 3 Tech Stocks to Buy Right Now

Since 2020, the U.S. stock market has been exceptionally volatile, primarily due to the continued impact of the COVID-19 pandemic, increased economic uncertainty, and geopolitical tensions. However, despite the economic turmoil, many technology stocks have posted impressive results.

The growing popularity of telecommuting, online shopping, cloud computing and artificial intelligence (AI) technologies have played a major role in driving the growth of technology stocks. Investors are keen to capitalize on the digital transformation, and here are my top three picks of tech stocks that are best suited to deliver solid long-term returns over the next few years.

Microsoft

technology giantsMicrosoft （Nasdaq Resonancestock (market)(Code: MSFT)The company's stock price has soared about 50% in the past year. in late January, the company announced impressive Q2 FY2024 results, beating analysts' expectations for revenue and earnings.

Not surprisingly, the company's investment in ChatGPT developer OpenAI continues to be the talk of the town. Microsoft has successfully integrated OpenAI's technology into its full suite of products, quickly gaining new customers and significantly increasing productivity.

Microsoft's cloud computing platform Azure has emerged as a major beneficiary of the company's AI strategy. At the end of the quarter ending December 31, 2023, Azure's market share was estimated at 24%, up 2 percentage points from the same period last year. Customers have been choosing Azure to simplify and accelerate cloud migration. Microsoft also said that Azure's OpenAI service is being used by a growing number of AI startups and more than half of Fortune 500 companies. At the end of the second quarter, Microsoft had 53,000 Azure AI customers, more than a third of which were new to the Azure platform.

In addition to Azure, Microsoft's AI assistant, CoPilot, is also improving rates and productivity for users of its Microsoft 365 cloud-native productivity platform and the GitHub software development platform, where CoPilot was instrumental in driving Github's Q2 revenue growth of more than 40% year-over-year.

While the adoption of artificial intelligence technology is rapidly advancing Microsoft's growth strategy, the company's broad geographic presence and diversified product set are additional reasons why we are bullish on this stock. The company also has a strong balance sheet with $81 billion in cash and $58.7 billion in free cash flow.

Judging by the long-term potential of Microsoft's artificial intelligence business and its solid financial position, it seems like a smart move to buy the stock now.

Amazon

E-commerce and cloud computing giantsAmazon (NASDAQ: AMZN)Another stock that looks quite impressive at the moment, the company also posted solid revenue and earnings growth in the fourth quarter of 2023. Amazon's operating income jumped 383% year-over-year to $13.2 billion. This also played a major role in driving 12-month free cash flow to end the year at $35.5 billion, up $48.3 billion year-over-year.

Despite increasing competition from Azure, Amazon Web Services (AWS) continues to dominate the cloud infrastructure space with a market share of 31%. AWS has been growing at a double-digit rate and is on track for $100 billion in annual revenue. AWS' strong security and access control capabilities have proven to be a key differentiator for long-term project customers.

Amazon is also rapidly injecting new features and AI-generating technology into AWS, which usesINVISTAAmazon has launched Bedrock, a full-trust service that gives customers access to its extensive base models as well as those of other AI contributors to provide computational power for AI workloads. Amazon has launched Bedrock's All-To-Go service, which gives customers access to its extensive base models as well as those of other AI contributors to build proprietary AI applications, and Amazon Q, a coding aid that helps developers provide valuable insights from multiple data sources.

Amazon is poised to capture profits from its world-leading e-commerce business. The company's focus on speed of delivery is translating into higher purchase frequency for Prime members. The growing proportion of third-party sellers is also helping to strengthen the company's e-commerce business. Finally, Amazon is monetizing its online platform beyond product sales by providing targeted and relevant advertising to曏 sellers and customers.

As a leader in a number of high-growth markets, Amazon appears to have plenty of room to grow.

Confluent

Confluentfirms(NASDAQ resonance code: CFLT)The platform stores, processes and analyzes large amounts of streaming data, enabling customers to gain actionable insights to make informed decisions.ForresterConfluent is recognized as the leader in streaming data platforms by the fourth quarter of 2023.

Confluent Cloud's cloud-based platform has become a major catalyst for growth, with an increasing number of digital-native customers adopting the platform even in a difficult macroeconomic environment. In the fourth quarter, Confluent Cloud's revenue reached $100 million for the first time, up 46% year-over-year.

Confluent's recent financial performance underscores the resiliency of its business model. After a third quarter in which its stock price plummeted due to weak guidance, the company delivered solid gains in the fourth quarter of fiscal year 2023 with outstanding performance. Revenue and earnings exceeded consensus expectations. In addition, the company achieved its first positive non-GAAP (adjusted) operating margin of 5.3% in the fourth quarter, up 27 percentage points year-over-year.

Although free cash flow will be negative in 2023, Confluent expects to break even in 2024. In addition, the company is currently focusing on a targeted addressable market of over $60 billion. With annual revenues of only $777 million, the company still has a lot of room to grow.

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John Mackey, former chief executive officer of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.Manali Pradhan has no position in any of the stocks mentioned above.The Motley Fool holds recommendations on Amazon, Confluent, Microsoft, and Nvidia, The Motley Fool recommends the following options: Microsoft January 2026 $395 Call Option Long and Microsoft January 2026 $405 Call Option Short. The Motley Fool has a disclosure policy.

Three Tech Stocks I Want to Buy Right Now was originally published by The Motley Fool.