Future of tech: stocks to watch in the next decade

Over the past decade, the technology sector has demonstrated phenomenal growth, outpacing traditional indices. The Nasdaq-100 Technology Sector index has delivered an impressive 📈414% return, significantly surpassing the 185% growth of the S&P 500 index. This outstanding performance is attributed to the ability of tech companies not just to adapt to changes, but to actively shape the future by capitalizing on revolutionary trends and innovations.

With this in mind, we have prepared a curated list of the top 🔝7 tech giant stocks for long-term investment, poised to drive growth and innovation in the coming decade.

Super Micro Computer (SMCI) 🖥️

SMCI stock has surged 208% in 2024, driven by the booming AI server market. With the AI server market projected to reach $430 billion by 2033 (30% CAGR), SMCI is well-positioned for growth. The company's revenue is expected to double to $14.9 billion in fiscal 2024, outpacing the overall market. SMCI's AI server market share is anticipated to reach 23% this year. Trading at just 4.4 times sales and with a projected 62% annual earnings growth over the next five years, SMCI presents an attractive investment opportunity in the AI sector.

Oracle (ORCL) 🔮

Oracle is benefiting from increased demand for cloud-based AI services. The company's remaining performance obligations (RPO) grew 44% year-over-year to $98 billion in Q4 fiscal 2024, indicating strong future revenue potential. Oracle expects double-digit revenue growth in fiscal 2025, driven by AI demand. The company secured over 30 AI sales contracts worth $12.5 billion last quarter, nearly matching its Q4 revenue of $14.3 billion. With the cloud AI market projected to grow from $60 billion in 2023 to $398 billion by 2030 (31% CAGR), Oracle is well-positioned for sustained growth in the coming years.

Microsoft (MSFT) 🪟

Microsoft has successfully transformed from a software and personal computing giant to a leader in cloud computing and AI. Under CEO Satya Nadella's leadership, the company has surpassed Apple as the world's largest by market cap. Microsoft's Azure cloud platform has gained significant market share against Amazon Web Services, positioning the company as a key player in the AI arms race. With an average annualized return of 26.8% over the past decade, Microsoft continues to innovate across various sectors, including productivity software, gaming (Xbox), and professional networking (LinkedIn). 

The company's strong position in enterprise software and cloud services, combined with its AI initiatives like the integration of ChatGPT into its products, sets it up for continued growth and dominance in the tech industry.

NVIDIA (NVDA) 📦

NVIDIA has emerged as the powerhouse of the AI revolution, with an exceptional average annualized 10-year return of 70.1%. The company's AI-enabled GPUs are at the heart of data centers, gaming systems, and autonomous vehicles. NVIDIA's dominance is evident in its estimated 98% market share in GPUs for data centers, serving giants like Microsoft, Amazon, and Google. The stock's performance has been phenomenal, with a 239% increase last year and an 86% rise already this year. NVIDIA's success is not just in hardware; its CUDA platform and software ecosystem have created a moat, making it indispensable in AI development. 

As AI applications expand across industries, from healthcare to finance, NVIDIA is well-positioned to capitalize on this growth, potentially maintaining its stellar performance in the coming years.

Apple (AAPL) 🍎

Despite recent slower growth in iPhone sales, Apple has maintained a strong 24.4% average annualized return over the past decade. The company's ecosystem of products and services continues to be a significant driver of revenue and customer loyalty. Apple's services segment, including Apple Music, iCloud, and the App Store, has been growing steadily, providing a more stable revenue stream. The upcoming iOS 18, touted as Apple's biggest update in years, is set to incorporate generative AI, potentially revolutionizing user interaction with Apple devices. 

Additionally, Apple's forays into new markets like augmented reality (with the rumored Apple Glass) and the electric vehicle industry showcase its commitment to innovation. With its strong brand, loyal customer base, and significant cash reserves, Apple remains well-positioned to adapt to market changes and continue its long-term growth trajectory.

Meta Platforms (META) 👓

Meta, formerly Facebook, has delivered a 10-year average annualized return of 23%. The company's dominance in social media is unparalleled, owning four of the seven largest platforms: Facebook, Instagram, WhatsApp, and Messenger. Meta has undergone significant restructuring, including major cost-cutting measures, to focus on future growth areas. 

The company's investment in Reality Labs, focused on virtual and augmented reality technologies, represents its bet on the Metaverse as the next frontier of digital interaction. While this division currently generates losses, it showcases Meta's long-term vision. The company has also been quick to adapt to market trends, as evidenced by the rapid growth of Reels to compete with TikTok. With its massive user base, robust advertising platform, and continued innovations in AI and VR/AR, Meta is poised to remain a key player in the evolving digital landscape.

Broadcom (AVGO) 🔤

Broadcom has achieved an impressive 35.3% average annualized return over the past decade, positioning itself as a key player in the semiconductor industry. The company's strength lies in its diversified product portfolio, spanning wireless connectivity, data center switches, and AI chips. Broadcom is well-positioned to benefit from multiple growth trends, including the 5G rollout, increasing demand for data center infrastructure, and the AI boom. The recent acquisition of VMware for $61 billion marks a significant expansion into enterprise software, potentially transforming Broadcom's business model. 

This move is expected to diversify revenue streams and enhance Broadcom's position in cloud computing and enterprise solutions. With its strong cash flow, strategic acquisitions, and focus on high-margin, mission-critical technologies, Broadcom is well-equipped to navigate the dynamic tech landscape and continue its growth trajectory.

Summary

• Tech sector outperforms traditional indices, delivering impressive long-term returns.
• AI and cloud computing drive exponential growth for leading tech companies.
• Tech giants continuously innovate, adapting to new market trends and opportunities.
• Diverse revenue streams from software, hardware, and services ensure stability.
• Strong market positions and high barriers to entry protect long-term growth.