Buy-and-hold investing can be one of the best ways to grow your wealth over time if you possess patience and are ok with the idea of holding through some drawdowns over the years. This investment strategy is attractive for quite a few reasons, as it doesn’t require spending a lot of time actively managing a portfolio, can help you save on your taxes thanks to long-term capital gains, and is very easy to implement. With the market pulling back sharply to start the year, investors that have been waiting to add shares of the top stocks during a correction should be getting very excited to go shopping for new positions.
Tech stocks, in particular, have been hit extremely hard in 2022 and could offer attractive long-term entry points for buy and hold investors to consider. Focusing on financially stable tech stocks with a combination of compelling products & services and the potential for continued earnings growth can really generate some great alpha for accounts. Many of the biggest technology companies could just be getting started in terms of their growth potential and innovation, which means that holding onto shares over the years could be a very wise decision.
Let’s take a look at 3 iconic tech stocks to buy and hold below.
If you’re looking for the quintessential buy and hold tech stock, Apple is a great example. That’s because it’s a company that has a rock-solid balance sheet and a long history of successfully developing exciting new products. Apple continues to deliver quarter after quarter impressive earnings results too, which is the type of consistency long-term investors love to see. The company is known for its sleek and cutting-edge products including the iPhone, iPad, Macbook, AirPods, and more, and with the way technology has become so integrated into our daily lives it's easy to understand why this stock is worth holding onto for long-term.
Consider the fact that Apple dominates the global smartphone market with the iPhone, which is a huge positive given the way this technology is still making its way into emerging markets. Investors can also feel confident that existing iPhone holders will be interested in upgrading their devices at some point thanks to strong customer loyalty and how quickly technology continues to advance. There’s also a lot to like about how new products and services like Apple TV, Apple Watch, and Apple Pay fit perfectly into Apple’s business model and should likely help the company retain iPhone customers over the years. The company recently reported record Q4 revenue of $123.9 billion, up 11% year-over-year, which is a reminder of just how strong Apple’s business continues to be even in the face of added competition and supply chain issues.
When it comes to buy and hold investing, you want to focus on companies that have a competitive edge that will remain intact for years to come. That’s a good reason to consider adding shares of Alphabet, as Google is the world’s dominant internet search engine and should continue helping the company generate massive amounts of internet advertising revenue over the next decade and beyond. Other exciting areas of Alphabet’s business include the rapidly growing Google Cloud, streaming video platform YouTube, and Waymo autonomous driving technology development company. That means an investment in Alphabet offers exposure to one of the most successful business models in the world along with several other high-potential areas.
Alphabet is down over 7% year-to-date and has been surprisingly weak after delivering a Q4 earnings beat by $4.00 with $30.69 EPS. Investors might be overlooking the news of a 20-for-1 stock split here, which could attract new buyers closer to the split date in July. Finally, the fact that Alphabet recently announced plans to acquire cybersecurity firm Mandiant for $5.4 billion in cash is yet another reminder of why this is a fantastic buy-and-hold candidate. With so many compelling areas of Alphabet’s business and a commitment to making savvy investments that strengthen the company’s position in the tech sector, it’s hard to argue against holding this fantastic stock for the long term.
Finally, we have e-commerce giant Amazon, which is another strong candidate for buy and hold investors to consider. The global e-commerce industry’s growth is showing no signs of slowing down, with retail e-commerce sales expected to grow by 50% over the next four years to reach $7.4 trillion dollars in 2025. Investors should also be attracted to the exposure to Amazon’s leading enterprise cloud business, Amazon Web Services, which is another great reason to consider adding this tech company for the long term. Finally, the fact that Amazon just raised its Amazon Prime subscription prices by 17% speaks volumes about the company’s market-leading position, as it's evident the company expects the majority of its customers to stay on board even with higher prices.
Amazon just announced that its board has approved a 20-for-1 stock split for shares of record at the close of May 27 along with a $10 billion share buyback program. These types of moves can attract new buyers and ignite rallies, so it’s certainly worth paying attention to how shares perform in the coming sessions. The bottom line here is that consumer preferences have likely permanently changed to favor the convenience of online shopping following the pandemic, which means Amazon shareholders could be in for big gains.
Before you consider Amazon.com, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Amazon.com wasn't on the list.
While Amazon.com currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
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