Guide to U.S. Tech Stocks: A List of 8 Potential Stocks for Beginner Investors

Between 2022 and 2023, the U.S. stock technology sector experienced a deep correction, with many high-quality companies’ stock prices falling to historic lows. For long-term investors, this is actually a good opportunity to deploy positions. As we enter 2024-2025, the market is beginning to reassess these companies’ fundamentals, and expectations of a return to value are gradually heating up. For novice investors wanting to enter the U.S. tech market but unsure where to start, we have prepared a recommended list of 8 highly potential tech stocks to help you find suitable investment targets.

Why is now a good time to invest in U.S. tech stocks?

Looking back to early 2022, the market was highly enthusiastic about emerging concepts like cryptocurrencies, NFTs, and the metaverse. However, by mid-year, these hot sectors cooled rapidly—NFT markets crashed over 90%, the crypto industry faced a capital winter, and the metaverse became a “paper tiger” story. These upheavals caused losses for many aggressive investors but also created low-priced entry points for rational value investors.

In contrast, solid fundamental companies like Apple, Amazon, and Google experienced some stock price pullbacks but their business models, competitive advantages, and revenue sources remained unchanged by market sentiment. This is why smart investors are deploying positions now.

Criteria for recommended U.S. stock investments

Before choosing specific stocks, investors need to understand a basic principle: high-quality tech stocks are often worth attention due to three factors: first, the company has a large user base and strong brand stickiness; second, it has a clear profit model and stable cash flow; third, the sector has long-term growth potential. The 8 stocks introduced below are selected based on this framework.

Steady income category

Apple (AAPL): Buffett’s “security blanket”

Among top global investors, Buffett’s love for Apple is less known. According to the latest disclosed holdings, Berkshire Hathaway (Buffett’s flagship company) allocates about 26.2% of its portfolio to Apple, demonstrating the confidence of this investing master.

Apple’s investment value lies in its sticky user ecosystem. Over 2.2 billion active devices worldwide are used daily, meaning Apple can continuously generate high-margin income through services (including iCloud, App Store, Apple Music, etc.). Compared to hardware sales, which are more volatile, this service revenue grows more steadily and is a key factor supporting the company’s valuation.

Broadcom (AVGO): An ideal choice for high-dividend U.S. stocks

As a key player in the semiconductor field, Broadcom’s future growth is driven by the sustained expansion of cloud computing, IoT, and 5G. Market research indicates these industries will maintain double-digit growth in the coming years.

What’s more attractive to investors is Broadcom’s cash returns. With a dividend yield of over 3%, compared to the market average of 1.7%, and a dividend growth rate of nearly 30% over the past five years, it’s very appealing for those seeking stable cash flow.

Growth drivers

NVIDIA (NVDA): Leader in AI chips

Since ChatGPT sparked a global AI craze, NVIDIA has been “winning by default.” As a primary supplier of AI computing chips, from ChatGPT to Google Bard and domestic models like Wenxin Yiyan, NVIDIA’s hardware is essential behind these large models.

Strategically, NVIDIA has partnered with tech giants like Microsoft, Oracle, and Google to provide cloud AI processing solutions for enterprise users. In this AI race, chip manufacturers are often the ultimate winners—regardless of who dominates the applications, NVIDIA’s products are indispensable. Analysts are optimistic about its future growth.

Amazon (AMZN): An underestimated e-commerce giant

Amazon’s recent earnings show resilience; despite macroeconomic uncertainties, the company maintains steady growth. In the competitive streaming market, Amazon Prime Video has increased subscription fees without losing users, demonstrating strong stickiness.

Also noteworthy is its advertising expansion. Amazon is gaining market share from competitors like Google and Meta, whose growth has stagnated. This market share shift often signals long-term profit growth. From a value investing perspective, Amazon’s current valuation remains attractive.

Innovative application category

Adobe (ADBE): The “hidden champion” of the digital age

When it comes to PDF or Photoshop, these tools are widely used worldwide. Adobe, though an established company, continues to see strong growth in its product lines. The latest earnings report shows that Document Cloud has become a new growth engine, with management confident in its continued expansion.

Despite uncertain macro conditions, Adobe has delivered impressive results, demonstrating the robustness of its business model and market position.

Netflix (NFLX): Streaming’s “rebirth”

The streaming industry faced price wars and user battles in recent years. Netflix, as a pioneer, was once questioned due to slowing user growth. However, recent developments show a turnaround: the company launched an ad-supported tier, retaining high-end subscribers while opening new revenue streams.

Although ad revenue is still a small part, consumer acceptance of cheaper options has increased amid economic tightening. Latest earnings show subscriber growth exceeded expectations, indicating Netflix has successfully reversed its growth slowdown. With improved fundamentals, the company is poised to return to high growth.

Long-term potential

Google (GOOG): Search giant’s moat remains strong

The emergence of ChatGPT once cast doubt on Google’s prospects. When Google rushed to launch Bard and faced setbacks, its stock dropped over 7%, losing hundreds of billions in market value in a day. But this reaction was excessive. According to independent traffic data, by the end of 2024, Google still controls over 90% of global search traffic.

While conversational AI is an industry change, short-term consumer search habits are unlikely to shift significantly. For value investors, Google’s current stock price and P/E ratio still offer good opportunities.

PayPal (PYPL): A remarkable rebound in the payments sector

PayPal’s 2022 performance was a “free fall”—stock price dropped over 80% from its peak. But fundamentally, the company’s growth has not collapsed, indicating the stock’s decline far exceeds its deteriorating fundamentals, and valuation is severely depressed.

Latest earnings show PayPal’s P/E ratio is near its lowest in recent years, attractive for long-term investors. Notably, the platform has 435 million active accounts, laying a foundation for future growth. Management also announced that 75% of free cash flow will be used for share buybacks, which is a positive signal for increasing per-share value.

Investment tips and entry points

Choosing the right recommended stocks is just the first step. For new U.S. stock investors, it’s important to also focus on: regularly review fundamental changes rather than short-term fluctuations; tailor your allocation based on risk tolerance—conservative investors may favor Apple, Broadcom, etc., while aggressive investors might focus on high-growth stocks like NVIDIA; consider dollar-cost averaging to diversify risk instead of heavy one-time investments.

If you’re unfamiliar with U.S. stock trading, start with account opening and simulated practice to gradually build your investment system. Wishing you success in finding your opportunities in the U.S. stock market.