Among a tech sell-off, these two companies could prove to be smart investments in the coming years.
There's no getting around the fact thattechnology stockssuffered in 2022. Some investors are looking for safer places to invest their money to help manage high inflation and the uncertainty in the market.
But the tech sector has historically been a fantastic place for investors, and permanently ignoring long-term tech trends could come at the cost of missing out on some fantastic investment opportunities.
That's why -- even amid a tech sell-off -- investors should consider CrowdStrike Holdings(CRWD-3.65%)andAdvanced Micro Devices(AMD-6.16%)as they tap into the expanding cybersecurity and semiconductor markets. Here's why these two tech stocks are worth buying and holding for the next decade.
IMAGE SOURCE: GETTY IMAGES.
1. CrowdStrike is still growing, and much cheaper than before
CrowdStrike is a cloud-basedcybersecurity companythat helps customers protect everything from desktops to mobile devices from threats, and it's a very big business. The global cloud security market will be worth an estimated $77.5 billion by 2026, and CrowStrike is already doing a fantastic job of benefiting from this space.
In the company's second quarter of fiscal 2023 (reported on Aug. 30) CrowdStrike's total sales climbed 58% to $535.2 million, and its free cash flow soared 84% to $136 million. The company subscription customers jumped 51% from the year-ago quarter to 19,686, marking six straight quarters of 50% or more growth.
Even with its strong second-quarter results thatbeat analysts' consensus estimates, CrowdStrike's stock price has suffered along with the broader market's decline. But the drop has left CrowdStrike's stock much cheaper than before.
The cybersecurity company now trades at just 16 times the company's forwardprice-to-sales, down significantly from a price-to-sales of 55 one year ago.
With the stock's cheaper price tag and the company's ability to continue to grow despite difficult times, this cybersecurity stock looks like a smart buy for long-term investors looking to tap into the massive cybersecurity market.
2. AMD has diverse revenue streams and is trading at a discount
AMD is a leading semiconductor company that benefits from both central processing unit (CPU) market and the graphics processor unit (GPU) market, with the latter offering lots of potential upside.
The company's stock fell along with many other tech stocks over the past year, and the company's third-quarter results didn't help matters much. Sales in the company's Client segment fell 40% year over year to $1 billion because of slowing PC demand.
But the company's quarter wasn't all bad news. Thanks to AMD's diverse revenue segments, it benefited from its data center revenue climbing a very impressive 45% year over year to $1.6 billion, and the company's gaming sales increased 14% to $1.6 billion.
Those diverse revenue streams in fast-growing markets give investors a long-term opportunity with AMD. Semiconductor sales for the data center market will grow from a $9.5 billion market last year into an estimated $14.1 billion market by 2027.
Even more impressive, the entire GPU market will increase to an estimated $130 billion in 2027, up from just $24 billion last year.
Comments