5 best tech stocks to buy for 2024

The rally in tech stocks driven by artificial intelligence has faced some challenges in recent weeks. For instance, the Technology Select Sector SPDR ETF (ticker: XLK) has lagged behind the S&P 500's total return for 2024. Historically, short-term underperformance in the tech sector has often presented solid long-term buying opportunities, and this pattern is expected to persist in the near future.

1. Apple Inc. (AAPL)

Apple manufactures a range of personal computing devices, including the iPhone, iPad, Apple Watch, and Mac computers. Its services segment encompasses the App Store, Apple Music, iCloud, and various licensing ventures. Apple's potential to integrate AI technology into its products, combined with its extensive global ecosystem, presents significant value for investors. Improvements in Apple's margin profile and the expansion of its addressable market. Apple's strong free cash flow, top-tier management, and proactive capital return strategy justify a premium valuation. CFRA maintains a "buy" rating and a $260 price target for AAPL stock, which closed at $217.53 on August 12.

2. Microsoft Corp. (MSFT)

Microsoft, the largest software company globally, is renowned for its Windows, Office, and Azure cloud services. Analyst Angelo Zino is optimistic about Microsoft's AI prospects, noting significant investments across its product range. These investments include Azure AI development services, AI infrastructure, and applications like Microsoft Copilot. Microsoft has already introduced several AI products and is expected to launch more in the coming quarters. Zino believes these AI investments will not negatively impact overall margins. CFRA has given MSFT stock a "strong buy" rating with a $490 price target, while it closed at $406.81 on August 12.

3. Nvidia Corp. (NVDA)

Nvidia designs and sells high-end graphics and video processing chips used for desktop and gaming personal computers, workstations and other advanced computing servers and AI engines. Not only is Nvidia the best-performing stock on this list in 2024, its total return of 120.2% through Aug. 12 makes it the best performer in the entire S&P 500. Nvidia's penetration into auto, PC and robotics edge devices will help expand its total addressable market. Nvidia is also benefiting from content gains and has numerous opportunities in software. CFRA has a "buy" rating and $139 price target for NVDA stock, which closed at $109.02 on Aug. 12.

4. Broadcom Inc. (AVGO)

Broadcom is a leading global supplier of analog semiconductors with a diverse portfolio. Broadcom's networking, switcher, and application-specific integrated circuit (ASIC) segments are expected to generate $11 billion in revenue for fiscal 2024. This positions Broadcom to benefit significantly from the surge in AI infrastructure investments. Broadcom’s acquisition of VMware is yielding substantial cost synergies, with the integration progressing ahead of schedule. The addition of VMware’s software business is anticipated to enhance Broadcom's margins, free cash flow, and provide stable, recurring revenue. CFRA has a "buy" rating and a $185 price target for AVGO stock, which closed at $148.62 on August 12.

5. Salesforce Inc. (CRM)

Salesforce is the world's largest provider of cloud-based customer relationship management software. Salesforce is no longer the high-growth stock it once was, but its market share gains, improving profitability and attractive valuation make it a high-quality tech stock for long-term investors. Salesforce's revenue growth outlook has dropped into the single-digit percentage range, but the company is better positioned than competitors to monetize its AI initiatives over time thanks to its access to valuable troves of front office customer data. CFRA has a "strong buy" rating and $300 price target for CRM stock, which closed at $251.31 on Aug. 12.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.