U.S. Tech Stock Investment Guide: Start Your Positioning with These 8 Leading Companies

The valuation environment for US technology stocks in 2024 has significantly improved. After two years of deep correction, the once-overhyped sectors (cryptocurrency, NFTs, metaverse) are gradually returning to rationality, while truly core-competent tech companies are presenting a window of opportunity for value reversion. For investors planning to enter the US stock market, now is the golden time to select high-quality tech stocks.

Core Logic of Investing in Tech Stocks

Investment opportunities in the US tech sector often stem from two dimensions: one is the long-term growth potential of fundamentals, and the other is relative valuation undervaluation. Many institutional investors have already started to bottom-fish these high-quality companies that were mispriced. Whether you are a novice investor or an experienced trader, the following 8 tech companies are worth including in your research list.

Analysis of 8 Leading US Tech Stocks

Apple Inc. (AAPL.US): The Moat of the Consumer Ecosystem

Market Cap: $2.36 trillion | Dividend Yield: 0.62% | EPS: $5.99

As the world’s most valuable publicly listed company, Apple’s investment appeal lies in its massive ecosystem user base. Over 2.2 billion active devices worldwide mean that once users enter the Apple ecosystem, they will continue to generate demand for hardware upgrades and service subscriptions. Its services business (including iCloud, App Store, Apple Music, etc.) is becoming a new engine for revenue growth, characterized by high gross margins and strong stickiness.

NVIDIA (NVDA.US): The Hub of the AI Chip Supply Chain

Market Cap: $510 billion | Dividend Yield: 0.08% | EPS: $4.34

The AI wave has boosted demand for high-performance computing chips. GPUs needed for training and inference of large models like ChatGPT and Gemini mainly come from NVIDIA. The company has formed deep technical partnerships with tech giants such as Microsoft, Oracle, and Google. In the race of artificial intelligence technology, chip suppliers are often the most direct beneficiaries, and NVIDIA is at the core of this industry chain.

Broadcom (AVGO.US): High-Yield Asset in Semiconductors

Market Cap: $240 billion | Dividend Yield: 3.19% | EPS: $40.76

As an infrastructure chip manufacturer, Broadcom directly benefits from the growth in demand in emerging fields like cloud computing, IoT, and 5G. Compared to peers, Broadcom offers a dividend yield of 3.19%, far above the market average of 1.7%. Its dividend growth rate over the past five years approaches 30%, making it attractive for long-term investors seeking stable income.

Amazon (AMZN.US): Dual Engines of Cloud and Advertising

Market Cap: $981.6 billion | Dividend Yield: — | EPS: $1.51

During economic downturns, Amazon has shown strong resilience. Its AWS cloud services maintain a leading position in the industry, while its e-commerce advertising business is eating into Google and Meta’s market share. The Prime membership ecosystem has high stickiness; even with increased subscription fees, user churn remains low. This diversified business model reduces the impact of volatility in any single segment.

Adobe (ADBE.US): Monopoly Advantage in Creative Tools

Market Cap: $159.6 billion | Dividend Yield: — | EPS: $15.28

Adobe’s product suite (Photoshop, Premiere, PDF, etc.) has become essential for professionals worldwide, creating an irreplaceable user stickiness. The latest earnings report shows that document services and digital marketing cloud products are the main growth drivers. Even amid macro uncertainties, management remains optimistic about continued expansion, reflecting the robustness of its business model.

Netflix (NFLX.US): Revival of Streaming Leader

Market Cap: $149.1 billion | Dividend Yield: — | EPS: $11.42

In fierce competition with Disney+, Max, and others, Netflix successfully reversed user loss by adjusting its business model (introducing an ad-supported tier). Recent quarterly subscription data exceeded expectations, marking that this streaming giant has emerged from its difficulties. With fundamentals improving, the stock price is expected to further recover.

Google (GOOG.US): Valuation Undervaluation of the Search Empire

Market Cap: $1.17 trillion | Dividend Yield: — | EPS: $5.10

Although conversational AI like ChatGPT has raised concerns about search engines, data shows Google still controls about 90% of global search traffic. In the short term, traditional search behavior will not be fully replaced by new AI models, and Google’s advertising business remains stable. Its relatively moderate P/E ratio makes it a good choice for value investors.

PayPal (PYPL.US): Scale Effect of Payment Networks

Market Cap: $85 billion | Dividend Yield: — | EPS: $4.89

PayPal’s stock price fell over 80% in 2022, but its business fundamentals have not deteriorated. Its 435 million active accounts provide a solid business moat. The current expected P/E of 21 is relatively low in history, and with management’s commitment to returning 75% of free cash flow via share buybacks, it is attractive for long-term investors.

Investment Advice

For newcomers to US stocks, these 8 companies cover key sectors from hardware, chips, software to payments. If you plan to build a diversified tech stock portfolio, consider selecting a few that match your risk tolerance. The key is to understand each company’s core competitive advantages rather than blindly chasing short-term hype. In the long run, tech companies with strong moats and stable cash flows often deliver substantial investment returns.