The tech industry has experienced tremendous growth over the past year because of increased investor interest in tech, particularly in fields like generative AI and cloud computing. A benchmark ETF for the tech industry is the Technology Select Sector SPDR Fund (NYSEARCA:XLK), which has increased by 45% within the past year compared to the S&P 500, which has only risen by 32% within the same time period.
Investing in stocks with strong fundamentals is vital to an investment portfolio seeking consistent growth. Investors should pay close attention to underlying fundamentals such as revenue growth, free cash flow, earnings per share (EPS) and other metrics to determine if a company is worth investing in for the long term.
Here are some solid technology companies gaining exposure to the generative AI industry and other revolutionary tech that also have very strong fundamentals and still offer investors potential upside.
Salesforce (CRM)
Salesforce (NYSE:CRM) offers customers various cloud-based and generative AI products for collecting sales data, forecasting and consumer data.
On Feb. 28, Salesforce released its earnings for the fourth quarter of fiscal year 2024, in which it stated that total revenue increased by 11% and operating cash flow grew by 44% year-over-year.
Other large-cap technology companies such as Meta Platforms (NASDAQ:META) and Nvidia (NASDAQ:NVDA) have offered investors an initial quarterly dividend payment, and Salesforce has done the same. It now provides a dividend yield of 0.13% — a quarterly payout of forty cents per share.
Salesforce offers a wide array of generative AI products that assist in streamlining business processes. These products have enabled rapid growth, and Salesforce’s share price has nearly increased by 60% within the past year. Salesforce’s continuing product rollout, such as its new data cloud technology known as Einstein Copilot, will assist in the future upside potential.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is a leading semiconductor company that produces GPUs for gaming PCs and provides data center infrastructure.
Over this past year, it has been one of the massive tech movers, and its share price growth has more than tripled due to the growing investor interest in generative AI and related technology.
On Feb.24, Nvidia reported earnings for the fourth quarter of fiscal year 2024, stating that total revenue saw a massive spike in which it more than tripled, and net income rose by more than eightfold compared to the previous year. Its main business segment saw growth, but most notably, its data center and professional visualization business experienced an 400+% and 100+% increase in sales year-over-year, respectively.
As I mentioned previously, Nvidia announced its very first quarterly dividend to investors, which will result in an annual dividend yield of 0.02% or four cents per share quarterly.
Nvidia offers investors outstanding fundamentals and the potential for continued growth. Its exposure to the AI industry makes it a stock investors should keep a close eye on.
ServiceNow (NOW)
ServiceNow (NYSE:NOW) operates an automation platform for digital companies in various industries, including telecommunications, manufacturing and IT services.
Over this past year, its share price has surged by more than 75% due to growing potential within the automation tech and generative AI industries.
ServiceNow beat analysts’ expectations on its recent earnings report, released on Jan. 24 for the fourth quarter of the full year of 2023. It stated that total revenue grew by 26% compared to the previous year. It raised the future earnings outlook to 24% and 24.5% sales growth year-over-year for the first quarter of 2024.
ServiceNow has recently acquired NetACE Network Technology and 4Industry to improve its automation technology business.
ServiceNow is expanding its operations and experiencing rapid growth, with solid subscriber revenue growth and solid fundamentals. This stock is a brainer for investors seeking a cutting-edge tech company.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
