Finding quality long-term tech stocks is a proven way for investors to grow their portfolios over time. However, it’s not easy being a buy-and-hold investor these days. After a market that was overwhelmingly bullish for 15 years, some long-term investors are experiencing true market volatility for the first time.
Sure, there was that time in early 2020, but that was a blip on the radar compared to the last 18 months. Still, patience is a virtue in many things including investing. That’s why it’s still a time to look at millionaire-maker stocks. While the definition of a millionaire-maker stock can vary, it’s generally seen as a stock with solid financials and a high potential for growth.
Tech stocks score well on the growth front. However, many financially stable companies like Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) – while fine long-term stocks to own – already have trillion-dollar market caps. On the other hand, many small-cap stocks have the opportunity for strong growth. Having said that, they can move down as quickly as they can move up.
Here are three long-term tech stocks to hold through the current market volatility.
Palantir (PLTR)
Palantir (NYSE:PLTR) went public via a direct listing in 2020 as a polarizing stock. The company’s expertise in big data analytics, machine learning and artificial intelligence are reasons many investors were bullish on the stock.
However, there’s another contingent that saw Palantir as a 20-year old company that had yet to turn a profit. The bears also didn’t like the company’s brash CEO and its heavy use of stock options as compensation.
This is important because finding long-term tech stocks is about meeting expectations. Many investors thought Palantir relied too heavily on government contracts. Then, as the company added commercial clients, the issue of profitability continued to weigh on the stock. However, the company has posted two consecutive quarters of operating profit.
Still, questions continue about the company’s short-term valuation. That’s why the stock is down nearly 16% as of August 18 after being up more than 124% in 2023.
However, this is mostly noise aided by uncertainties in the broader economy. If you’re a long-term investor, the case for PLTR stock continues to look strong. If the company can continue to stack the wins, concerns about the valuation will fade.
SoFi Technologies (SOFI)
Like Palantir, SoFi Technologies (NASDAQ:SOFI) appears to be a long-term stock caught in short-term headwinds. However, also like Palantir, the trend appears to be your friend when it comes to SOFI stock.
SoFi is one of the original “fintech” (financial technology) companies. Part of the company’s business model is to target “high earners not being well served” by existing financial institutions. That target market of millennials and Gen-Z consumers are becoming more disenchanted with traditional banking.
The company burst into investors’ consciousness by capturing a sizable chunk of the student loan market. That’s kept a floor on the stock for much of the last two years but is likely to be a strong growth opportunity as borrowers look to refinance their existing student loans.
SOFI stock is up nearly 75% in 2023, but it’s down more than 14% since it reported second-quarter earnings that were not good enough in the minds of some investors. One of the sticking points is that SoFi is not turning a profit. Analysts expect that to change by the fourth quarter of this year. Which will bolster the case for SOFI as one of the long-term tech stocks that could be a millionaire maker.
Sprout Social (SPT)
Sprout Social (NASDAQ:SPT) is a software company with a web-based social media management platform. The company went public in late 2019 and benefited as companies and brands transitioned away from traditional advertising to social media as a marketing tool.
And, as Luke Lango pointed out to InvestorPlace readers in 2021, this is fertile ground. Most companies will be happy to outsource social media just as it has traditional marketing and advertising for years. The company has a global base of over 30,000 customers.
You can see that for yourself in the company’s earnings. Revenue is not the problem. Sprout Social continues to grow its top line both sequentially and year-over-year. The issue is profits. The company’s losses are expanding even as revenue is growing. That’s usually a bad combination. However, the company recently acquired Tagger media for $140 million. This will help expand the company’s reach in the influencer community.
SPT stock is down more than 17% in 2023 and more than 23% in the last year. Patient investors with a long-term outlook may want to use this as an opportunity to grab shares
On the date of publication, Chris Markoch had a LONG position in PLTR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
