7 Tech Stocks to Buy During a Stock Market Crash
With the Federal Reserve committed to doing whatever it takes to tackle rising inflation, investors are likely to look to their favorite tech stocks as a buying stumbling block. Still, this may not be the opportune time to leave the wider innovation sector. In fact, patient market participants should be prepared to receive attractive discounts.
For now, the narrative presents myriad risks. As Fed Chairman Jerome Powell indicated in his monetary policy speech in Jackson Hole, Wyoming, consumer price increases must now be moderated before they escalate into too much trouble. Powell did well on his word, with the central bank raising the benchmark rate by 0.75%. Naturally, the associated increase in borrowing costs hurt buying formerly exciting tech stocks.
Still, the market won’t last forever. Therefore, those looking to the future should consider acquiring shares of the most innovative firms that can drive economic activity. Below are tech stocks to buy at a potential discount.
TSLA Tesla $275.95 META Meta Platform $139.70 SQ Block $55.27 AMD Advanced Micro Device $67.26 TTD Trade Desk $57.13 CRWD CrowdStrike $160.48 MORN Morningstar 213.47 Tesla (TSLA)
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Should the equity implode, patient investors should consider Tesla (NASDAQ:TSLA) as a discounted name for buying tech stocks. While there is more competition in the underlying electric vehicle (EV) industry than ever before, Tesla remains the dominant player. Beyond that, I’m not quite sure that this dominance will fade away anytime soon.
According to the August 2022 Electrek.co post, Tesla has a US market share of 68%. Frankly, as more companies enter the EV space, this figure steadily decreases. While this dynamic can represent a source of criticism, it’s also worth reminding ourselves that entering a field is the easy part. Surviving and subsequently thriving represents a whole new ballgame.
While many upstart EV makers present an aspirational profile, Tesla now operates well beyond that space. Here, the retained earnings line item for the long term says it all. Back in 2019 (and before the coronavirus pandemic), the company lost more than $6 billion in earnings. At the end of 2020, this metric stood at a loss of $5.4 billion.
But by 2021, retained earnings have turned positive at $331 million. At last count, the stat rose to $5.9 billion. If you see the discount with Tesla, it’s one of the tech stocks to buy.
Meta Platform (Meta)
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At the moment, social media giant and tech innovator Meta Platforms (NASDAQ:META) isn’t looking so hot. On a year-on-year (YTD) basis, META has lost 58% of the market value. Hence, investors need not wait for the total impact in the broader equity sector to take relative discounts. That discount is already here.
However, even contrary investors aren’t exactly thrilled about acquiring Meta despite the massive hemorrhage. According to an NPR report in July, Meta — which owns the valuable Facebook network — suffered the first loss in revenue. But that wasn’t the worrisome part, because, let’s face it, companies can’t grow sales forever.
Rather, CEO Mark Zuckerberg warned that the social media space is plagued by a decline in the digital advertising business. As the lifeblood of Internet firms, losing advertising revenue presents widespread problems.
However, it is also important to point out that Facebook represents the largest social media network by a wide margin. Going forward, such a canvas will command an exceptional premium. Therefore, META is one of the technical stocks that can be bought after a market downturn.
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Currently, Block (NYSE:SQUARE), like other popular tech stocks, is grappling with a tough economic climate. Furthermore, longtime stakeholders received yet another blow, this time from analyst Dan Dolev at Mizuho Securities. Recently, Dolev downgraded his “buy” rating to “neutral”, citing “user fatigue” and attraction to cryptocurrencies.
“SQ still has a lot of potential, but it’s not being realized,” Dolev said. While I like Block as a long-term idea to buy tech stocks, I can’t say I disagree with Dolev’s current assessment. Still, if the market turns down, patient investors should consider adding SQ to their portfolio.
As you probably know, Square empowers small and medium-sized businesses to compete with their larger counterparts. Initially, the company started with card payment readers, expanding to myriad other business ecosystem solutions.
While the immediate environment of high interest rates encourages entrepreneurship, rates cannot rise indefinitely. At some point, the Fed should pivot to support business growth, allowing SQ to buy one of the tech stocks.
Advanced Micro Devices (AMD)
For much of the past year, chip maker Advanced Micro Devices (NASDAQ:AMD) generated intense upside interest. Of course, during that time, there was a tremendous boom in the cryptocurrency sector. AMD makes some of the most popular graphics processing units, which in turn help drive the mining process for blockchains linked to a proof-of-work consensus mechanism.
Unfortunately, this year, the paradigm shifted negatively and dramatically. As crypto is now suffering from weak demand, AMD has lost a lot of relevance. Plus, events like merges – essentially a pivot to more energy-efficient proof-of-stake consensus mechanisms – translate into less need for crypto-mining equipment.
The decline in PC demand and the current case for AMD seems ominous. Still, the company presents an argument for buying technical stocks if the market turns down.
As AMD’s 2022 earnings report for the second quarter demonstrates, revenue performance (70% year-over-year) remains undeniably strong. It’s just that the headwinds associated with the new normal — such as supply chain disruptions — are potentially one-sided dilemmas. Remove these extraordinary odds and AMD can fire back in full swing.
Business Desk (TTD)
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In most other circumstances, The Trade Desk (NASDAQ:TTD) would clearly represent one of the brightest tech stocks to buy. Specializing in programmatic advertising, the explosion of streaming services is great for the company. Besides, it’s not just the usual suspects. Some of the biggest names in the legacy entertainment space have made their way into the streaming space.
If that wasn’t enough, the streaming giant also recognizes the need for pricing diversification. Therefore, home platforms started targeting ad-driven subscriptions. Based on the downwind, this should help the Trade Desk. However, the TTD is down more than the 34% YTD, thus investors need to have a forward-looking view.
Still, the company’s Q2 2022 earnings report offers plenty of encouragement. The Trade Desk posted revenue of $377 million, an increase of approximately 35%. However, the obvious issue is a net loss of $19 million that contrasts sharply with net income of $48 million in the year-ago quarter.
Nevertheless, once the economy returns to normal levels, the fundamentals of the Trade Desk offer great potential.
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A cybersecurity specialist, CrowdStrike (NASDAQ:CRWD) easily represents one of the best tech stocks to buy for long-term investors. Frankly, I don’t care what the context is – CrowdStrike will almost certainly be relevant for years to come.
While the digitization of the global economy facilitated unprecedented convenience and efficiency, it also created massive risks. Basically, the same connectivity that promotes communication also enables nefarious activities. According to Forbes, in 2021, “the average number of cyber attacks and data breaches increased by 15.1% compared to the previous year.” Just one disruption can cripple an enterprise, which makes CrowdStrike’s endpoint security solutions so important.
Even though the post-Covid new normal has caused substantial disruption to the global economy, CrowdStrike continues to expand its business. In the company’s latest earnings report for Q2 2022, it posted revenue of $535 million. This represents a 58% higher swing.
Should the market drop, CRWD is on the list of tech stocks to buy; That is, unless you believe that cyber security will not be relevant in the future.
As a financial services firm, Morningstar (NASDAQ:MORN) may not be the most obvious choice as one of the best tech stocks to buy. However, the company uses myriad software-based technologies to provide investors with a library of practical and actionable data. If I may add my experience to the narrative, Morningstar has been invaluable in writing articles like this.
Oddly, Morningstar presents a fascinating profile in large part because of the meme-stock phenomenon. Before the Covid-19 pandemic, financial analysts believed that the younger demographic was not as focused on wealth creation through equities as in previous generations. However, the dynamic hostage audience of the global health crisis changed everything.
Suddenly, as the Wall Street Journal reported, seemingly everyone became a day trader. Going forward, retail investors are unlikely to forget the lessons learned about investing. So, once the current market toxicity is gone, these old and savvy former meme traders can look to “real” resources like Morningstar. Thus, MORN can be an interesting name to buy in tech stocks.
At the date of publication, Josh Enomoto did not hold any position (directly or indirectly) in the securities mentioned in this article. The views expressed in this article are those of the author, subject to InvestorPlace.com publication guidelines.
A former senior business analyst at Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has provided unique, important insights into the investment markets as well as various other industries including legal, construction management and healthcare.