Finance
Do you have $5000? 3 tech stocks to buy and hold for the long term
Buying shares in great companies and holding them for the long term is a recipe for investing success. The challenge is knowing what to buy and how to spend the capital you have investing. Fortunately, many online brokers offer fractional share purchases, allowing investors to purchase portions of a stock. This makes buying stocks with a higher price per share easier.
If you have $5,000 and are interested in tech stocks, here are three companies to consider. Each of these companies has strong foundations and a bright future. There may be some volatility in the short term, but in the long term each has the potential to reward shareholders.
Confluent
Some of the best stock picks in the technical sector are companies that offer their products to other companies, making them less known to ordinary investors. Confluent (NASDAQ: CFLT) is such a company. Confluent sells software that allows companies to access important data in real time, helping them make critical decisions faster.
In the recently reported first quarter of 2024, Confluent grew its total customer base 9% year over year. However, the number of largest customers grew faster. Customers with $100,000 or more in annual recurring revenue (ARR) grew 17%, and customers with $1 million or more in ARR grew 24%. Increased customer growth exceeding overall customer growth is a good sign for Confluent.
Although Confluent is not yet profitable, it is making good progress in that area. In the first quarter of 2024, Confluent’s net loss was $93 million, compared to a loss of $153 million in the prior year quarter.
Data hound
Another company to company software vendor that should be on investors’ radar is Data hound (NASDAQ:DDOG). The observability and security platform allows companies to see all the data they need to run the business in one place, removing silos and boosting workflow. Datadog’s products have certainly proven valuable. Nearly half of customers use four or more products, and about a quarter use six or more.
This customer acceptance has led to impressive revenue growth.
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In the first quarter of 2021, Datadog had revenue of $199 million. In the first quarter of 2024, sales of $611 million were reported.
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Datadog has become profitable in the past year. Net income in the first quarter of 2024 was $43 million, compared to a net loss of $24 million in the first quarter of 2023.
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The cash flow statement has also improved, with the company generating a free cash flow margin of 31% in the most recent quarter, compared to 24% in the prior year quarter.
The Trade Bureau
All investors probably know someone by now who subscribes to one or more streaming services. This move to streaming allows ads to be better targeted to the specific person watching, delivering a higher return on investment for the advertiser. The Trade Bureau (NASDAQ: TTD) is the main company in facilitating the placement of these targeted advertisements.
As the premier buy-side advertising platform, The Trade Desk has attracted more than 1,000 customers, and they’re sticking around. The Trade Desk has had a retention rate of over 95% over the past 10 years.
The Trade Desk’s turnover mainly comes from North America, but also offers great international opportunities. About two-thirds of all ad spend occurs outside North America, yet only 11% of The Trade Desk’s spend to date is international.
The first quarter 2024 results confirmed that the company continues to improve as a business. Compared to the first quarter of 2023, revenue grew 28%, while net profit rose from $9 million to $32 million. Sales for the second quarter are expected to increase 23% year-on-year.
Should you invest $1,000 in Confluent now?
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Jeff Santoro holds positions at Datadog and The Trade Desk. The Motley Fool holds and recommends positions in Confluent, Datadog, and The Trade Desk. The Motley Fool has one disclosure policy.
Do you have $5000? 3 tech stocks to buy and hold for the long term was originally published by The Motley Fool
