2 of the most important technical stocks to buy now and keep for the next 10 years

The S&P 500 Information Technology The index is down 24% from its high, putting the sector in a bear market. But over the past decade, the index is still up 404%, easily surpassing the 193% return from the broader range. Standard & Poor’s 500. This data makes a strong argument for adding at least a little technical exposure to your portfolio.

With that in mind, Adobe (ADBE -1.35%) And Cloud Flare (Clear 1.73%) They seem like two smart long-term investments. Here’s why.

Image source: Getty Images.

1. Cloudflare

Cloudflare operates a global cloud platform. Its portfolio includes a suite of applications, networking, and security services, which collectively help its customers accelerate and protect their IT systems. The company also provides tools for developers that make it possible to create and publish apps and websites directly on its highly secure, low-latency network.

Cloudflare’s massive infrastructure is one of its main advantages. The company has servers in 270 cities across more than 100 countries, and its platform connects with more than 10,500 other networks. What does it mean? This means that Cloudflare is fast. Internal studies have shown that its cloud platform can consistently outperform other vendors, including tech giants like the alphabet And Amazon. And Forrester Research Cloudflare was recently recognized as the best high-end development platform on the market, citing strong current supply and a stronger growth strategy.

This competitive advantage led to another round of impressive financial metrics in the first quarter. The paying rate for customers increased 29% to 154,000, and the average customer spent 27% more. Revenue rose 54% to $212 million, and the company achieved a non-GAAP (an average) Earning of $0.01 per diluted share, up from a loss of $0.03 per diluted share in the prior year. This may not sound impressive, but management plans to run the business at a breakeven point in terms of profitability. With a market opportunity of $86 billion, it makes sense to invest aggressively and enhance its competitiveness.

Valuation makes Cloudflare riskier than the stocks discussed in this article. Even after dropping 74%, the shares are still trading at more than 27 times sales. However, the stock is cheaper today than it was at any time last year. Given Cloudflare’s financial history and strong competitive position, I think this technology stock is worth buying.

2. Adobe

Software giant Adobe is a major enabler of digital transformation. Its digital media portfolio includes a range of creativity software, and many of its products have become the gold standard in their respective industries. It includes Photoshop for image editing, Premiere Pro for video editing, and Illustrator for vector graphics. Adobe’s digital media division also includes Acrobat, a ubiquitous application for creating, editing, and sharing digital documents.

Likewise, on the digital experience side, Adobe offers solutions for analytics, marketing, and commerce. These tools help organizations engage and delight consumers with personalized content. While Adobe is known for its creative software, many products in this side of the business are equally popular. For example, Adobe was recognized by Forrester Research as a leader in enterprise marketing software in 2021, and Gartner Named Adobe as a leader in digital experience platforms in 2022.

In short, Adobe provides two complementary suites of software that collectively facilitate the creation and delivery of digital content. Even better, the company has achieved a strong competitive position in a number of different markets. This translated into strong financial results. Last year, revenue rose 18% to $16.1 billion, driven by double-digit growth in both digital media and the digital experience, and free cash flow jumped 18% to $6.8 billion.

Going forward, the company is setting its target market at $205 billion by 2024. Adobe is well positioned to take advantage of this opportunity. Our industry-leading product assortment and ability to innovate should drive growth for many years to come. And with newer creativity tools like Substance for 3D design and Aero for augmented reality, Adobe could be a major player in the multi-trillion dollar metaverse industry. This is why this growth stock is a smart buy today.

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