3 best tech stocks to buy right now

Tech stocks took it on the chin earlier this year. At one point, heavy tech Nasdaq Composite was down 32%.

The market has recently rebounded and investors are cautiously plunging into tech waters. However, if you are a long-term investor, there are still deals to be had regardless of how the market moves in the short term.

Many tech stocks remain well below their levels at the start of the year and are ripe for those looking to buy and hold. So here are my top three picks for tech stocks to buy right now.

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1.Alphabet

My first tech stock to buy right now is Alphabet (GOOG -0.55%). When considering the best stocks, Alphabet cannot be ignored. The company generates huge profits with impressive operating margins. Moreover, the title remains cheap on a historical basis.

And while the company reported somewhat disappointing results in late July, much of that was due to negative currency swings from the strengthening US dollar.

Overall, Google Search remains the leading Internet search provider and YouTube continues to generate billions in advertising revenue each quarter.

Google Cloud is struggling to gain market share in the lucrative cloud infrastructure market, and according to Synergy Research Group, Alphabet now has a 10% market share. Given how quickly the cloud market is growing, the segment represents a huge growth opportunity for the company.

For investors who want to play it safe with a tech mega-cap, Alphabet is a smart choice.

2.Spotify

The second tech stock to buy right now is Spotify Technology (PLACE -3.00%). While the business press remains obsessed with video “streaming wars”, the audio streaming market is often ignored.

And that’s a shame, because audio streaming is on the fire at present. In particular, podcasts have become a sensation. Spotify is capitalizing on this trend. The company has over 4 million podcasts available to stream and owns the exclusive rights to the Joe Rogan Podcast, arguably the most popular podcast to date.

Moreover, the company is growing its subscriber base even in the face of a global recession. In its recent earnings report, Spotify saw a 19% year-over-year increase in average daily users (AADs) and a 14% increase in paid subscribers. Advertising revenue jumped 31% and subscriber revenue increased 23%.

Spotify specifically noted stronger-than-expected growth in its Gen Z demographic in Latin America, showing that the company has appeal beyond its traditional stronghold in Europe and North America.

Meanwhile, CEO Daniel Ek’s recent $50 million purchase of Spotify stock demonstrates the CEO’s confidence that the company is on the right track. I agree, and I think investors would be wise to jump on the Spotify bandwagon before it leaves the station.

3.Roblox

My third and final tech stock to buy right now is a long-time personal favorite: Roblox (RBLX 2.67%). Shares plunged early in the year, hitting a 52-week low of $21.65 on May 10. Since then, stocks have rebounded and their price has more than doubled.

I love Roblox because it’s a web3 game. In short, Web3 is the next evolutionary phase of the Internet, where ordinary people will begin to “own” the Internet – or at least parts of it.

Roblox operates a digital platform that brings together digital actors and digital creators. Both use a virtual currency (Robux) as a medium of exchange. The sale of Robux is ultimately converted into revenue for the company when a player spends their Robux.

Players purchase Robux in fiat currency and then exchange it for power-ups, pets, and various forms of equipment for their virtual avatars. Creators receive a share of the Robux spent on their created items or “experiences”.

Because the creators of Roblox constantly compete for players’ Robux, “experiences” are frequently updated to include new challenges and items that keep players coming back.

The long-term potential is nearly limitless, limited only by the number of players on the platform and the imagination of the creators. The company continues to add daily average users (DAUs) at a steady rate. Since its May update, the company has reported 50.4 million DAUs, up 17% year-over-year.

Going forward, Roblox plans to hire advertisers to help diversify its revenue streams. The company has already announced partnerships, including a deal with Spotify. For investors keen to exit what is undoubtedly a volatile name, buying Roblox is a smart way to bet on Web3.

Suzanne Frey, an executive at Alphabet, is a board member of The Motley Fool. Jake Lerch holds roles at Alphabet (C-shares), Roblox Corporation, and Spotify Technology. The Motley Fool owns and recommends Alphabet (A shares), Alphabet (C shares), Roblox Corporation and Spotify Technology. The Motley Fool has a disclosure policy.

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