Tech Giants' Valuations Return to Normal: 8 Outstanding Companies Investors Must Watch in 2024

The US Tech Stocks sector has experienced significant adjustments over the past two years. Popular concepts such as Crypto, NFT, and the Metaverse, which once soared, have cooled off, and the entire industry has entered a phase of revaluation. This creates a rare opportunity for long-term investors—those with solid fundamentals in tech leaders are beginning to show clear signs of undervaluation.

Why Now Is a Good Time to Allocate to Tech Stocks

The cyclical nature of the tech industry often brings investment opportunities. When the market shifts from frenzy to rationality, truly competitive companies become more attractive due to share price corrections. Since 2022, we have witnessed a renewed recognition of Tech Stocks—the focus has shifted from chasing concepts to core indicators such as profitability, cash flow, and user stickiness.

In-Depth Scan of 8 Tech Stocks

The largest market cap search giant: Google (GOOG.US)

Fundamental Data: Market cap $1.17 trillion | EPS $5.10

The emergence of ChatGPT once raised doubts about Google’s search dominance. After the underperformance of the Bard system, Google’s stock price plunged significantly, with a market cap evaporating over $100 billion. However, a calm review shows this concern was an overreaction.

According to the latest 2024 search market data, Google still controls over 89.9% of global search traffic, a market share almost impossible to challenge. Conversational AI is unlikely to change user search habits in the short term—convenience and accuracy remain essential. Plus, Google’s own AI technology accumulation is not inferior, and long-term, the search leader’s position remains rock solid.

Investment Logic: Dominant position + valuation correction = a good long-term holding opportunity.

Absolute winner in the chip industry chain: NVIDIA (NVDA.US)

Fundamental Data: Market cap $510 billion | EPS $4.34 | Dividend yield 0.08%

If 2023 had a biggest “hype” winner, it would be NVIDIA. ChatGPT, Google Bard, Baidu Wenxin Yiyan—these top AI applications all rely on NVIDIA’s chips. Not only internet giants, but also Microsoft, Oracle, Google Cloud, and other cloud service providers are competing to collaborate with NVIDIA, jointly building the AI cloud ecosystem.

Chip manufacturing has a unique trait: once a company becomes the industry standard supplier, it tends to dominate the market—an effect known as “kingmaker.” NVIDIA exemplifies this role. From data center chips to consumer GPUs, NVIDIA has established an insurmountable moat.

Investment Logic: Explosive growth in AI chip demand + monopoly position + industry cycle upward.

Dual drivers: Cloud computing and semiconductors: Broadcom (AVGO.US)

Fundamental Data: Market cap $240 billion | Dividend yield 3.19% | EPS $40.76

Broadcom’s business logic is relatively understated but highly resilient. Its main revenue sources include semiconductors, cloud computing, IoT, and 5G infrastructure—areas expected to grow rapidly over the next five years.

Particularly noteworthy is Broadcom’s dividend policy. A 3.19% yield far exceeds the market average of 1.7%, and has grown at nearly 30% annually over the past five years. Holding Broadcom allows investors to share in the company’s growth while receiving stable cash returns. For conservative income-focused investors, this is a rare choice.

Investment Logic: Strong industry demand + high dividend yield + dividend growth potential.

The moat of the consumer electronics empire: Apple (AAPL.US)

Fundamental Data: Market cap $2.36 trillion | Dividend yield 0.62% | EPS $5.99

Berkshire Hathaway, led by Warren Buffett, is famously committed to Apple—by November 2024, Apple accounted for 26.2% of its portfolio, making it the largest holding. This alone reflects a top investor’s view: Apple’s fundamentals are worth long-term holding.

Apple’s true value lies not just in hardware sales but in the service ecosystem built around 2.2 billion active devices. User dependence and loyalty to Apple’s ecosystem are continuously increasing, directly driving service revenue growth. Once users enter the Apple ecosystem, switching costs become very high—this is the core of Apple’s moat.

Investment Logic: User stickiness + service revenue growth + long-term value.

Streaming media’s dilemma and opportunity: Netflix (NFLX.US)

Fundamental Data: Market cap $149.1 billion | EPS $11.42

Netflix experienced a long period of user growth stagnation, which pressured its stock price. But recent changes are noteworthy. As household entertainment demand continues to grow, Netflix is adjusting its business model—from a pure subscription model to a “subscription + advertising” dual-track system.

This adjustment appears reactive but is actually a proactive response to market trends. The latest earnings report shows this innovation is already delivering tangible results: subscriber numbers exceeded market expectations, and growth has restarted.

Investment Logic: Business model innovation shows results + user growth turns positive + cash flow improves.

Long-term winner in enterprise software: Adobe (ADBE.US)

Fundamental Data: Market cap $159.6 billion | EPS $15.28

Most computer users have used Adobe products—PDF readers, Photoshop, Premiere, etc.—which have become industry standards. This widespread application ensures a continuous customer base.

More importantly, Adobe is not resting on its laurels. The latest earnings show its Document Cloud products are becoming a new growth engine. Even amid economic uncertainty, management remains confident in sustained growth, indicating Adobe is finding new growth drivers through product innovation.

Investment Logic: Stable market position + strong product innovation + growth momentum shift.

New blue ocean in e-commerce advertising: Amazon (AMZN.US)

Fundamental Data: Market cap $9.816 trillion | EPS $1.51

Amazon continues to show resilience amid macroeconomic downturns. The most direct evidence is its strong growth in advertising—Amazon is capturing market share from Google, Meta, and Snap in search and social advertising, while these competitors’ ad businesses are nearly stagnant.

Another overlooked advantage is its streaming subscription business. Despite raising subscription prices, customer churn remains low, demonstrating strong user loyalty to Prime membership.

Investment Logic: High-growth advertising + strong streaming user stickiness + solid fundamentals.

Revival of the payment ecosystem: PayPal (PYPL.US)

Fundamental Data: Market cap $85 billion | EPS $4.89

PayPal’s stock fell over 80% in 2022, with the decline far exceeding its business slowdown, indicating a severe valuation overreach. However, from a business perspective, PayPal’s FY2022 growth remained steady, suggesting the market’s pessimism was overdone.

Latest data shows PayPal’s forward P/E ratio is only 21, relatively low in recent years. Plus, with 435 million active accounts and management’s commitment to use 75% of free cash flow for share buybacks, it offers long-term investors attractive prospects.

Investment Logic: Undervalued + large active user base + ample cash flow + buyback plans.

Summary and Reflection

Investment opportunities in Tech Stocks are often hidden in pessimism. When the market shifts from chasing concepts to rational valuation, companies with solid fundamentals and clear competitiveness tend to undergo a revaluation. The 8 US Tech Stocks above each have their own logic—whether you pursue long-term value or focus on cash returns, you can find suitable targets. The key is to have confidence and hold onto truly valuable companies when market sentiment is extremely pessimistic.