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3 Top Tech Stocks to Buy Right Now

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

The market has recently bounced back, and investors are cautiously dipping their toes into the tech waters. However, if you're a long-term investor, there are still deals to be had, no matter which way the market moves in the short term.

Many tech stocks remain well below where they started the year and are ripe for those willing to buy and hold. So here are my top three picks for tech stocks to buy right now.

Image Source: Getty Images.

1. Alphabet

My first tech stock to buy right now is Alphabet (NASDAQ: GOOG). When considering top stocks, Alphabet can't be ignored. The company generates massive profits with impressive operating margins. Moreover, the stock remains cheap on a historical basis.

And while the company reported somewhat disappointing earnings results in late July, much of that was due to negative foreign exchange fluctuations due to the strengthening of the U.S. dollar.

Overall, Google Search remains the leading internet search provider, and YouTube continues to generate billions in ad revenue every quarter.

Google Cloud is working to gain market share in the lucrative cloud infrastructure market, and according to Synergy Research Group, Alphabet now has a 10% market share. Considering how quickly the cloud market is growing, the segment represents an enormous 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 (NYSE: SPOT). While the business press remains fixated on the video "streaming wars", the audio streaming market often goes ignored.

And that's too bad, because audio streaming is on fire right now. 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 exclusive rights to the Joe Rogan podcast, arguably the most popular podcast to date.

What's more, the company is growing its subscriber base even in the face of a global recession. In its recent blowout earnings report, Spotify posted a 19% year-over-year increase in daily average users (DAUs) and a 14% increase in paid subscribers. Ad-generated revenue jumped 31%, and subscriber revenue increased 23%.

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

Meanwhile, chief executive officer Daniel Ek's recent purchase of $50 million worth 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 train before it leaves the station.

3. Roblox

My third and final tech stock to buy right now is a long-standing personal favorite: Roblox (NYSE: RBLX). Shares plunged at the start of the year, hitting a 52-week low of $21.65 on May 10. Since then, shares have bounced back and more than doubled in price.

I love Roblox because it's a play on Web3. In short, Web3 is the next evolutionary phase of the internet, where ordinary people will begin "owning" the internet -- or at least certain parts of it.

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

Players purchase Robux using fiat currency, then trade it for power-ups, pets, and various forms of gear for their virtual avatars. Creators receive a cut of the Robux spent on their created items or "experiences".

Because Roblox creators constantly compete with one another for players' Robux, the "experiences" are frequently updated to include new challenges and items that keep players coming back.

The long-term potential is almost limitless, bound only by the number of players on the platform and the creators' imagination. The company continues to add daily average users (DAUs) at a steady clip. As of its May update, the company reports 50.4 million DAUs, up 17% year-over-year.

Looking ahead, Roblox plans to engage advertisers to help diversify its revenue stream. The company has already announced some partnerships, including a deal with Spotify. For investors willing to ride out what is an undoubtedly volatile name, buying Roblox is one smart way to place a bet on Web3.

10 stocks we like better than Alphabet (C shares)
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet (C shares), Roblox Corporation, and Spotify Technology. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Roblox Corporation, and Spotify Technology. The Motley Fool has a disclosure policy.


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