Every investor wants to grow their portfolio. A larger portfolio gives investors more financial flexibility, makes retirement more feasible, and results in hitting key milestones sooner. However, investors must incur a level of risk to potentially increase the return on their capital.
Disruptive tech stocks offer investors a compelling opportunity. These corporations can continue to grow revenue and earnings by tapping into innovations. Investors can tap into considerable upside by looking for disruptive stocks.
These three investments show promise and can expand their market share in the years ahead.
Microsoft (NASDAQ:MSFT) is a tech conglomerate with exposure to several high-growth verticals. Artificial intelligence, cloud computing, and gaming are some of the company’s business opportunities.
Microsoft recently surpassed a $3 trillion market cap and looks ready to continue the momentum. The company reported 13% year-over-year revenue growth in the first quarter of fiscal 2024.
Top performing segments include office commercial products, cloud services revenue, dynamics products revenue, intelligent cloud, and Xbox revenue. While these segments get the most mention, Microsoft also has a vibrant advertising segment through Bing, LinkedIn, and other assets. Advertising revenue excluding traffic acquisition costs increased by 10% year-over-year.
Microsoft is one of the leaders in artificial intelligence. The rapidly growing industry can help Microsoft achieve high revenue and earnings growth for several years. The company has also invested in quantum computing which has great potential.
Shares are up by 69% over the past year. MSFT stock has gained 280% over the past five years.
Palo Alto Networks (PANW)
Palo Alto Networks (NASDAQ:PANW) is a leading cybersecurity firm. As cyberattacks become more common, businesses will increasingly turn to Palo Alto Networks’ solutions.
Hackers will become more plentiful due to advanced tools and the lucrative nature of both sides of the industry. Multi-extortion ransomware attacks went up by 37% year-over-year while the average ransomware payment increased by 28% year-over-year. These attacks are happening more often and are also getting more expensive for hacked businesses.
The company has made a few acquisitions to expand its market share in the high-growth cybersecurity industry. Palo Alto Networks completed an acquisition of Dig Security and finalized another acquisition for Talon Cyber Security.
The company has a robust financial foundation that supports these acquisitions. Investors saw that financial strength in full display to start fiscal 2024. Palo Alto Networks increased revenue by 20% year-over-year and saw GAAP net income jump from $20.0 million to $194.2 million.
It’s hard to find a stock that presents the same appreciation and dividend growth potential as Broadcom (NASDAQ:AVGO). The tech firm has consistently delivered on both fronts, registering a 368% gain over the past five years.
Artificial intelligence thrusted Broadcom and other semiconductor stocks into the spotlight last year. Investors still seem to be loading up on the stock as it is up by 15% year-to-date.
Broadcom has a vast portfolio filled with over 23,000 patients. The company invested over $5 billion dollars into research and development for fiscal year 2023. While semiconductor solutions are the bulk of Broadcom’s revenue, more than one-third of its revenue comes from infrastructure software.
Broadcom’s infrastructure software consists of cybersecurity, cloud infrastructure, storage area networking, mainframe, and distributed. The firm’s recent acquisition of VMware will give this segment a boost in 2024.
Broadcom has robust profit margins and continues to grow. Even with the stock’s incredible growth over the past five years, shares still have a respectable 1.70% dividend yield. Broadcom is likely to become a trillion-dollar company within the next few years.
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