After a brief downturn to begin the year, technology stocks are once again rallying. Mega-cap tech stocks, in particular, continue to outperform the broader market. Many of the best-performing stocks of 2023 continue to post impressive gains at the outset of 2024. For example, shares of chipmaker Nvidia (NASDAQ:NVDA) gained over 10% so far in January after the stock led the benchmark S&P 500 index throughout last year. How long the current rally will last remains to be seen, but investors continue to favor growth over value when it comes to stocks, with the tech-laden Nasdaq index having increased more than 40% during 2023. With the bulls continuing to run on Wall Street, we look at the three best tech stocks to buy in January 2024.
Microsoft (MSFT)
There have been two interesting pieces of news concerning Microsoft (NASDAQ:MSFT) recently. The first is that Satya Nadella was named “CEO of the Year” by CNN Business for his leadership role in AI. The second is Microsoft is on the cusp of replacing Apple (NASDAQ:AAPL) in terms of market capitalization to become the world’s most valuable publicly traded company. These positive developments come as MSFT stock rose 61% in the last 12 months.
Microsoft continues to lead the commercialization and monetization of AI technologies, introducing AI-powered versions of its flagship products such as Word, PowerPoint and Excel. To start 2024, the company announced that keyboards on upcoming Windows personal computers (PCs) will feature a Copilot key enabling immediate access to its AI assistant. The Copilot key is being called the most significant change to the Windows keyboard since the 1994 introduction of the Windows menu key.
Microsoft is expected to continue rolling out new AI models and features throughout the coming year.
Amazon (AMZN)
E-commerce giant Amazon (NASDAQ:AMZN) continues to make improvements as it seeks to control costs and boost profitability. Most recently, the company announced it is cutting hundreds of entertainment jobs at its film and television studios, as well as its Twitch videogame-streaming platform. The latest layoffs come after Amazon eliminated 27,000 jobs in 2023 as it moved to get costs under control following a rapid expansion during the Covid-19 pandemic.
The new round of staff cuts also comes as Amazon modifies its Prime streaming service, raising prices and adding advertisements to the platform. Twitch, owned by Amazon, said it is cutting just over 500 jobs as the new year begins. Analysts praise the company’s moves and its stock. Morgan Stanley (NYSE:MS) just raised its price target on the stock to $185 from $175, citing the addition of Prime Video ads and improvements in retail profitability as reasons to be bullish.
AMZN stock is up 63% in the last 12 months.
Tesla (TSLA)
It remains volatile and risky, but electric vehicle (EV) maker Tesla’s (NASDAQ:TSLA) stock is certainly looking more affordable having declined 9% since the start of the year. In the last six months, the share price has fallen 16%. The pullback results from subpar financial results and news that Tesla is no longer the top-producing EV company in the world. It lost the crown to Chinese automaker BYD (OTCMKTS:BYDDY). However, Tesla isn’t taking the decline lying down. The company is fighting back.
In recent days, Tesla unveiled a new version of its Model 3 electric sedan for the North American market as it tries to boost slumping sales. The new Model 3 includes a longer driving range and a rear video display for backseat passengers. Tesla also changed the wheel design and the vehicle is now available in two new colors. The Model 3 remains priced between $38,990 and $45,990, depending on the model chosen.
The new EV was first made available in China last September. It went on sale in Europe in October. The refreshed EV is just one step the company is taking to get back on track in 2024. Despite the recent drop, TSLA stock is still 84% higher than where it was a year ago.
On the date of publication, Joel Baglole held long positions in NVDA, MSFT and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.