Technology companies performed well in 2023, as shown by the Nasdaq-100 Technology Sector index's 67% rise, and the sector is exhibiting positive indications again this year. History implies that the Nasdaq-100 Technology Sector index could finish 2024 with substantially bigger gains than 7%. Capex.com reports that the Nasdaq-100 had gained 24% in the year after a 40%+ increase, save for 1999.
A strong U.S. economy and falling inflation might help the Nasdaq rise again in 2024. Microsoft (NASDAQ: MSFT) and Micron Technology (NASDAQ: MU) are outstanding tech companies to buy now. These two firms have favorable values and are poised to benefit on fast-growing cloud computing and semiconductor markets. Let's examine why Microsoft and Micron are worth buying today.
1. MS Microsoft stock trades 36 times trailing earnings. That's slightly higher than the Nasdaq-100's 33 P/E. Microsoft's forward earnings multiple of 31 is close to the index average.
Given Microsoft's rising cloud computing supremacy, buying it at this valuation makes sense. Synergy Research Group reported that Microsoft's Azure cloud held 24% of the cloud infrastructure market in Q4 2023, up 1% from the previous year.
Additionally, cloud infrastructure investment rose 20% in the fourth quarter of 2023, compared to the market's 19% rise for the year. Synergy Research says generative AI drove the market's better growth last quarter.
However, cloud computing AI usage is just beginning. The cloud AI business could be worth $67 billion in 2024, according to Mordor Intelligence, a large portion of the $270 billion cloud computing market. However, the cloud AI market is predicted to earn $274 billion by 2029.
Microsoft investors should be pleased with its progress in this fast-growing segment. Microsoft Azure cloud revenue rose 30% last quarter, compared to Amazon Web Services' 13% growth
Microsoft's cloud business grew six percentage points last quarter thanks to AI, closing the gap with the market leader.
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