UK stocks have suffered for the most part over the last 12 months. At the same time, the major US stock indexes have flourished. That’s particularly the case for many companies in the tech sector.
UK investors can invest in US stocks in a number of ways. For example, I could invest in an exchange-traded fund (ETF) that tracks a specific index such as the NASDAQ.
Due to advances in online trading, however, it’s just as easy to invest in individual US companies through a share dealing account. With the sheer amount of listed companies available on the NASDAQ, Dow Jones, and the S&P 500, I prefer to narrow my options to some of the biggest, most well-known US stocks.
The NASDAQ 100 is made up of the biggest stocks in the index by market cap. It includes some of the well-known names in the tech sector. Think Amazon, Facebook, Tesla, etc.
I’ve had a look at the NASDAQ 100 and picked two US stocks I would add to my portfolio for long-term growth.
Some may not have heard of this company, but Alphabet (NASDAQ:GOOGL) is the parent of online advertising giant Google.
Google is one of the largest companies in the world by market cap, making profits for the most part through online advertising via its search engine, YouTube, and other platforms.
The company controls a significant (some would say anti-competitive) share of the online advertising industry. It has shown an ability to innovate and grow via new platforms and generate more profits.
Google recently announced it would be launching YouTube Shorts, ostensibly to compete with the rise of the likes of TikTok.
Alphabet shares have grown more than 97% since their low of $1,055 at the onset of the pandemic, and have a history of major growth.
There is risk involved in buying shares in Alphabet, however. Google is coming under increased scrutiny from governments and regulatory bodies over what some view as anti-competitive practices. The most recent example of this is when the Australian government passed new laws requiring the likes of Google and Facebook to pay for certain news content in a bid to aid traditional media outlets.
Other governments have indicated that similar action may be taken in their countries, including the UK and Canada.
However, I’d still add Alphabet to my US stocks portfolio due to its history of profit growth and position in the market.
Another US tech stock I like at the moment is cybersecurity company Nvidia (NASDAQ:NVDA). This company makes graphics processing units (GPUs), most commonly used in the gaming world.
The Nvidia share price has rocketed as the popularity of online gaming has increased and US tech stocks continue to boom. The shares are up 121% in the last 12 months.
Nvidia is experiencing strong demand for its products and is working to scale up its supply in order to keep up with that demand.
The shares are not cheap, and the risk is that much of the good news is already priced into the market. There is also a fear that the significant growth experienced by the company in the last number of years may slow in years to come.
But based on current demand and that its key gaming market is likely to require constant innovation, I would still buy the shares today.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. conorcoyle has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Alphabet (A shares) and NVIDIA. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.