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What Are 2 Great Tech Stocks to Buy Right Now? | The Motley Fool

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  Published in Stocks and Investing on Sunday, September 28th 2025 at 2:57 GMT by The Motley Fool
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What Are Two Great Tech Stocks to Buy Right Now?
An In‑Depth Look at the Motley Fool’s 2025 Recommendation

On September 27, 2025, The Motley Fool published a fresh set of investment ideas for the technology sector, spotlighting two companies that the writers believe offer the best blend of growth potential, valuation, and risk management. The article—“What Are Two Great Tech Stocks to Buy Right Now?”—is a concise but data‑rich recommendation that draws on recent earnings data, macro‑economic trends, and company‑specific catalysts. Below is a comprehensive summary of the key take‑aways, including insights gleaned from the article’s linked research pieces.

1. The Two Star Picks: NVIDIA and Microsoft

The authors focus on two heavyweights that represent opposite ends of the tech spectrum: a pure‑play semiconductor company and a diversified cloud‑and‑software powerhouse. The logic behind pairing these two is simple: they are both leaders in growth markets, yet they offer very different risk profiles and portfolio diversification benefits.

1.1 NVIDIA – The AI GPU Leader

NVIDIA has historically benefited from gaming demand, but the past few quarters have shown a dramatic pivot to artificial intelligence (AI). According to the article:

• Revenue Growth: NVIDIA posted a 52% year‑over‑year (YoY) increase in revenue in its Q3 2025 earnings, largely driven by its Data Center segment.
• Profitability: Gross margins stayed above 70%, showcasing efficient scale in high‑margin GPU sales.
• Free Cash Flow (FCF): FCF surged to $3.7 billion, underscoring the company’s ability to invest in R&D while returning cash to shareholders.
• Valuation Context: Even with a price/earnings ratio (P/E) of ~45, the stock remains under the median industry valuation of 55 for AI‑focused semiconductors, according to the linked “AI Market Valuation Trends” article.
• Catalysts: The launch of the next‑generation H100 GPU is expected to capture a larger share of data‑center traffic, while strategic partnerships with cloud providers (AWS, Google Cloud) provide a stable revenue stream.

Link Worth‑reading: The article cites a Motley Fool piece on “How NVIDIA’s GPU Technology Powers AI,” which breaks down the technical advantages of H100 over its predecessors and the expected adoption curve across data‑center operators.

1.2 Microsoft – The Cloud & Software Juggernaut

Microsoft’s story is one of steady, diversified growth. While the cloud division (Azure) has outpaced revenue growth, the company’s Office suite, LinkedIn, and gaming division provide a safety net.

• Revenue & Growth: In Q3 2025, Microsoft posted a 16% YoY increase in total revenue, with Azure alone contributing a 31% jump.
• Profitability: Net income margin sits at 38%, and the company consistently reports a return on invested capital (ROIC) above 20%.
• Valuation & Dividends: With a P/E of ~34, Microsoft remains fairly valued compared to its peers. Additionally, the company pays a 2% dividend and has a long history of increasing payouts.
• Future Outlook: The article projects a 10% CAGR for Azure through 2029, citing continued enterprise migration to hybrid cloud and the rise of AI services like Azure OpenAI.

Link Worth‑reading: The article links to “Microsoft’s Strategic Expansion in AI and Cloud,” which details how Microsoft’s integration of AI across its product suite is expected to drive both new and cross‑sell revenue.

2. Macro‑Trends Fueling the Picks

The authors weave broader macro‑economic themes into their analysis. Two key trends stand out:

1. AI as a Driver of Corporate Spending – The adoption curve for AI across industries continues to accelerate, making GPUs and cloud infrastructure essential. This is supported by the Motley Fool’s “Why AI Is The Future Of Enterprise IT” piece, which shows that 73% of surveyed CFOs plan to double AI spend in the next two years.

2. Post‑Pandemic Cloud Migration – Remote work has institutionalized hybrid work models, cementing the need for scalable cloud services. Microsoft’s Azure is positioned as a leader in hybrid deployment through Azure Arc and Azure Stack, while NVIDIA’s GPUs provide the backbone for AI workloads in the cloud.

3. Risk Assessment & Counter‑Positions

The article takes a balanced view by discussing potential headwinds:

• For NVIDIA
  - Supply Chain Risks – The company’s reliance on advanced fabrication plants in Taiwan and China exposes it to geopolitical tensions and chip shortages.
  - Valuation Sensitivity – A 10% drop in the AI sector’s demand could translate into a steep sell‑off, given the high P/E.

• For Microsoft
  - Competitive Pressure – Amazon Web Services (AWS) remains the largest cloud provider, and Amazon’s AI initiatives could threaten Azure’s share.
  - Regulatory Scrutiny – The EU’s digital market regulations could impose constraints on large cloud providers, impacting growth.

The authors also recommend diversifying across multiple tech sub‑sectors, citing their “Diversify Tech Exposure Without Overpaying” guide, which highlights alternative growth names like Snowflake, CrowdStrike, and Salesforce.

4. Bottom Line: Why These Two

The Motley Fool’s recommendation hinges on three core arguments:

1. Strong, Consistent Earnings Growth – Both companies demonstrate year‑over‑year revenue and margin expansion, signaling robust demand.
2. Low to Moderate Risk Relative to the Sector – Despite high valuations, the companies have strong balance sheets and low debt, which buffers against economic shocks.
3. Long‑Term Catalysts – AI and cloud adoption trends are expected to grow at double‑digit rates over the next decade, providing a tailwind for both NVIDIA and Microsoft.

5. How to Get Started

The article suggests a dollar‑cost averaging approach for both stocks, beginning with a small allocation and scaling up as earnings season confirms growth trajectories. It also advises investors to:

• Set Clear Targets – Use a 20–30% upside target based on the 2025 earnings guidance.
• Monitor Key Metrics – Keep an eye on GPU demand curves, Azure revenue growth, and any changes in supply‑chain dynamics.
• Diversify – Pair these picks with defensive or cyclical tech stocks to mitigate volatility.

6. Final Takeaway

In an era where AI and cloud are becoming core infrastructure for almost every business, the Motley Fool’s 2025 recommendation to buy NVIDIA and Microsoft is rooted in data, valuation logic, and macro‑economic trends. Whether you’re a seasoned portfolio manager or a casual investor, the two stocks offer a compelling blend of growth, stability, and diversification. By following the linked research and keeping an eye on the outlined risk factors, investors can make informed decisions about incorporating these tech leaders into their portfolios.