3 Tech Stocks You Can Buy and Hold for the Next Decade

Technology companies are the growth stock darlings of the stock market, and for good reason. The "Magnificent Seven's" dominance has propelled the Nasdaq Composite to new heights this year, with the technology-heavy index up more than 28% year to date to surpass the 19,000 level.

However, there are other technology stocks apart from the Magnificent Seven demonstrating great long-term potential that you can consider owning for the long term. These businesses should ideally display strong top-line growth, be adept at solving customers' pain points and enabling greater efficiency, and possess tailwinds that allow them to continue to grow their top and bottom lines over time.

Today, let's shine a spotlight on three worthy technology stocks that deserve a place in your investment portfolio.

Image source: Getty images.

1. Toast

Toast (NYSE: TOST) operates a cloud-based restaurant management platform that offers food and beverage businesses with the tools they need to run their businesses, ranging from point-of-sale ordering and operations to digital ordering and loyalty programs.

By providing an all-in-one software solution and removing its customers' pain points, the company has enjoyed widespread adoption of its platform over the last several years. Revenue more than doubled from $1.7 billion in 2021 to $3.9 billion in 2023, with subscription services revenue nearly tripling over the period from $169 million to $500 million. The business's cash flow profile has also improved dramatically, going from a negative free cash flow of $17 million in 2021 to generating a positive free cash flow of $93 million by 2023.

Toast continued to demonstrate healthy growth momentum in the first nine months of this year. Revenue climbed 28% year over year to $3.6 billion, while gross profit shot up 41% to $857 million. The business continued to churn out healthy positive free cash flow of $172 million, up sharply from just $12 million in the previous corresponding period.

The company also saw its annual recurring revenue for the third quarter rise 28% year over year to $1.6 billion, while gross payment value across its platform increased by 24% to $41.7 billion. These signs are pointing to increased platform usage as the company continues to onboard more locations. Total locations have increased to 127,000 by the end of September, jumping 28%.

Management believes opportunities abound for the business to continue growing, as restaurants constitute one of the largest industries in the U.S. These are complex businesses with many moving parts, and so more restaurant owners will likely find Toast's vertically integrated cloud platform a boon for their business.

During its recent Investor Day, management communicated its intention to expand Toast's restaurant total addressable market globally. There are around 875,000 restaurants in the U.S., but in the future, Toast's global restaurant total addressable market (excluding China) will number close to 15 million. With 127,000 locations under its belt, this represents just 14.5% penetration, implying a significant market opportunity for Toast to expand further.

The company is also working on more product enhancements to garner greater loyalty and market penetration.

2. ServiceNow

ServiceNow (NYSE: NOW) operates a platform that sits atop organizations' existing data and systems to help automate tasks and processes across the business. Its Now platform makes use of artificial intelligence (AI) and machine learning to help control costs and make work more efficient for clients.

The company has seen impressive top- and bottom-line growth over the years, with revenue rising from $5.9 billion in 2021 to $9 billion in 2023. ServiceNow's net income jumped from just $230 million to $1.7 billion over the same period. A tax credit in 2023 boosted net profit that year, but the company's profit before tax in 2023 was already four times higher than that of 2021, showcasing tremendous growth over just two years. Free cash flow improved from $1.8 billion in 2021 to $2.7 billion in 2023.

The business continued to shine in the first nine months of 2024 as revenue rose 22.8% year over year to $8 billion. Operating income more than doubled to $990 million, while profit before tax also doubled. (Note: Profit after tax for the prior year was distorted by the above-mentioned tax credit.)

Free cash flow generation stayed healthy at $2 billion and was nearly 50% higher than the $1.4 billion churned out a year ago. ServiceNow reported remaining performance obligations of $9.4 billion, up 26% year over year, and saw 15 transactions with more than $5 million in net annual contract value for the third quarter, up an impressive 50%.

Investors can expect more growth as ServiceNow harnesses AI to introduce hundreds of additional, new capabilities for various sectors such as telecom, media, and financial services. Its new Agentic AI will be integrated into the ServiceNow platform to provide 24/7 productivity for clients.

The company's global expansion is gaining traction with the launch of a new data center pair in Milan and Rome, along with plans to invest $1.5 billion in its U.K. business over the next five years to increase head count, office space, and AI skills programs.

ServiceNow is also growing via acquisitions, with its recent July acquisition of Raytion to enhance its generative AI-powered search functions and knowledge management capabilities. With a forecast total addressable market of $275 billion by 2026 announced during its Analyst Day, the company still has massive opportunities to grow its top and bottom lines for the foreseeable future.

3. Intuit

Intuit (NASDAQ: INTU) offers a global financial technology platform to help customers file their accounting financial statements and taxes efficiently and expediently. With around 100 million customers worldwide using its QuickBooks accounting software and TurboTax tax filing software, Intuit helps to reduce complexity and make filing easier for its customers.

The company reported solid revenue and profit growth and looks well-positioned to continue growing. Revenue increased from $12.7 billion in fiscal 2022 (ended July 31) to $16.3 billion in fiscal 2024. Net income went from $2.1 billion to close to $3 billion over the same period. Importantly, Intuit generated increasing free cash flow over the years, going from $3.7 billion in 2022 to $4.6 billion in 2024.

Management hosted an Investor Day in September, where it highlighted a massive total addressable market of $326 billion. Intuit has only a 5% penetration rate, and this large addressable market represents a golden opportunity for the business to expand globally while growing its core U.S. base.

In the small and medium businesses (SMB) segment, the customer total addressable market stood at 47 million, while the consumer market is significantly larger at 242 million. By rolling out a variety of solutions for SMBs and consumers, Intuit can expand its customer base and capture a larger share of the pie.

The company has set bold goals for 2030. It intends to double household savings rates and improve business success rates while building up a reputation for being a best-in-class company that consumers trust. The plan is to double its current customer count to 200 million in six years, which should help to accelerate its top-line growth.

Intuit's AI-driven approach, combined with its strong franchise and suite of useful software applications, should help to drive the growth of the business for many more years.

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Royston Yang has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuit, ServiceNow, and Toast. The Motley Fool has a disclosure policy.