This month, a wave of selling wiped billions of shares from the market. Nasdaq-Composite down nearly 10% over the past 30 days. Recession fears have deeply worried investors after news broke that the U.S. added 114,000 jobs in July, compared to expectations for just 175,000.

However, the technology sector’s long history of growth and its reputation for delivering consistent and significant gains to shareholders over many years make it an attractive investment. Despite a sell-off, the tech-driven Nasdaq Composite is up 280% since 2014, so the recent declines actually represent an exciting investment opportunity and a chance to pick up some shares at a better price.

Markets such as artificial intelligence (AI), cloud computing, e-commerce, semiconductors and others still offer plenty of room for long-term growth and could drive the industry for decades to come.

So you have $5,000 to spare? Here are two tech stocks you can buy and hold for the long term. But even a smaller investment can go a long way in these companies.

1. Nvidia

NVIDIA‘S (NVDA 0.65%) The stock price has fallen 16% in the last month. The recent sell-off has not been particularly good for the world’s third most valuable technology company and the unofficial poster child for AI. However, at 21% below its all-time high in June, Nvidia shares remain an attractive option for long-term investors.

Despite recent declines, Nvidia has shown no signs that its profits will stop rising thanks to its leadership position in the chip market. The company is responsible for at least 80% of the AI ​​chip market, 91% of graphics processing units (GPUs) for data centers and 88% of desktop GPUs (chips sold directly to consumers).

According to a study by TechInsights, Nvidia shipped 3.76 million data center GPUs in 2023. For comparison, a total of 3.85 million data center GPUs were shipped during the year, if you include sales of AMD And Intel.

Nvidia’s success has led to a surge in profits and widened the company’s lead over its rivals. Since August last year, the chipmaker’s revenue and operating profit have risen 44% and 62%, respectively, while free cash flow has increased 112% to $15 billion. AMD’s free cash flow reached $439 million this year, while Intel posted negative $3 billion. Nvidia’s market dominance and its sizeable cash reserves will likely prove a formidable combination over the long term as demand for chips continues to rise and the company reinvests in its business.

Nvidia trades at 60 times earnings, which doesn’t sound like a bargain. However, that’s well below its five-year average of 80, suggesting an excellent time to buy the stock and hold it indefinitely.

For half of your $5,000, you could buy about 25 shares of Nvidia stock at the current price.

2. Amazon

Amazon (AMZN 0.25%) Microsoft’s stock has fallen 17% since early July amid a market decline, but the steady expansion of its cloud and advertising divisions shows a change in its business model that could pay off in the long term.

The company released its second quarter 2024 results on August 1 and presented a rather mixed picture. Revenue increased 10% year-over-year but fell short of expectations by $760 million. At the same time, earnings per share of $1.26 beat consensus estimates by $0.23, proving the effectiveness of recent cost-cutting measures. The company suffered from weaker-than-expected sales for the quarter, with sales of its online store increasing 5% year-over-year.

However, solid growth in its Amazon Web Services (AWS) cloud platform and advertising services strengthened the company’s long-term prospects. In the second quarter, AWS revenues rose 19% while operating profit grew 74%. At the same time, revenue from ads on platforms such as Prime Video increased 20% year-on-year as the segment continued its positive growth trend.

Retail remains a lucrative business. However, it can also be a weak point for Amazon, as the business is heavily dependent on the economy and consumer purchasing power. Therefore, solid growth in more stable sectors such as cloud computing and digital advertising is promising for Amazon’s future.

Amazon’s quarterly operating income and free cash flow have grown 31% and 186%, respectively, over the past year, largely due to AWS’s profitability. Along with a price-to-earnings (P/E) and price-to-sales (P/S) ratio that are both well below Amazon’s 10-year averages, the company’s stock is currently a no-brainer and worth at least half of your $5,000 investment. That $2,500 would buy you about 15 Amazon shares in the current position.