3 tech share ideas for 2023

All information is correct as at 31 December 2022 unless otherwise stated.

2022 was a tough year for tech, but are there still opportunities?

We take a closer look at three share ideas for 2023 and beyond.

This article isn’t personal advice, if you’re not sure if an investment’s right for you, seek advice. All investments fall as well as rise in value, so you could get back less than you invest.

Investing in individual companies isn’t right for everyone. That’s because it’s higher risk, your investment depends on the fate of that company. If that company fails, you risk losing your whole investment. If you cannot afford to lose your investment, investing in a single company might not be right for you. You should make sure you understand the companies you’re investing in and their specific risks. You should also make sure any shares you own are part of a diversified portfolio. Ratios and figures shouldn’t be looked at in isolation.

Alphabet

Alphabet’s an essential channel for any business that wants to have its products or services reach a mass audience. Whether it’s Google or YouTube, the customer base is about as sticky as it comes in the advertising world. That should hold Alphabet in good stead compared to peers, even if advertising spend continues to slow through 2023.

Profits from the core business, alongside the mammoth $100bn+ of net cash, can be piled into new growth ventures. Not all these projects turn into something tangible, but Google Cloud’s an example of one that has. Revenue’s growing fast and profitability could come in the next year or two.

Cloud computing’s an exciting avenue for longer-term future growth. A prolonged recession could cause smaller adopters to push spend down the road, but we think it’s hard to see cloud adoption slowing too far.

Alphabet has more than one string to its bow and all the benefits that come with scale. However, there are no doubt headwinds, with tech and advertisers under pressure.

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Experian

Experian uses data analytics to help individuals and businesses make financial decisions. Tools range from free credit checks for individuals to business products that help banks with identity and fraud checks. These are business-critical services that we only see increasing in value as the world continues to digitise.

The chance of global recessions into 2023 and beyond remains a reality, but there are areas where this can potentially benefit Experian. As consumers work through their savings and look to borrowing to finance their lifestyles, lenders need access to reliable data to make lending decisions.

We’re already starting to see risk appetites fall from lenders and we expect that to be the new norm throughout 2023 and beyond. That’s where Experian’s business products can help identify borrowers with suitable credit risk.

Experian trades a touch over its longer-term price-to-earnings ratio, which reflects the company’s qualities. That does mean ups and downs are more likely.

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PayPal

Despite being an architect of the transition to digital payments, PayPal still has a huge chunk of market share to push for.

Checkout solutions are set to see some upgrades throughout 2023. PayPal’s working alongside would be competitors, like Apple, to give users more opportunity to pay with PayPal. We should soon see tech that’ll allow iPhones themselves to become payment terminals for vendors and solutions that enable PayPal and Venmo cards to be added to the Apple Wallet.

PayPal’s range of services position it well to grow ahead of the wider digital payment market. But there is of course a wider risk that a weaker global economy reduces demand for payment services.

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Unless otherwise stated estimates are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure disclosure for more information.