The technology sector continues to be one of the most compelling investment opportunities in today’s market. Over the past 15 years, tech stocks have consistently outperformed broader market indices, with the tech-heavy Nasdaq Composite generating an impressive compound annual growth rate (CAGR) of nearly 16% since 2010. This performance significantly exceeds the S&P 500’s 12% CAGR and the Dow Jones Industrial Average’s 10% CAGR over the same period.

For investors seeking exposure to the technology sector’s continued growth potential, here are two standout stocks that could deliver substantial returns in the years ahead.

1. Tempus AI: At the Intersection of Healthcare and Artificial Intelligence

Company Overview

Tempus AI (NASDAQ: TEM) represents an exciting opportunity in the rapidly expanding healthcare technology space. Founded in 2015, this relatively young company operates at the fascinating crossroads of artificial intelligence and genomics – two of the most transformative technologies of our time.

With a market capitalization of $15 billion, Tempus AI has been publicly traded for just over a year, making it a fresh addition to the investment landscape. The company specializes in advanced healthcare solutions including sequencing, molecular genotyping, and pathology testing, primarily serving pharmaceutical companies in their drug development efforts.

Financial Performance

Tempus AI’s recent financial results demonstrate the company’s tremendous growth trajectory. In their latest quarter ending June 30, the company reported remarkable performance metrics:

• Revenue: $315 million, representing a staggering 90% year-over-year increase
• Gross Profit: $195 million with an impressive 61% gross margin
• Net Loss: $(43) million, a significant improvement from the $(552) million loss recorded one year prior

The company’s revenue streams are well-diversified, with genomics testing generating $242 million (77% of total revenue) and data and services contributing $73 million (23% of revenue), primarily through licensing agreements.

Investment Thesis

Tempus AI’s positioning at the nexus of AI and genomics creates a compelling long-term growth story. As artificial intelligence continues to advance and offer new possibilities for disease treatment and drug discovery, companies like Tempus that can effectively leverage these technologies stand to benefit significantly. The company’s next major milestone will be achieving consistent profitability while maintaining its impressive revenue growth trajectory.

2. Oracle: The Cloud Infrastructure Powerhouse Behind AI

The Surprising Comeback Story

Oracle (NYSE: ORCL) might surprise investors as a top tech stock recommendation, especially given its history during the dot-com bubble collapse over 20 years ago. However, this perception overlooks one of the most remarkable comeback stories in technology investing.

While Oracle’s stock did take approximately 15 years to recover its pre-dot-com bubble highs, the company has been absolutely on fire over the past five years. Oracle stock has generated an astounding 39% CAGR during this period, outperforming many high-profile technology giants including Amazon, Microsoft, and Alphabet – often by substantial margins.

The AI Infrastructure Play

Oracle’s resurgence stems from its strategic pivot to cloud services, specifically targeting the booming artificial intelligence sector. The company recognized early that organizations seeking to dominate the AI landscape would require massive cloud infrastructure to train and operate their sophisticated models. Oracle positioned itself perfectly to supply the essential data centers needed to meet this surging demand.

Financial Renaissance

This strategic focus has translated into impressive financial results. Oracle’s revenue has grown approximately 46% over the past five years, jumping from $39 billion to $59 billion. This growth is particularly significant given the company’s previous struggles with stagnant revenue between 2011 and 2021, when annual revenue remained stuck between $35 billion and $40 billion before breaking out substantially in 2022.

Future Outlook

Given the explosive growth and continued demand for AI applications across industries, Oracle’s cloud infrastructure strategy appears well-positioned for sustained success. The company offers investors a unique way to gain exposure to the AI revolution through the essential backend infrastructure that powers these transformative technologies.

Investment Considerations

Both Tempus AI and Oracle represent compelling opportunities in different segments of the technology sector. Tempus AI offers exposure to the cutting-edge intersection of healthcare and AI, with tremendous growth potential but higher risk given its relative youth and path to profitability. Oracle provides a more established option with proven financial performance and a strategic position in AI infrastructure.

The technology sector’s 15-year outperformance streak suggests continued opportunities for well-positioned companies. As artificial intelligence, genomics, and cloud computing continue to reshape industries, companies like Tempus AI and Oracle that are strategically positioned at the forefront of these trends could deliver substantial returns for long-term investors.

Investors should conduct their own research and consider their risk tolerance when evaluating these opportunities, but both stocks represent intriguing ways to participate in technology’s continued evolution and growth potential.