The technology sector is full of companies that S&P500In fact, more than a quarter of the S&P 500 consists of technology companies. The preference for technology stocks is even more evident in the Nasdaq 100. Part of this distribution is due to the outsized presence of the “Magnificent Seven” stocks, a group of some of the best technology stocks because almost all of the companies have delivered impressive long-term gains.

Many of the Magnificent Seven stocks continue to innovate. They invest heavily in initiatives like artificial intelligence while strengthening their product lines. However, there are other technology companies that continue to innovate in their industries. Investing in companies that continue to tackle innovative projects can lead to long-term returns. However, some companies do this better than others.

If you’re looking for the best technology stocks that can command higher prices due to their promising pipelines, keep an eye on these three promising opportunities.

Amazon (AMZN)

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Amazon (NASDAQ:Amazon) has been innovating in many industries for decades. The company popularized free two-day shipping, Prime Day, and other trends. Shares continue to perform well, up 8% year-to-date and up 79% over the past five years. The technology giant is in the midst of a correction, which presents a buying opportunity on dips.

The e-commerce giant reported 10% year-over-year revenue growth in the second quarter, slightly lower than expected, and analysts didn’t like its third-quarter forecast. Every long-term stock goes through ups and downs, especially innovative companies, which tend to have high valuations.

Amazon is the market leader in the cloud computing industry and is likely to benefit from the AI ​​boom. The technology company is also investing heavily in artificial intelligence to expand its market share in several industries. One bright spot was Amazon Web Services, which grew by 19% year-on-year.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) is the second-largest cloud provider, and cloud computing accounts for more than half of the company’s total revenue. The tech giant reported 15% year-over-year revenue growth and 10% year-over-year net income growth in the fourth quarter of fiscal 2024. These results were largely boosted by Microsoft Cloud revenue growth of 21% year-over-year. Cloud revenue accounted for $36.8 billion of the company’s $64.7 billion revenue in the fourth quarter of fiscal 2024.

AI investments have helped Microsoft expand its market share across multiple industries. Technology also provides Microsoft with numerous opportunities to innovate. Copilot was the catalyst for Microsoft’s AI expansion, and investors got a glimpse of the company’s capabilities with Copilot for Security. This generative AI-powered assistant helps cybersecurity professionals protect data and simplifies mundane, repetitive tasks.

Microsoft is a reliable long-term winner in the stock market. Shares are up 8% year-to-date and have gained 190% over the past five years. The stock is in the midst of a correction, which offers investors a greater margin of safety.

SoFi (SOFI)

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SoFi (NASDAQ:SOFI) is a digital bank that continues to see a significant increase in membership. The fintech company has gained members due to its competitive financial products. Because SoFi has no physical branches, the bank has fewer overhead costs and passes the savings on to consumers.

SoFi’s stock gains have not been outstanding or noteworthy for several years. To sum up the 5-year returns succinctly, it’s an underdog story. However, some underdogs grow big over time and the financials support the bullish thesis. Revenue grew 20% year over year in the first quarter, while net income was $17.4 million. SoFi reported a net loss of $47.5 million in the same quarter last year.

Rising profit margins with continued revenue growth suggest that there is an opportunity for the innovative fintech company. Analysts are divided and have rated the stock as a “hold”. The average price target implies an increase of 27% from current levels.

At the time of publication, Marc Guberti held long positions in AMZN, MSFT and SOFI. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing guidelines.

At the publication date, the responsible editor held a LONG position in SOFI.