Tech Stocks to Buy Now: Amazon and Microsoft, Avoid Tesla

Tech stocks have been the go-to for many investors due to their impressive performance and growth potential. Over the past decade, the S&P 500's tech sector has seen a significant increase of 771% (as of August 21), outperforming every other sector.

The author recommends loading up on Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) due to their diversified businesses. Both companies have thriving core businesses, with Amazon's e-commerce business and Microsoft's Office software being significant contributors to their growth.

Cloud computing is a key driver of growth for both companies, with AWS and Azure being the world's two largest cloud platforms, holding market shares of 28% and 21%, respectively. Although e-commerce accounted for 79% of Amazon's $200.6 billion in revenue in the second quarter, AWS generated 61% of its operating income.

Tesla (NASDAQ: TSLA) is a company to avoid due to its high valuation relative to its execution timeline for long-shot projects like robotaxis and humanoid robots. The stock is trading at over 205 times its projected earnings for the next 12 months, making it hard to justify.