Growth-oriented technology stocks have sold off in 2021. We think shares of two wide-moat companies look increasingly attractive.

First is Amazon, which we think is worth US$4,000 per share. Amazon dominates in both e-commerce and public cloud services. Size and scale create selection and low prices, which draw in shoppers, which then draw in more vendors as third-party sellers in a virtuous circle. Amazon Prime offers benefits that make shopping on Amazon properties even more compelling for consumers, while providing recurring cash flow. These factors have combined to create the only demand aggregator of substance in the United States. Given its Internet presence and the obvious fact that Amazon knows so much about its shoppers, the company's advertising business has grown rapidly. From a retail perspective, we expect continued innovation to help drive further share gains. We also look for continued penetration into categories such as groceries, pharmacy, and luxury goods that have not previously translated into the same level of success as other retail categories. We also see technology advancements in AWS and a bigger push to service enterprise customers. Overall, we see strong revenue and free cash flow growth for years to come.

Our second pick is ServiceNow, which we think is worth US$573 per share. We think the company benefited from strong demand throughout COVID-19, as service- and automation-related solutions became imperatives for companies trying to do business in a new remote reality. We think these trends will persist over the next couple of years as companies accelerate their digital transformation efforts. ServiceNow excels at executing the land-and-expand strategy, and it continues to leverage its strength in workflow automation to penetrate existing customers more deeply in IT and more broadly with HR and customer-service-specific products. Along with just a handful of other companies, we think ServiceNow is rapidly becoming a key partner in digital transformation as shown in retention statistics, which remain at the elite level. Importantly, we are impressed with ServiceNow's excellent balance between strong and highly visible revenue growth and robust and expanding margins.

Analyst Dan Romanoff provided the research behind this segment.