A long-time investor shares his 3 picks for tech stocks to bet on in these tough times for the market

The fact that Microsoft now has a higher market value than either Apple or Amazon, both of which were worth more than $1 trillion a few months ago, says a lot about the shifting fortunes in the tech industry away from consumer companies and toward cloud-based ones, Morgan said.

While all three companies are now trading well below that magical number, Microsoft "seems to be the one best capable of getting [back] to $1 trillion, at least in near future," he said.

That's because under CEO Satya Nadella, Microsoft has made a remarkable transition, going from a traditional software company to a cloud-focused one, Morgan said. Its Azure offering is the number-2 player in the infrastructure as a service (IaaS) portion of the cloud market behind Amazon Web Services. And it's the leader in the platform as a service market (PaaS).

Microsoft provides a nice contrast to Oracle, Morgan said. Both companies thrived in the old enterprise software industry, selling companies licenses to run applications in their data centers. But while Microsoft has since established itself as one of the biggest players in the cloud market, Oracle is still trying to get traction for its cloud services, he said.

"To me, they're bipolar opposites of each other," he said. He continued: "It seems to me that Microsoft has beaten them to the mark in terms of making this maneuver to the cloud."

Like Salesforce, Workday, the leader in cloud-based human resources applications, is benefitting as enterprise corporations shift their applications away from those that they run in their own data centers, Morgan said. The company counts more than a third of the Fortune 500 corporations among its customers, and has about a 9% share of the cloud human capital management (HCM) market, he said.

Workday is seeing booming business. In its most recent quarter, its sales were up 34% on a year-over-year basis, blowing through Wall Street's expectations.

In addition to the ongoing move to the cloud, Workday is benefitting from competing in an area with no real leader, Morgan said. In the traditional HCM software market, SAP, Oracle, and ADP have all battled for share. Workday is gaining ground by offering a simpler user experience, he said.

"As late adopters to the cloud shun their on-premise applications, we believe Workday will gain even more market share," he said.

Amazon's cloud arm — Amazon Web Services — dominates the infrastructure part of the market and is the no. 2 player to Microsoft in the platform part, Morgan said. AWS is hugely profitable, providing more than half of the entire company's operating income despite accounting for only 20% of its revenue, he said. And that should continue; AWS is likely to provide more than half of Amazon's profits next year.

The problem for Morgan is that AWS is tied to Amazon's core retail business, which has low profit margins and is a "tough" business. If Amazon were ever to separate out AWS as a standalone company, Morgan would dump all of his stock in Amazon and invest the proceeds in the cloud business.

"AWS is still the 'crown jewel' for [Amazon] investors," he said.