Underdog tech stocks for 2024: 3 hidden gems in a crowded market

Tech stocks look promising in 2024. The sector is known for its high growth potential, and lower interest rates expected later this year could improve the implied valuations of many companies. However, not all tech stocks are created equal. Some have more upside potential than others.

Investors can often find great opportunities where others are afraid or unwilling to look. They exist far away from the big names on Wall Street and quietly deliver strong results to the market quarter after quarter.

That’s why we’ve put together a list of three undervalued tech stocks that investors should buy and hold for the long term. These options offer a good mix of risk and reward, and the prospects look attractive.

Here are three tech stocks investors should consider.

Data Storage Corporation (DTST)

cloud computing stocks

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Data Storage Co., Ltd. (NASDAQ:DTST) specializes in cloud storage and cloud computing. The company is an undervalued name on Wall Street, but its latest quarterly report may have caught some people’s attention.

In other words, revenue for the fiscal year ending September 2023 increased by 35%. It also has strong momentum in winning new business and expanding relationships with existing customers, while also reporting positive bottom line profitability of EPS 0.02.

These results are encouraging, especially considering that tech stocks like DTST are focused on growing sales rather than breaking even. DTST may have a lower risk profile than other companies that consistently report losses on a quarterly basis. In fact, the company reported positive EPS in each quarter of his fiscal year 2023.

DTST is also diversifying its revenue and revenue streams in both software and hardware, resulting in year-over-year revenue growth in Q3 2023. The company plans to expand its services internationally and expand its distribution channels. These results make DTST one of the best tech stocks to buy.

Quantum Computing (QUBT)

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quantum computing (NASDAQ:Kubut) is a pure quantum computing stock that investors should consider for concentrated exposure to this industry.

QUBT stock is a contrarian stock I chose for this list. This is because the company fell short of analysts’ expectations for both sales and EPS numbers. That means his EPS for the last quarter was -0.11, which was 75% lower than expected, and his revenue was 10%.

However, quantum computing is widely considered to be a strong growth driver for the company, and these short-term failures (which were not due to the company’s structural problems) are likely to be a long-term threat to owning the company. I feel it doesn’t detract from the theme. future.

In fact, with the stock down more than 39% over the past year, these weaknesses could actually be a valuable entry point for long-term investors. Analysts expect QUBT’s revenue to grow 161% annually, far below the industry’s expected growth rate of just 12%.

Additionally, the company only has 75 million shares outstanding, meaning investors who want to snap up QUBT stock while it’s still cheap have a lot to gain.

One-stop system (OSS)

computer chip.Chip stocks you can buy now

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One stop system (NASDAQ:OSS) specializes in high-performance computing (HPC) systems. That means manufacturing components such as graphics processing units and solid state drives. I predict that stocks like OSS, which fuel the growth of emerging technologies like AI, will skyrocket in value due to high market demand and short supply. This stock is no exception.

OSS also has a momentum-based nature. That said, it beat EPS and revenue estimates last quarter, but this could be part of a broader turnaround in the company’s finances, as its stock price has fallen more than 30% in the last year.

OSS is in a bullish position because it is a penny stock that is in an explosive industry and trades at a very cheap valuation. The company’s enterprise value to sales multiple of just 0.5x and market capitalization of $43.8 million are also attractive factors.

Adding a small position in OSS to its hardware position in the AI ​​industry makes it one of the best tech stocks to buy, with the potential for big gains in the future.

About penny stocks and small stocks: With rare exceptions, InvestorPlace does not publish commentary about companies with a market capitalization of less than $100 million or with fewer than 100,000 shares traded daily. That’s because these “penny stocks” often become a playground for scammers and market manipulators. When publishing commentary about small-capitalization stocks that may be affected by our commentary, we require InvestorPlace.com writers to disclose this fact and alert readers to the risks.

read more: Penny stocks — how to profit without getting scammed

On the date of publication, Matthew Farley did not have (directly or indirectly) any positions in the securities mentioned in this article. Opinions expressed are those of the author and are subject to InvestorPlace.com Publishing Guidelines.

Matthew started writing about financial markets during the crypto boom in 2017 and was a team member of several fintech startups. He then began writing about Australian and US equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and New Scientist magazines, among others.

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