In this article, we discuss the 10 best cheap technology stocks to invest in. You can skip our detailed analysis of the technology sector, and go directly to read the 5 Best Cheap Technology Stocks To Invest In.
As the financial markets crashed during the pandemic in 2020, investors remained bullish on tech stocks throughout the period. According to a report published by FactSet, the S&P 500 Technology sector has reported the second-largest positive difference between actual earnings and estimated earnings in Q3 2021. The sector’s earnings growth rate has increased to 32.1% from 28.6% in this period. This growth can offer great investment opportunities to investors as the tech sector is projected to thrive in 2022 as well. Moreover, technology companies represent approximately 46% of the S&P 500’s total market capitalization, with sales growing at twice the rate of non-tech companies, as reported by Bailard, an investment management firm.
The 5G rollout in the U.S. gave way to the adoption of artificial intelligence (AI) in nearly all major tech companies to streamline their operations. Along with this, many companies are also embracing cloud migration, especially after the Covid-19 pandemic. The companies with cloud technology were able to adapt to the work from home policy more quickly and efficiently than others. According to a report published by McKinsey & Company, over 70% of the companies will be deploying hybrid-cloud or multi-cloud platforms as a part of their whole infrastructure by 2022. The use of the cloud will further enhance the speed and efficiency of operations while strengthening cybersecurity defenses.
According to Kristina Hooper, a chief global market strategist at Invesco, tech stocks are going to benefit in the future, especially from increased corporate spending. Some of the notable technology companies include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT).
However, in this article, we’ll focus on cheap tech stocks.
Photo by Adam Nowakowski on Unsplash
Our Methodology:
For this article, we picked some cheap tech stocks with long-term growth potential. We preferred the stocks that are working on disruptive products and services with an explosive growth potential in the future. We also gave importance to analyst ratings and hedge fund sentiment.
Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by wide margins. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
10 Best Cheap Technology Stocks To Invest In
10. AmpliTech Group, Inc. (NASDAQ:AMPG)
Number of Hedge Fund Holders: 5
Share Price as of November 1: $3.92
AmpliTech Group, Inc. (NASDAQ:AMPG) is an American technology company that develops custom leading-edge RF components for commercial, space, and military markets. The number of hedge funds tracked by Insider Monkey having stakes in the company grew to 5 in Q2, from 2 in the previous quarter. The total value of these stakes is $2.5 million.
In Q2 2021, AmpliTech Group, Inc. (NASDAQ:AMPG) posted a GAAP EPS of -$0.05, beating the estimates by $0.06. The company’s revenue for the quarter stood at $1.02 million, up 54.5% from the prior-year quarter.
This July, Maxim initiated its coverage on AmpliTech Group, Inc. (NASDAQ:AMPG) with a Buy rating and a $10 price target, highlighting the company’s position in various growth markets, such as cybersecurity, satellite communication, and 5G.
Unlike expensive stocks like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), AmpliTech Group, Inc. (NASDAQ:AMPG) is a cheap tech stock with a strong upside potential.
9. Future FinTech Group Inc. (NASDAQ:FTFT)
Number of Hedge Fund Holders: 6
Share Price as of November 1: $2.12
Future FinTech Group Inc. (NASDAQ:FTFT) suffered a lot in the face of the pandemic in 2020, however, the stock bounced back in 2021, gaining 10%.
Future FinTech Group Inc. (NASDAQ:FTFT) is a Chinese technology company that is mainly involved in blockchain technology. The company has recently announced its plans to build a cryptocurrency mining farm in Paraguay to enhance its operations.
At the end of Q2, 6 hedge funds tracked by Insider Monkey reported owning stakes in Future FinTech Group Inc. (NASDAQ:FTFT), up from 2 in the previous quarter. The total value of these stakes is $900,000.
8. Exela Technologies, Inc. (NASDAQ:XELA)
Number of Hedge Fund Holders: 7
Share Price as of November 1: $2.06
Exela Technologies, Inc. (NASDAQ:XELA), a global business process automation (BPA) company, surged 23% on October 28 after the company offered its cloud-based global platform to CareSource, a healthcare company.
As of Q2, 7 hedge funds tracked by Insider Monkey have stakes in Exela Technologies, Inc. (NASDAQ:XELA), compared with 8 in the previous quarter. The total worth of these stakes is $7.5 million. Luminus Management is the company’s leading shareholder in Q2, with shares worth $3.1 million.
In Q2 2021, Exela Technologies, Inc. (NASDAQ:XELA) posted a GAAP EPS of -$0.33, beating the estimates by $0.12. This August, B. Riley initiated its coverage on Exela Technologies, Inc. (NASDAQ:XELA) with a Buy rating and a $4 price target, appreciating the company’s digital transformation and outsourcing.
Tech stocks like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT) and Exela Technologies, Inc. (NASDAQ:XELA) are gaining ground as investors gain confidence in the post-pandemic economy.
7. Pixelworks, Inc. (NASDAQ:PXLW)
Number of Hedge Fund Holders: 10
Share Price as of November 1: $4.33
Needham sees an potential upside in Pixelworks, Inc. (NASDAQ:PXLW) as the company started developing co-processor chips. Recently, the firm initiated its coverage on Pixelworks, Inc. (NASDAQ:PXLW) with a Buy rating and a $7 price target.
Since the beginning of the year, Pixelworks, Inc. (NASDAQ:PXLW) delivered a 89% return to shareholders.
In Q2, Pixelworks, Inc. (NASDAQ:PXLW) posted an EPS of -$0.05, beating the estimates by $0.02. The company’s revenue also presented a 51% year-over-year growth at $14.05 million.
Pixelworks, Inc. (NASDAQ:PXLW) is an American tech company that provides video and pixel processing semiconductors and software. At the end of June, 10 hedge funds tracked by Insider Monkey were bullish on the company, valued at over $9 million. In the previous quarter, 8 hedge funds had stakes in Pixelworks, Inc. (NASDAQ:PXLW), highlighting a positive hedge fund sentiment.
6. trivago N.V. (NASDAQ:TRVG)
Number of Hedge Fund Holders: 10
Share Price as of November 1: $2.64
trivago N.V. (NASDAQ:TRVG) is a Dutch technology company that specializes in internet-related services in the hotel and lodging markets. At the end of Q2, 10 hedge funds tracked by Insider Monkey had stakes in trivago N.V. (NASDAQ:TRVG), the same as in the previous quarter. The total value of these stakes is $67.7 million.
This June, Mizuho raised its price target on trivago N.V. (NASDAQ:TRVG) to $4, while keeping a Buy rating on the shares. The company announced its Q3 results on November 1, reporting revenue of £138.6 million, beating the estimates by £2.3 million. In the past year, trivago N.V. (NASDAQ:TRVG) gained 109.4%. PAR Capital Management is the company’s leading shareholder, owning 19.3 million shares.
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Disclosure. None. 10 Best Cheap Technology Stocks To Invest In is originally published on Insider Monkey.
