In this article, we will discuss the 10 Worst Affordable Tech Stocks to Buy According to Short Sellers.
The rapid advancements in Al, computing, and human-machine interaction are the critical drivers for global companies’ strong adoption of technology. Garner believes that agentic Al is expected to emerge over the next 2-3 years – with capabilities going beyond tasks such as summarizing information to taking action. While Al is being used to provide options to the users, this technology will be able to choose the option that is optimal for the user. Therefore, the most important use cases for Al in 2025 will involve the relationships between humans and machines.
The technology domain involves substantial innovation, ranging from groundbreaking Al and Machine Learning advancements to the transformative potential of blockchain and loT. Industry veterans believe that next year should be a transitional one for the generative Al as technology companies will focus on experimenting and finding applications that can help drive efficiency and productivity.
Global Growth with the Help of Cloud, Al, and Cybersecurity
The elevated interest rate environment, concerns regarding recession, and geopolitical challenges led to the slight weakening of global technology spending in 2023. Now, experts are seeing a light on the horizon.
Economists have become more optimistic about the US economy, for the tech sector specifically. Due to strong adoption trends of Cloud and Al, global analysts are now optimistic about a potential return to modest growth in 2024, with stronger prospects for 2025.
Deloitte believes that global IT investments should be aided by double-digit growth in spending for software and IT services in 2024. There are expectations that public cloud spending might see an increase of more than 20%, with stronger demand for cybersecurity. Al investment (not specifically about generative Al) should also contribute to overall spending growth. Economists continue to project that Al-related investments might touch $200 billion globally by 2025, led by the US.
Market experts believe that cybersecurity should play an important role in the comeback. Deloitte recently highlighted that analysts continue to project low double-digit growth in global spending on security and risk management from 2023 to 2024. Adoption should be fueled by the persistent threat landscape, ongoing cloud adoption, the emergence of generative Al, and data privacy and governance regulations.
On the software front, Deloitte projected that nearly all the enterprise software companies will be embedding generative Al in at least some of their products in 2024 and that the revenue uplift (for such companies and cloud providers of gen-Al processing capacity) should approach a US$10 billion run rate by the year-end. On the hardware front, Deloitte believes that the uplift for chips and servers executing generative Al should exceed US$50 billion in 2024.
Technology Trends Defining the Future
The major technology trends are expected to create opportunities, result in innovation, and become imperative to gain a competitive edge in the business world. While AI and ML continue to top the list of tech trends likely to dominate the future, experts believe that Robotic Process Automation (RPA), Blockchain Technology, Industry Cloud Platforms, and Machine Customers are also on the list.
RPA helps organizations to transition to dynamic norms of automating organizational repetitive tasks with effectiveness and high precision. It revolves around employing software robots that perform tasks, like entering data and other related tasks, exactly like humans. Infosys believes that the global RPA market should touch ~$13.74 billion by 2028, reflecting a CAGR of 32.8%. With leading companies reaching the end of the learning curve, the full benefits of RPA are becoming visible. The exponential requirements for automation, a target of increased productivity, and lower operational costs should act as growth drivers.
Next, machine customers refer to AI systems that are empowered to make purchase decisions and have autonomous communication with a business. The technology leverages the options, data, and algorithms to think and transact. As per Gartner, CEOs expect that ~15% – 20% of their revenue should come from machine customers by 2030. The potential to convert billions of machines into customers offers opportunities worth trillions.
Source: Pixabay
Our methodology
To list the 10 Worst Affordable Tech Stocks to Buy According to Short Sellers, we used a Finviz screener to filter out the stocks in the technology industry and we chose the ones having high short interest. Next, we narrowed our list and chose the stocks that are trading at less than the forward earnings multiple of ~22.53x (since the broader market is trading at ~22.53x, according to WSJ). Finally, these stocks were ranked in ascending order of their short interest.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Worst Affordable Tech Stocks to Buy According to Short Sellers
10) QuickLogic Corporation (NASDAQ:QUIK)
Short % of Float (As of 30 August 2024): 11.23%
Forward P/E as of 23 September 2024: 15.46x
QuickLogic Corporation (NASDAQ:QUIK) is a fabless semiconductor company in the US. It provides embedded FPGA intellectual property, low power, multicore semiconductor system-on-chips, discrete FPGAs, and AI software. The company is also engaged in providing end-to-end AI/ML solutions with accurate sensor algorithms using AI technology.
Bears believe that the stock price of QuickLogic Corporation (NASDAQ:QUIK) might come under pressure in the upcoming quarters as a result of the downturn in the broader technology sector, which continues to face challenges related to supply chain and fluctuating demand. Moreover, the company’s stock faced difficulties in the rapidly evolving industry landscape. QuickLogic Corporation (NASDAQ:QUIK)’s growth prospects might be impacted due to scheduling delays. In 2Q 2024, the company saw revenue pushouts as a result of funding delays from customers in the aerospace, defense, and industrial sectors.
On the other hand, market experts opine that QuickLogic Corporation (NASDAQ:QUIK) should be aided by expansion in its product lines and partnerships, targeting a range of sectors such as defense, industrial, and consumer electronics. QuickLogic Corporation (NASDAQ:QUIK) has been expanding its FPGA Chiplet product line and announced significant distribution agreements. The company continues to expect growth acceleration and profitability in late 2025, mainly from the storefront and chiplet opportunities.
Wall Street analysts expect that the Australis eFPGA IP Generator should enhance the company’s ability to quickly create customer-specific Hard IP. QuickLogic Corporation (NASDAQ:QUIK) expects operating expenses (OpEx) to remain flat throughout the year, hinting at controlled spending.
As per Wall Street analysts, the shares of QuickLogic Corporation (NASDAQ:QUIK) have an average price target of $12.50. Notably, 4 hedge funds held stakes in the company at the end of 2Q 2024, as per Insider Monkey’s database.
9) Lyft, Inc. (NASDAQ:LYFT)
Short % of Float (As of 30 August 2024): 13.71%
Forward P/E as of 23 September 2024: 17.18x
Lyft, Inc. (NASDAQ:LYFT) offers online ridesharing services. The company provides ride booking, payment processing, and car transportation services.
The short sellers believe that Lyft, Inc. (NASDAQ:LYFT)’s stock might decline in the remainder of 2024 as there are concerns related to the slowdown in the bookings growth. Lyft, Inc. (NASDAQ:LYFT) anticipates an increase in rider incentives, which might lead to a potential margin compression. Moreover, a competitive landscape and varying market conditions might also weigh over the broader business performance. The macroeconomic concerns about the consumer and interest in autonomous vehicles might act as headwinds for the company’s performance. The company’s nascent venture, Lyft Media, is exposed to significant risks as the company might struggle to establish a foothold and attract sustained advertiser interest.
On the other hand, Wall Street believes that Lyft, Inc. (NASDAQ:LYFT)’s growth should be supported by both ride frequency and ride conversion. The analysts are optimistic regarding the commercialization and monetization of autonomous vehicle technology. Lyft, Inc. (NASDAQ:LYFT) is expected to see enhanced user experience and driver supply as a result of new features such as price lock and improved driver incentives. The company expects positive FCF for FY 2024, with over 90% of adjusted EBITDA anticipated to convert to free cash flow for 2024.
The company’s partnership strategy, which includes a media partnership with Disney, should continue to aid its growth. Its large platform and experience with AV integration have positioned the company well for the future AV market.
Piper Sandler reiterated an “Overweight” rating on the shares of Lyft, Inc. (NASDAQ:LYFT), setting the price objective of $24.00 on 7th June. Lyft, Inc. (NASDAQ:LYFT) was part of 53 hedge funds’ portfolios in the second quarter.
8) Veeco Instruments Inc. (NASDAQ:VECO)
Short % of Float (As of 30 August 2024): 14.53%
Forward P/E as of 23 September 2024: 14.93x
Veeco Instruments Inc. (NASDAQ:VECO) is engaged in developing, manufacturing, selling, and supporting semiconductor and thin film process equipment mainly to make electronic devices in the United States and other countries. The company has developed revolutionary technology products to enable thermal annealing solutions at the most advanced technology nodes.
Bears believe that Veeco Instruments Inc. (NASDAQ:VECO) is exposed to several challenges related to managing costs and maintaining profitability amidst fluctuations in market demand. During 2Q 2024 earnings, the company highlighted that there has been a decrease in customer deposits, mainly in the data storage sector. Also, the utilization rates in the data storage industry continue to be historically low, reducing service run rate business.
Moreover, short sellers highlighted that selectivity has been increasing in the original equipment manufacturers (OEMs) and components space and the sector appears to be in the later stages of its 2nd phase. Bears are cautious about the company’s market penetration potential with ion beam deposition (IBD) technology.
On the other hand, market experts believe that Veeco Instruments Inc. (NASDAQ: VECO) should be aided by strength in its semiconductor business. The company continues to make investments in laser annealing, ion beam deposition, and compound semiconductors, with 3Q 2024 revenue expected to be $170 million to $190 million. Moreover, Wall Street believes that there are growing opportunities in laser and nano anneal technologies, and Veeco Instruments Inc. (NASDAQ:VECO) appears to be well-placed to capture those.
Wall Street remains optimistic about the company’s expanding serviceable available market (SAM) and its gains in laser annealing and nanosecond annealing. They believe that such areas should benefit from industry trends like gate-all-around (GAA) transition, backside power, and high bandwidth memory (HBM).
Oppenheimer increased their target price on shares of Veeco Instruments Inc. (NASDAQ:VECO) from $45.00 to $55.00, giving an “Outperform” rating on 27th June.
Wasatch Global Investors, an asset management company, released its second-quarter 2024 investor letter. Here is what the fund said:
“Veeco Instruments Inc. (NASDAQ:VECO) was the top contributor to strategy performance during the second quarter. The company is a global capital-equipment supplier that designs and builds processing systems used to manufacture high-tech microelectronic devices including semiconductors, photonics, display technologies and power supplies. These devices are integral to applications like advanced computing, machine learning and AI. Veeco has exhibited solid fundamentals and a reasonable valuation for a few years. Going forward, we think the bipartisan CHIPS and Science Act will create an additional tailwind for Veeco, which is one of relatively few U.S. micro-cap companies involved in semiconductor manufacturing and AI.”
7) SMART Global Holdings, Inc. (NASDAQ:SGH)
Short % of Float (As of 30 August 2024): 15.95%
Forward P/E as of 23 September 2024: 9.67x
SMART Global Holdings, Inc. (NASDAQ:SGH) is a memory-focused company, which is engaged in the designing and development of enterprise solutions in the US and internationally.
Short sellers believe that SMART Global Holdings, Inc. (NASDAQ:SGH)’s strategic pivot towards AI solutions comes with numerous risks, which might weigh over the performance in the near term. They believe that higher R&D investments, needed to compete effectively in the AI space, might impact its profitability. Moreover, the supply chain constraints and extended lead times for components are some of the additional challenges that might weigh over SMART Global Holdings, Inc. (NASDAQ:SGH)’s gross margins.
That being said, Wall Street analysts believe that SMART Global Holdings, Inc. (NASDAQ:SGH) should be aided by its conservative strategy and efforts to strengthen its Services business. SMART Global Holdings, Inc. (NASDAQ:SGH) continues to focus on the growth of its AI infrastructure, with high-density memory solutions targeted at AI workloads in development. Its transition from a memory module organization to a company that is focused on AI infrastructure and high-performance computing should aid in long-term client relationships and service expansion.
Market experts opine that the company is a leader in HPC implementation for AI, a market that has strong market opportunities. There are expectations that the company’s efforts to enhance its go-to-market strategy might gain some traction.
In 3Q 2024, SMART Global Holdings, Inc. (NASDAQ:SGH)’s gross margin increased to 29.6% as compared to 29.2% in the same period in 2023 mainly because of a favorable mix from higher service revenue in the IPS business. For 4Q 2024, the company expects net sales of ~$325 million (+/- $25 million) and a gross margin of ~29.5% (+/- 1.5%).
Rosenblatt Securities reissued a “Buy” rating on the shares of SMART Global Holdings, Inc. (NASDAQ:SGH), setting a price target of $35.00 on 3rd July. In 2Q 2024, 27 hedge funds had investments in the company. Meridian Funds, managed by ArrowMark Partners, released its first quarter 2024 investor letter. Here is what the fund said:
“SMART Global Holdings, Inc. (NASDAQ:SGH) is a diversified technology company with leading market positions in memory, LEDs, high-performance computing (HPC), and the Internet of Things (IoT). Our interest was piqued when the company hit a rough patch in 2019-early 2020 as several factors led to an earnings decline. Volatility in its memory business caused by weakness in Brazil, new product investments the company had made ahead of revenue, and order delays in its HPC business all converged. While none of these developments are particularly unusual, it is uncommon for all three to turn negative at the same time. Our thesis was that the company’s impressive new management team could not only smooth out some of the volatility in the business but also drive growth through superior capital allocation and organic investment. With the stock trading at less than 8x earnings at the time of our investment (Q3 2020), we believed the risk/reward was excellent. The stock was strong in the quarter due to positive earnings results and guidance. The memory business appears to be in a cyclical upturn within a strong long-term secular growth trend driven by increased memory content in everything from phones to data center equipment to cars. Smart Global remains a leader in HPC implementation for AI, a market that remains strong, and there is anticipation that the company’s efforts to enhance its go-to-market strategy should gain traction. We believe the long-term risk/reward is still strong and maintain a large position in the stock, though we reduced our position during the quarter as part of our regular risk management process.”
6) Progress Software Corporation (NASDAQ:PRGS)
Short % of Float (As of 30 August 2024): 16.73%
Forward P/E as of 23 September 2024: 11.53x
Progress Software Corporation (NASDAQ:PRGS) offers cloud-based security solutions to large- and mid-sized organizations in a wide range of industries.
Short sellers believe that the company’s performance is expected to be impacted by the challenges related to the IT spending environment. Moreover, this environment is not likely to show changes in the near term. In addition, the short sellers believe that investors are concerned about Progress Software Corporation (NASDAQ:PRGS)’s recent decision to suspend its quarterly dividend as of the closing of the ShareFile acquisition. The short sellers highlighted that Progress Software Corporation (NASDAQ:PRGS) saw a decline of 2% YoY in its revenue and non-GAAP revenue to $175 million, with lower revenue from software licenses.
However, Wall Street analysts believe that Progress Software Corporation (NASDAQ:PRGS) should continue to be aided by its focus on artificial intelligence (AI) integration, strategic M&A, and the healthy performance of its MOVEit product. While AI integration throughout various functions demonstrated efficiency improvements, market experts anticipate strong demand for its essential products. Moreover, the successful integration of MarkLogic acquisition has expanded the company’s AI opportunities.
Coming to the outlook, Progress Software Corporation (NASDAQ:PRGS) continues to seek acquisition opportunities and might increase its pace of deals as a result of market conditions. With a strategic eye on M&A growth, along with an innovative approach to pricing AI products, Progress Software Corporation (NASDAQ:PRGS) appears to be well-placed to capture opportunities in the burgeoning market.
Guggenheim reaffirmed a “Buy” rating on the shares of Progress Software Corporation (NASDAQ:PRGS), setting a price target of $64.00 on 25th June. As per Insider Monkey’s 2Q 2024 data, 27 hedge funds reported owning stakes in the company.
5) Lumentum Holdings Inc. (NASDAQ:LITE)
Short % of Float (As of 30 August 2024): 17.87%
Forward P/E as of 23 September 2024: 17.85x
Lumentum Holdings Inc. (NASDAQ:LITE) is engaged in manufacturing and selling optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa.
Short sellers opine that customer demand is expected to remain weak, which might impact its overall financial performance. Since Lumentum Holdings Inc. (NASDAQ:LITE)’s costs are highly fixed, mainly because of manufacturing capabilities, the decline in revenue might impact its EBITDA margins. The short sellers have also highlighted the tough environment in the optical components industry. The challenges in the cloud and networking segment and the industrial tech segment (because of weak end market demand), might weigh over its performance. Moreover, the tech business of Lumentum Holdings Inc. (NASDAQ:LITE) might be pressured because of customer inventory adjustments.
On the other hand, Wall Street analysts believe that Lumentum Holdings Inc. (NASDAQ:LITE)’s business is expected to be aided by investments in new cloud and Al opportunities, which should significantly elevate its cloud business. Moreover, Lumentum Holdings Inc. (NASDAQ:LITE) continues to see a substantial rise in orders for Datacom chips and it is actively expanding its customer base in the data center market. Collectively, these factors are expected to mitigate the short-term challenges.
Lumentum Holdings Inc. (NASDAQ:LITE) has been focusing on scaling up its production capacity. It continues to focus on new technologies such as optical switching and high-density optical links. Moreover, market experts expect significant growth in 2026 and 2027, mainly in cloud business.
Analysts at Rosenblatt Securities upped their price objective on the shares of Lumentum Holdings Inc. (NASDAQ LITE) from $65.00 to $69.00, giving a “Buy” rating on 15th August. Insider Monkey’s 2Q 2024 revealed that the company was in the portfolios of 32 hedge funds.
4) TTEC Holdings, Inc. (NASDAQ:TTEC)
Short % of Float (As of 30 August 2024): 18.57%
Forward P/E as of 23 September 2024: 3.10x
TTEC Holdings, Inc. (NASDAQ:TTEC) operates as a customer experience (CX) company, designing, building, and operating technology-enabled customer experiences throughout digital and live interaction channels.
The company’s performance might witness negative impacts due to the shifting market dynamics and investor sentiment. TTEC Holdings, Inc. (NASDAQ:TTEC) has been facing challenges in regaining its footing in a competitive and rapidly evolving market landscape. There are numerous headwinds for the company’s Engage business, such as reduced forecast volumes from healthcare clients, delayed initiatives, along with the strategic decision to exit non-aligned programs. Notably, the current economic climate is challenging, and clients are hesitant to commit to long-term service contracts. In 2Q 2024, TTEC Holdings, Inc. (NASDAQ:TTEC) highlighted that the clients continue to face softer demand and budget constraints, impacting the top line in the Engage business.
On the other hand, Wall Street seems to be quite optimistic about TTEC Holdings, Inc. (NASDAQ:TTEC)’s stock. They believe that the company’s Digital business should continue to show resilience, with new enterprise client wins and growth in recurring managed services. The company’s diversification strategy and cost optimization measures should deliver significant savings. TTEC Holdings, Inc. (NASDAQ:TTEC) is expanding its offshore footprint, mainly in South Africa, in 2025.
TTEC Digital has been attracting new clients and is expanding its partner ecosystem, with more than 100 AI technology implementations underway. Moreover, TTEC Holdings, Inc. (NASDAQ:TTEC) continues to win competitive bids and leverage offshore expansion to protect contract profitability. The company’s emphasis on expanding its digital offerings, diversifying its client base, and optimizing costs reflects the adaptive approach, which should help it achieve long-term growth.
As per Wall Street, the shares of TTEC Holdings, Inc. (NASDAQ:TTEC) have an average price target of $4.75. According to Insider Monkey’s database, 19 hedge funds held stakes in the company in the second quarter.
3) Xerox Holdings Corporation (NASDAQ:XRX)
Short % of Float (As of 30 August 2024): 20.11%
Forward P/E as of 23 September 2024: 5.81x
Xerox Holdings Corporation (NASDAQ:XRX) operates as a holding company. The company, through its subsidiaries, offers printers, scanners, supplies, and accessories.
Bears believe that Xerox Holdings Corporation (NASDAQ:XRX)’s stock price is expected to remain under pressure considering the challenges related to the traditional printing business and the impact of digital transformation trends that continue to reshape industry demands. Moreover, they believe that the major restructuring efforts at Xerox Holdings Corporation (NASDAQ:XRX) might continue to act as a critical headwind. The company’s strategy of continued restructuring, and a pivot to a competitive and operationally expensive Services market, might impact its margins moving forward.
In 2Q 2024, the company saw revenues of $1.58 billion, reflecting a decline of 10%, or 9.6% in constant currency. Xerox Holdings Corporation (NASDAQ:XRX) highlighted that comprehensive and strategic operating model changes, which were implemented in 1Q 2024, led to a short period of disruption.
That being said, Wall Street remains optimistic about the reinvention strategy of Xerox Holdings Corporation (NASDAQ:XRX), which targets to improve adjusted operating income by $300 million by 2026 end. The company believes that equipment orders and new product launches are expected to drive stronger revenue growth in 2H 2024. Notably, Xerox Holdings Corporation (NASDAQ:XRX) continues to focus on expanding its offerings in the A4 and A3 categories, along with venturing into new segments in the production market.
Therefore, given its focus on digital transformation, cost savings initiatives, and market expansion, experts believe that the company should be able to meet its financial targets. Xerox Holdings Corporation (NASDAQ:XRX) aims to transform with double-digit operating margins and more than 20% of revenue from digital and IT services by the year 2027.
As per Wall Street analysts, the shares of Xerox Holdings Corporation (NASDAQ:XRX) have an average price target of $14.00. Notably, the company was in the portfolios of 28 hedge funds, as per Insider Monkey’s 2Q 2024 data.
2) DLocal Limited (NASDAQ:DLO)
Short % of Float (As of 30 August 2024): 20.12%
Forward P/E as of 23 September 2024: 13.95x
DLocal Limited (NASDAQ:DLO) operates a payment processing platform worldwide.
The short sellers believe that the shares of DLocal Limited (NASDAQ:DLO) are expected to be impacted by the challenges related to the potential for merchant renegotiation, required investments, and volatility in specific markets where the company operates, primarily Argentina and Nigeria. They believe that the company’s business was also impacted by the risks stemming from currency devaluation, mainly in markets such as Nigeria and Argentina. Also, DLocal Limited (NASDAQ:DLO)’s exposure to geopolitical risks might impact its stock price in the short term.
That being said, experts believe that DLocal Limited (NASDAQ:DLO)’s growth trajectory should stem from the addition of new merchants and expansion in various verticals. Wall Street estimates that despite facing currency devaluations and repricing by a major merchant, DLocal Limited (NASDAQ:DLO) was able to maintain stable net take rates. Moreover, the company’s ability to navigate complex regulatory and technological challenges in emerging markets should continue to act as a key differentiator from the competitors.
As of June 30, 2024, it had US$531.6 million in cash and cash equivalents, which includes US$186.2 million of own funds and US$345.4 million of merchants’ funds.
The long-term outlook for DLocal Limited (NASDAQ:DLO) stems from its focus on TPV growth and increasing share of wallet. Also, Wall Street is optimistic about its recent partnership with Microsoft. By offering localized and flexible payment solutions, the company plans to ensure that Microsoft’s customers in emerging markets have access to efficient payment methods.
As per Wall Street, the shares of DLocal Limited (NASDAQ:DLO) have an average price target of $10.20. Notably, 19 hedge funds, out of 912 tracked by Insider Monkey at the end of 2Q 2024, held stakes in the company.
Polen Capital, an investment management company, released its second quarter 2024 investor letter. Here is what the fund said:
“DLocal Limited (NASDAQ:DLO), a payments processing company headquartered in Uruguay saw further weakness after reporting disappointing first quarter results. While payment volumes and revenues grew 49% and 34%, respectively, in 1Q 2024, gross profit only grew 2% due to elevated processing costs. The company has also invested more in building out its scale and functionality, which further weighed on profitability. Longer term, as one of the leading emerging markets payments processing companies, we believe dLocal can continue to see attractive growth and improve profitability under a highly-regarded management team.”
1) GigaCloud Technology Inc. (NASDAQ:GCT)
Short % of Float (As of 30 August 2024): 30.51%
Forward P/E as of 23 September 2024: 4.93x
GigaCloud Technology Inc. (NASDAQ:GCT) is engaged in offering end-to-end B2B e-commerce solutions for large parcel merchandise in the US and internationally.
Short sellers believe that GigaCloud Technology Inc. (NASDAQ:GCT)’s stock might be impacted as a result of gross margin pressures because of new warehouse additions, that normally take 4 – 6 months to become fully operational. Moreover, the seasonality and industry headwinds might weigh over the company’s top line in the upcoming quarters. Earlier, its margins were temporarily impacted by the costs related to new fulfillment centers and foreign exchange fluctuations. Also, there were sectoral headwinds related to the cooling of the housing market and lower consumer spending on durable goods.
On the other hand, Wall Street analysts believe that GigaCloud Technology Inc. (NASDAQ:GCT) is expected to be aided by diverse strategies and efficient supply chain management. These factors should help the company continue its growth trajectory. Market experts opine that GigaCloud Technology Inc. (NASDAQ:GCT) might witness continued growth from both organic and inorganic sources. These include further integration of the Noble House business and expansion of the B2B marketplace, Also, the company signed fixed-rate contracts to mitigate the effect of freight rates on gross margins.
GigaCloud Technology Inc. (NASDAQ:GCT) continues to focus on strategic mergers and acquisitions to drive volume growth and expand its ecosystem. Notably, the integration of Noble House SKUs and the roll-out of BaaS offering have been successful, and the latter has been receiving strong interest from sellers.
The demand for the company’s marketplace remains robust, evidenced by a ~40% rise in seller growth, touching 930 suppliers. Market experts believe that this should increase as GigaCloud Technology Inc. (NASDAQ:GCT) continues to execute its strategies. This expansion should help boost its Gross Merchandise Value (GMV), which in turn, might lead to revenue and earnings growth.
Lake Street Capital covered the shares of GigaCloud Technology Inc. (NASDAQ:GCT), giving a “Buy” rating with a price target of $50.00. The company was part of 5 hedge funds’ portfolios at the end of 2Q 2024, as per Insider Monkey’s database of 912 hedge funds.
While we acknowledge the potential of GCT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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