In this article, we will be taking a look at the 12 best new tech stocks to buy now. To skip our discussion on the technology sector, you can go directly to the 5 Best New Tech Stocks to Buy Now.
The importance of the technology sector can be gauged by the fact that the top five companies in the S&P 500 Index are Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOGL), Amazon.com, Inc. (NASDAQ:AMZN) and Tesla, Inc. (NASDAQ:TSLA). Except for the Austin, Texas-based electric vehicle (EV) manufacturer, all the remaining companies presently have a market capitalization of $1 trillion. Numerous tech companies are not far behind, and as a result, the technology sector represents 28% of the S&P 500 Index. The weightage of the tech sector is more than the combined weightage of the consumer discretionary and healthcare sector.
Most of these tech companies have observed a significant rise in value since their IPO. For instance, the market capitalization of Tesla, Inc. (NASDAQ:TSLA) at the time of its IPO in 2010 was around $2 billion. Since then, it has grown manifolds and currently stands at over $900 billion. It must be noted that on the first day of trading, the stock price of Tesla, Inc. (NASDAQ:TSLA) rose 40% to close at $23.89. Fast forward one year and seven days, the stock price of Tesla, Inc. (NASDAQ:TSLA) fell below its IPO price as investor sentiments overturned. However, as time passed, the company started to report operational and financial results that resulted in a humongous increase in stock price and, thus, strong returns for shareholders.
There have been concerns amongst the investors as some publicly listed tech companies took a serious beating in the market in the recent past. Some listed tech companies have lost as much as 70% of their value compared to the offer price as of September 2022. However, analysts remain bullish on the tech sector and believe that it has significant upside to offer to investors in the long run.
Image by Sergei Tokmakov Terms.Law from Pixabay
Our Methodology
We have discussed the technology stocks that went public in 2021 and 2022. We have looked at the business fundamentals, growth plans, and earnings reports of these companies. These stocks have been ranked according to the number of hedge funds having a stake in them as of Q2 2022.
Best New Tech Stocks to Buy Now
12. HeartCore Enterprises, Inc. (NASDAQ:HTCR)
IPO Date: February 9, 2022
HeartCore Enterprises, Inc. (NASDAQ:HTCR) is a Tokyo, Japan-based software development company that is a provider of customer experience software to its customers globally.
According to a research report issued by Fortune Business Insights, the market size of customer experience management solutions is expected to compound at an average rate of 16.2% to $32.53 billion by 2029. The increasing growth of artificial intelligence, personalization, and augmented reality is expected to provide impetus to HeartCore Enterprises, Inc. (NASDAQ:HTCR) stock price. The company is also expanding its footprint as it acquired a majority stake of 51% in the privately held software engineering service provider Sigmaways, which is involved in providing IT solutions. HeartCore Enterprises, Inc. (NASDAQ:HTCR) intends to complete the deal by paying through cash and stock. The company’s decent financials and growth plans make it one of the best technology stocks to buy now.
11. Udemy, Inc. (NASDAQ:UDMY)
IPO Date: October 29, 2021
Number of Hedge Fund Holders: 9
Udemy, Inc. (NASDAQ:UDMY) is a San Francisco, California-based online course provider for students and professionals. The company claims to provide over 200,000 courses and has an audience of over 54 million students from across the globe as of September 2022.
In a research note issued on September 7, Brett Knoblauch at Cantor Fitzgerald selected Udemy, Inc. (NASDAQ:UDMY) as a Top Pick and made no amendments to the target price of $20 with an Overweight rating. The analyst thinks that Udemy, Inc. (NASDAQ:UDMY) stock is trading at a discount to its actual value. This is because investors have taken a pessimistic view of the ed-tech sector as more than half of the company’s business is generated from the consumer segment that is cutting on discretionary expenditure and shifting its focus on staples due to rising inflation and interest rate.
However, Udemy, Inc. (NASDAQ:UDMY) is working on expanding its operations to maintain its position in the industry. In August, the company also became a part of the AWS Partner Network, which will provide AWS customers access to business solutions by Udemy, Inc. (NASDAQ:UDMY).
As of Q2 2022, Udemy, Inc. (NASDAQ:UDMY) was held by 9 hedge funds.
10. Credo Technology Group Holding Ltd (NASDAQ:CRDO)
IPO Date: January 26, 2022
Number of Hedge Fund Holders: 10
Credo Technology Group Holding Ltd (NASDAQ:CRDO) is a Cayman Island-based provider of high-speed connectivity solutions that increases cost and power efficiency. The company is considered a leader in Serializer-Deserializer (SerDes) technology, meriting its inclusion in our list of the best technology stocks to buy now.
Credo Technology Group Holding Ltd (NASDAQ:CRDO) posted its Q1 FY23 results on August 31. The top line surpassed the consensus estimates, and the adjusted EPS came in line with the forecast. Revenue increased by 333.8% YoY to $46.5 million and surpassed the analysts’ forecast of $45.7 million. Meanwhile, the adjusted EPS of three cents was in line with analysts’ forecast. Credo Technology Group Holding Ltd (NASDAQ:CRDO) anticipates Q2 FY23 revenue to be between $48.5 million to $52.5 million. At a midpoint of $50.5 million, it would signify a YoY growth of 91% YoY. Meanwhile, the consensus Q2 FY23 revenue estimate stands at $49.17 million.
As of Q2 2022, 10 hedge funds reported owning a stake in Credo Technology Group Holding Ltd (NASDAQ:CRDO).
9. HashiCorp, Inc. (NASDAQ:HCP)
IPO Date: December 8, 2021
Number of Hedge Fund Holders: 15
HashiCorp, Inc. (NASDAQ:HCP) is a San Francisco, California-based software company that helps organizations operate their infrastructure in the cloud through its multi-cloud infrastructure automation products. The company has open source and commercial offerings under its portfolio.
Brad Reback at Stifel gave HashiCorp, Inc. (NASDAQ:HCP) stock a target price of $45, along with a Buy rating in a research note issued to investors on September 2. The analyst highlighted that the company reported strong Q2 2022 results and also raised its revenue guidance for the full year. HashiCorp, Inc. (NASDAQ:HCP) is expected to take a headwind of $4 million to $6 million in the top line due to higher scrutiny regarding spending expected in the quarter. However, Reback added that he anticipates HashiCorp, Inc. (NASDAQ:HCP) to sustain YoY growth of over 30% as the corporation is working on strengthening its position in the tech sector.
Coatue Management was the leading hedge fund investor in HashiCorp, Inc. (NASDAQ:HCP) during Q2 2022.
8. UiPath Inc. (NYSE:PATH)
IPO Date: April 21, 2021
Number of Hedge Fund Holders: 24
UiPath Inc. (NYSE:PATH) is a New York-based developer of robotic process automation (RPA) software.
Following the Q2 2022 results, experts believe that UiPath Inc.’s (NYSE:PATH) go-to-market (GTM) repositioning efforts toward targeting enterprise or corporate customers will help the company in achieving profitability. However, the annual recurring revenue (ARR) growth will come under pressure due to macroeconomic circumstances and a shift of alignment towards an enterprise-oriented product. UiPath Inc. (NYSE:PATH) lowered its Q3 2022 revenue guidance, and observers believe that this has de-risked the company. For Q2 2022, UiPath Inc. (NYSE:PATH) reported revenue of $242.2 million and outclassed the consensus revenue forecast of $230.7 million.
Millennium Management raised its stake in UiPath Inc. (NYSE:PATH) by 139% during Q2 2022.
7. Robinhood Markets, Inc. (NASDAQ:HOOD)
IPO Date: July 28, 2021
Number of Hedge Fund Holders: 25
Robinhood Markets, Inc. (NASDAQ:HOOD) is a Menlo Park, California-based online trading platform that is known for providing commission-free trades of various financial assets like cryptocurrencies, exchange-traded funds (ETFs), and stocks.
CEO and co-founder Vlad Tenev highlighted on September 13 that Bitcoin remains the most preferred asset class on Robinhood Markets, Inc. (NASDAQ:HOOD), which investors favor in terms of recurring investment. As the biggest cryptocurrency in the world has been down over 54% in the last year, investors are employing a dollar-cost averaging strategy to lower the overall cost of their holdings by buying more quantities at a lower price to catch the bottom. This strategy works well when the market starts to bounce back and the holdings bought at a lower price start to give back significant returns.
In August, Robinhood Markets, Inc.’s (NASDAQ:HOOD) daily average revenue trades observed an increase of 19% to 2.2 million from the same period last year. Furthermore, the total net deposits were recorded at $84.5 billion in August, up from $83.8 billion in the previous month.
At the end of Q2 2022, 25 funds reported owning a stake in Robinhood Markets, Inc. (NASDAQ:HOOD).
6. SentinelOne, Inc. (NYSE:S)
IPO Date: June 30, 2021
Number of Hedge Fund Holders: 26
SentinelOne, Inc. (NYSE:S) is a Mountain View, California-based cybersecurity firm that is a provider of endpoint security software. The company is at the sixth position on our list of the 12 best technology stocks to buy now.
On September 6, Brad Zelnick at Deutsche Bank increased the price target on SentinelOne, Inc. (NYSE:S) from $30 to $32 and reiterated a Buy rating on the stock. The analyst highlighted that the company posted “strong” Q2 2022 results as the new ARR increased by $100 million during these uncertain economic times. The increase in ARR is the highest in the history of the organization. SentinelOne, Inc. (NYSE:S) also saw its Dollar-based Net Retention Rate rise to a record level of 137% and expansion of gross profit margins at a time when raging inflation and rising benchmark interest rates are causing margin contraction across the economy.
SentinelOne, Inc. (NYSE:S) was discussed in the Q4 2021 investor letter of ClearBridge Investments. Here’s what the firm said:
“We added six new positions in the fourth quarter. We see next-generation cybersecurity provider SentinelOne, although early in its growth lifecycle, as capable of taking share from legacy players in the antivirus and broader cybersecurity industry.”
While SentinelOne, Inc. (NYSE:S) is among one of the best new technology stocks to buy now, older tech stocks like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOGL) continue to attract investors’ attention.
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Disclose. None. 12 Best New Tech Stocks to Buy Now is originally published on Insider Monkey.
