We recently compiled a list of the 15 Best New Tech Stocks To Invest In. In this article, we are going to take a look at where NCR Atleos Corporation (NYSE:NATL) stands against the other feminist stocks.
On January 8, Rashaun Williams, Atlanta Falcons limited partner and venture capitalist, joined “Closing Bell” on CNBC to discuss his investment strategy and his outlook on the IPO market as 2025 began. He acknowledged the high expectations for a revival in the tech sector’s IPO activity but noted that such optimism required multiple factors to align perfectly, something that had not yet occurred. Despite this, he emphasized the importance of holding onto optimism, as the tech IPO market continues driving innovation and economic growth. Williams highlighted that while the primary IPO market faced challenges, the secondary market had gained prominence, which provided liquidity for founders and employees. This ensured that companies could sustain themselves through downturns.
Williams also discussed his perspective as an alternative investment manager and noted a shift in investor interest toward alternative assets. Over the past year, he observed heightened enthusiasm for late-stage tech companies, particularly those focused on AI and cybersecurity. These sectors have been pivotal in driving activity within his portfolio and funds. He emphasized that late-stage AI companies are generating substantial interest due to their transformative potential and alignment with current technological trends.
On the same day, Keith Fitz-Gerald, principal of Fitz-Gerald Group, also appeared on CNBC on ‘The Exchange’ to discuss his bullish case for tech. As 2025 began, the tech sector experienced a notable decline, with the NASDAQ 100 falling 1.5%, largely due to NVIDIA’s 5% drop, which shaved 90 points off the index. Despite this, Fitz-Gerald viewed the downturn as an opportunity. He highlighted the imminent monetization of AI and described the recent rally as child’s play, and predicted that the S&P 500 could exceed 7,000 by midyear, which was a bold claim grounded in his belief in the strength of US-based AI companies with dominant market positions and profit margins.
On concerns about high valuations, he acknowledged historical trends linking elevated P/E ratios to lower returns but argued that this is misleading for digital companies. He explained that businesses benefiting from economies of scale, like those in AI, naturally exhibit higher P/E ratios due to minimal costs for acquiring incremental customers. This signal strength rather than overvaluation. He dismissed concerns about the current market softness and characterized it as a technical sell-off due to large traders reallocating funds rather than a reflection of weak fundamentals. He said that AI’s expansion and the trillions being invested into it mark only the beginning of a transformative era for tech.
Methodology
We first used the Finviz stock screener to look for companies that went public in the past 3 years. We sorted our screen by IPO date and market cap and looked through the top 35 stocks that recently went public and are trading at a valuation of over $1 billion. We then selected 15 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024.
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).
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NCR Atleos Corporation (NYSE:NATL)
Market Capitalization as of January 21: $2.39 billion
Number of Hedge Fund Holders: 27
NCR Atleos Corp. (NYSE:NATL) provides financial technology solutions and specializes in self-service banking, ATM networks, and managed network services. It offers several products and services, including ATMs, ITMs, network solutions, and professional services. Its customers include financial institutions, retailers, and other enterprises globally.
The company received a Buy rating from Compass Point on 23 December 2024, with a price target of $57. This bullish outlook is based on a forecast of its free cash flow reaching $418 million by the end of FY26 and a market capitalization/free cash flow multiple of 10x. The company is considered to be in a strong market position with a 36% market share in the ATM sector and is well-equipped to benefit from the demand for managed services and ATM as a Service (ATMaaS) products. The firm anticipates that its ARPU will rise from 5.1 in 2024 to 5.9 by 2026 in the self-service banking segment.
In the third quarter of 2024, NCR Atleos Corp. (NYSE:NATL) made $1.08 billion in revenue driven by the ATMaaS business. ATMaaS revenue surged 23% year-over-year to $49 million in the quarter, driven by a 46% increase in live customers and expansion into 10 new markets. This growth translated to a 19% increase in gross profit to $16.1 million. While the current focus is on maximizing revenue per unit, the long-term goal is to expand the services provided to customers, leading to growth potential.
Overall NATL ranks 5th on our list of the new tech stocks to invest in. While we acknowledge the potential of NATL as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NATL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
