4 Bargain Tech Stocks to Enhance Portfolio Returns in 2024

Anirudha Bhagat
6 min read

In This Article:

Tech stocks made a remarkable comeback in 2023 after a massive sell-off in 2022 on recession concerns, inflationary pressure, increased oil prices and higher interest rates. With last year’s rise of 43.4%, the tech-laden Nasdaq Composite has outperformed The Dow Jones Industrial Average and the S&P 500 index’s increase of 13.7% and 24.2%, respectively.

Technology stocks have more than 50% of weightage in the Nasdaq Composite index. Technology Select Sector SPDR, the most important component of the broad market index, has returned 54.7% YTD.

The rally has been primarily driven by cooling inflationary pressure and declining gasoline prices, which have subsided the fears of a recession. A resurgence in global semiconductor sales, along with a potential benchmark interest rate cut this year, is expected to continue driving the momentum for tech stocks in 2024.

The tech sector's 2023 rally catapulted several stocks to new heights, but it also created disparities. Amid the fervor, many fundamentally strong tech companies didn't witness the same elevation in their stock prices, making them potentially lucrative but often overlooked opportunities. This post-rally evaluation in 2024 is a chance for investors to unearth undervalued tech gems that might have been sidelined during the fervent market activity.

In our opinion, Zoom Video Communications Inc. ZM, BlackLine, Inc. BL, PLDT Inc. PHI and TransAct Technologies Incorporated TACT are among the stocks that were left behind last year’s tech rally. Given the strength of their fundamentals and solid prospects, it seems wise to add these stocks to your portfolio. These are among the bargain stocks that are poised for robust gains in 2024.

4 Prominent Picks

Zoom’s cloud-native unified communications platform, which combines video, audio, phone, screen sharing and chat functionalities, makes remote working and collaboration easy. ZM stock advanced 6.2% last year, significantly underperforming the Zacks Computer and Technology sector’s increase of 53.4%. With a closing price of $71.91 on Dec 29, 2023, the stock trades 15.5% lower than the 52-week high of $85.13.

Zoom is gaining significant traction from the hybrid working wave, which has accelerated the need for digital transformation among enterprises. The company is benefiting from steady growth in its subscriber base and enterprise customer base, backed by the strong demand for offerings like Zoom Phone. The launch of AI-driven solutions like Zoom Doc and Zoom AI Companion holds promise. Zoom’s expanding international presence is a key catalyst. The company’s freemium business model helps it win customers rapidly, which it can later convert into paying customers.

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