13 Best Affordable Tech Stocks To Buy According to Analysts
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In this article, we will be taking a look at the 13 best affordable tech stocks to buy according to analysts. To skip our detailed analysis of the tech sector, you can go directly to see the 5 Best Affordable Tech Stocks To Buy According to Analysts.
Tech Sector Growth in 2024
On January 29, Fidelity Investments issued its outlook for the technology sector for 2024 and beyond. According to Fidelity, tech's performance in 2024 will depend on the macro environment to a certain extent. The outlook report noted that in 2023, tech finished the race as the top performer among all market sectors, a position it continued to occupy till late January of 2024, when it still outperformed the S&P 500. The biggest contributor to this has been coming from artificial intelligence (AI).
Despite this, some financial professionals find it difficult to hop on the tech stock wagon, believing that most tech stocks are overpriced. For instance, on February 6, Bloomberg reported that Amundi SA, Europe's biggest fund manager, believes that the optimism in tech stocks is misplaced, resulting in the fund manager refraining from joining the "big tech stocks frenzy." Additionally, analysts at Bank of America Corporation and JPMorgan Chase & Co. have been drawing parallels between the price levels of tech stocks today and the dot-com era bubble. As is the case with any bubble, it may be the case that this AI bubble, too, will soon burst.
While this skepticism is also rising, many investors are still attracted to tech. On January 29, Chris Harvey, the head of equity strategy at Wells Fargo Securities, appeared on Bloomberg Radio to discuss this. His reasoning for tech stocks remaining an attractive investment is based on the following factors:
"They have annuity-like businesses, they have pricing power, and they have global brands... the market views them as the stocks they go to. It's the all-weather stock."
Thus, the debate on whether investors should rush to buy tech stocks or avoid them for the moment continues. For those looking to buy into tech, there are some key areas they should look out for.
Top Areas in Tech: AI, Semiconductors, and Cloud Computing
According to Fidelity, artificial intelligence, semiconductors, and cloud computing are the main areas to look at in the tech sector for investors today. Semiconductor companies have been investing in AI with increasing fervor since the launch of ChatGPT and, in some cases, even before then. The rise of AI has actually propelled semiconductor companies to greater heights since the use of their chips in AI applications has become practically essential. In the case of cloud computing, dedicated tech investors will know that this area of tech has been around and been popular for a long time. With companies and enterprises swiftly moving their data and workloads to the cloud, companies offering cloud-based software are gaining and retaining investor attention and money.
All in all, tech may be a sector with a bright future. According to Deloitte's 2024 Technology Industry Outlook, global IT investments in 2024 are expected to see double-digit growth in spending for software and IT services. Additionally, analyst estimates show that public cloud spending will grow by over 20% this year, with AI investments also significantly contributing to increased overall spending growth for tech. Deloitte's outlook noted that by 2025, AI-related investments may reach $200 billion globally, with the US leading in this area.
Considering the above, big-tech companies, such as Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOGL), are considered to be the best investment picks this year. However, these companies are far from affordable for many investors, including many new investors. This is especially the case considering the skepticism concerning the perceived overvaluation of tech stocks in the market today. Hence, cheaper tech stocks with immense potential in today's market may be an excellent place to start your tech investment. As such, we have compiled a list of some of the best affordable tech stocks to buy now. Our list includes some of the most undervalued tech stocks to buy, alongside some of the tech stocks to buy that are too cheap to ignore.
Our Methodology
For our list of the best affordable tech stocks to buy, we used a stock screener to identify tech stocks with share prices below $50 and P/E ratios under 25. We then shortlisted our 13 best affordable tech stocks by looking at their upside potentials and selected the stocks with the highest upside potentials. The stocks are ranked based on this metric, from the lowest to the highest upside potential as of March 24. We also mentioned the number of hedge funds holding stakes in each stock by using Insider Monkey's hedge fund data for the fourth quarter. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by over 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Best Affordable Tech Stocks To Buy According to Analysts
13. Vishay Precision Group, Inc. (NYSE:VPG)
Number of Hedge Fund Holders: 18
Upside Potential: 7.4%
Share Price: $34.4
P/E ratio: 18.3
Vishay Precision Group, Inc. (NYSE:VPG) is an information technology company based in Malvern, Pennsylvania. It designs, manufactures, and markets specialized sensors, weighing solutions, and measurement systems.
In total, 18 hedge funds were long Vishay Precision Group, Inc. (NYSE:VPG) in the fourth quarter, with a total stake value of $98.7 million.
While Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOGL) may be expensive to buy into today, Vishay Precision Group, Inc. (NYSE:VPG) is among the best affordable tech stocks to buy instead.
12. Magic Software Enterprises Ltd. (NASDAQ:MGIC)
Number of Hedge Fund Holders: 3
Upside Potential: 16.3%
Share Price: $12.04
P/E ratio: 16.03
Magic Software Enterprises Ltd. (NASDAQ:MGIC) is an application software company that provides proprietary application development, vertical software solutions, business process integration, and more. It is based in Israel.
On March 14, Barclays analysts maintained an Overweight rating and $14 price target on Magic Software Enterprises Ltd. (NASDAQ:MGIC).
Three hedge funds were long Magic Software Enterprises Ltd. (NASDAQ:MGIC) in the fourth quarter, with a total stake value of $5.4 million.
Millennium Management was the largest shareholder in Magic Software Enterprises Ltd. (NASDAQ:MGIC) at the end of the fourth quarter, holding 93,918 shares in the company.
11. LSI Industries, Inc. (NASDAQ:LYTS)
Number of Hedge Fund Holders: 13
Upside Potential: 21.6%
Share Price: $15.2
P/E ratio: 16.8
LSI Industries, Inc. (NASDAQ:LYTS) was seen in the portfolios of 13 hedge funds in the fourth quarter, holding a total stake value of $64.6 million.
Based in Cincinnati, Ohio, LSI Industries, Inc. (NASDAQ:LYTS) is an electrical components and equipment company. It offers sensors, motion detectors, and Bluetooth systems and also designs electronic circuit boards, assemblies, and sub-assemblies. The company also offers printed and structural graphics, digital signage, display fixtures, and more.
10. Allient Inc. (NASDAQ:ALNT)
Number of Hedge Fund Holders: 19
Upside Potential: 22.7%
Share Price: $33.4
P/E ratio: 22.5
Craig-Hallum analysts hold a Buy rating and $41 price target on Allient Inc. (NASDAQ:ALNT) as of March 7.
Allient Inc. (NASDAQ:ALNT) is another electrical components and equipment company on our list of the best affordable tech stocks. It offers brush and brushless DC motors, coreless DC motors, motion controllers, optical encoders, and lightweighting technologies, among more. The company is based in Amherst, New York.
Our hedge fund data for the fourth quarter shows 19 hedge funds long Allient Inc. (NASDAQ:ALNT), with a total stake value of $66 million.
Diamond Hill Capital mentioned Allient Inc. (NASDAQ:ALNT) in its fourth-quarter 2023 investor letter:
“Other bottom contributors included Concrete Pumping Holdings, Energy Recovery and Allient Inc. (NASDAQ:ALNT). Allient, which designs and manufactures precision and specialty controlled motion components and systems, benefited from an improving supply chain environment which allowed it to fill some long-standing orders, driving revenue growth. Further, the company’s order book for the next couple years is growing, and we anticipate it should capitalize well on long-term demand for its core motion control products as concerns about industry destocking and the global macroeconomic environment ease.”
9. CI&T Inc (NYSE:CINT)
Number of Hedge Fund Holders: 7
Upside Potential: 25.1%
Share Price: $4.3
P/E ratio: 17.7
Leucadia National was the most prominent shareholder in CI&T Inc (NYSE:CINT) at the end of the fourth quarter, holding 1 million shares in the company.
CI&T Inc (NYSE:CINT) is another information technology company on our list of the best affordable tech stocks. It provides strategy, design, and software engineering services to enable digital transformation for enterprises and companies.
As of March 18, Canaccord Genuity analysts maintain a Hold rating and a $5 price target on CI&T Inc (NYSE:CINT).
Seven hedge funds were long CI&T Inc (NYSE:CINT) in the fourth quarter, with a total stake value of $3.8 million.
8. Daktronics, Inc. (NASDAQ:DAKT)
Number of Hedge Fund Holders: 20
Upside Potential: 36.3%
Share Price: $9.4
P/E ratio: 8.2
Based in Brookings, South Dakota, Daktronics, Inc. (NASDAQ:DAKT) is an electronic equipment and instruments company. It manufactures and markets electronic display systems and related products, such as video displays, intelligent transportation systems dynamic message signs, digital billboards, and more.
Daktronics, Inc. (NASDAQ:DAKT) was spotted in the 13F holdings of 20 hedge funds in the fourth quarter, with a total stake value of $53.6 million.
7. Everspin Technologies, Inc. (NASDAQ:MRAM)
Number of Hedge Fund Holders: 16
Upside Potential: 38.2%
Share Price: $8.3
P/E ratio: 19.7
At the end of the fourth quarter, D E Shaw was the largest shareholder in Everspin Technologies, Inc. (NASDAQ:MRAM), holding 666,701 shares in the company.
On February 29, Needham analysts reiterated a Buy rating and $12 price target on Everspin Technologies, Inc. (NASDAQ:MRAM).
Everspin Technologies, Inc. (NASDAQ:MRAM) is a semiconductor company based in Chandler, Arizona. It manufactures and sells magnetoresistive random access memory products such as the Toggle MRAM, spin-transfer torque MRAM, and tunnel magnetoresistance sensor products, among more.
At the end of the fourth quarter, 16 hedge funds were long Everspin Technologies, Inc. (NASDAQ:MRAM), with a total stake value of $19.9 million.
6. Immersion Corporation (NASDAQ:IMMR)
Number of Hedge Fund Holders: 13
Upside Potential: 41.2%
Share Price: $7.8
P/E ratio: 7.5
Based in Aventura, Florida, Immersion Corporation (NASDAQ:IMMR) is a technology hardware, storage, and peripherals company. It designs, develops, and licenses haptic technologies, allowing people to use their sense of touch to engage with and experience digital products.
Immersion Corporation (NASDAQ:IMMR) had 13 hedge funds long its stock in the fourth quarter, with a total stake value of $24.7 million.
BWS Financial analysts maintain a Buy rating and $11 price target on Immersion Corporation (NASDAQ:IMMR) as of March 12.
While most investors may find stocks like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOGL) a bit pricey, Immersion Corporation (NASDAQ:IMMR) may be a good option for them if they're looking for some of the best affordable tech stocks to buy.
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Disclosure: None. 13 Best Affordable Tech Stocks To Buy According to Analysts is originally published on Insider Monkey.