In this article, we take a look at 14 best affordable tech stocks to buy now.
If a stock is priced at $100 per share or even $200 a share, more investors would be able to afford it than if it were priced at $1000 per share.
Nevertheless affordability is only one minor factor of a stock as most of the capital in the markets are held by institutions or wealthy individuals where the price of a stock doesn’t really matter. As such, the price of the stock isn’t as big of a factor as it may have been in the past.
Instead, the quality of a company’s business, its competitive advantages, and its future earnings growth potential matters far more to a stock price.
Buying blue chips with growth potential and competitive advantages is often times better than buying an average stock in the long term as blue chips are generally well known and established companies that are profitable.
In terms of growth, some leading technology blue chip stocks have potential future growth potential.
Many investors think that artificial intelligence will be the fourth industrial revolution and one that will allow the world to produce substantially more products and services as well as innovative products. Goldman Sachs recently estimated that generative AI could eventually help increase annual global GDP by 7% by increasing productivity. In the future, more advanced AI could help economic growth even further.
For those of you interested, check out 10 High Growth AI Stocks to Buy.
In the new AI and tech landscape where things can change fairly quickly, the future is uncertain. Although no one knows for sure which companies will succeed and which ones won’t, the big tech companies such as Microsoft Corporation (NASDAQ:MSFT) or Amazon.com, Inc. (NASDAQ:AMZN) in the United States that have invested a lot into AI have some advantages. Because it takes a lot of computer processing, existing big tech companies with substantial computer processing capability, data, and financial resources have a advantage in terms of future growth. Some other leading tech companies such as The Walt Disney Company (NYSE:DIS) can also play a role in the future with their own niches with licensing for instance.
Because AI is so fast changing, some leading tech companies could be left behind if they don’t innovate enough even though they are dominating now. As a result, it could be a good idea for long term investors to own a well diversified portfolio of leading stocks across many different sectors.
Photo by Carlos Muza on Unsplash
Methodology
For our list of 14 Best Affordable Tech Stocks to Buy Now, we chose 14 tech stocks with competitive advantages that trade for around $200 or under.
We then ranked each stock based on the number of hedge funds in our database of 943 funds that held shares in the same stock at the end of Q4.
14 Best Affordable Tech Stocks to Buy Now
14. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 18
SAP SE (NYSE:SAP) is an European enterprise software company that is owned by 18 hedge funds in our list of 943 funds, ranking the stock #14 on our list of 14 Best Affordable Tech Stocks to Buy Now. In January of this year, SAP SE (NYSE:SAP) embarked on a restructuring program to strengthen its core cloud business, which has grown over the years. As a result of its restructuring, Qualtrics agreed to sell itself to Silver Lake and the Canada Pension Plan Investment Board in a deal that is expected to close in the second half of 2023 if approved. SAP SE (NYSE:SAP) owns around 71% of Qualtrics and would stand to receive billions more in capital to potentially reinvest into growing its cloud business.
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13. Thomson Reuters Corporation (NYSE:TRI)
Number of Hedge Fund Holders: 19
Thomson Reuters Corporation (NYSE:TRI) is a leading financial data company that also provides professionals with intelligence, technology, and human expertise. In January, Thomson Reuters Corporation (NYSE:TRI) closed its $500 million cash acquisition of SurePrep, a leader in 1040 tax automation software and services to further the company’s strategy of providing cloud based workflows for professionals. Shares of Thomson Reuters Corporation (NYSE:TRI) trade for a forward P/E ratio of 34.21 as of March 26 as the market expects the company’s annual EPS to grow over the next several years.
12. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 43
International Business Machines Corporation (NYSE:IBM) is a leading tech company that is also a leader in quantum computing, which could be a huge market in the future if the technology is successful. International Business Machines Corporation (NYSE:IBM) in January announced that it will trim its global workforce by 1.5% or 3,900 jobs and hire in ‘higher growth areas’. 43 hedge funds in our database owned shares of International Business Machines Corporation (NYSE:IBM) at the end of Q4, ranking the stock #12 on our list of 14 Best Affordable Tech Stocks to Buy Now.
11. Paychex, Inc. (NASDAQ:PAYX)
Number of Hedge Fund Holders: 47
Paychex, Inc. (NASDAQ:PAYX) is a leading payroll service that allows companies to more easily handle their payroll processing. In terms of its business, Paychex, Inc. (NASDAQ:PAYX) handles around 1 in 12 U.S. private sector workers payroll, giving it the second largest market share in the industry in the United States. Furthermore, the company offers leading HR technology and a wide range of services to help small and midsized businesses. Given stronger demand for the company’s services, Paychex, Inc. (NASDAQ:PAYX)’s stock has more than tripled from the beginning of 2013 and shares could potentially go higher in the long term if the payroll market continues to expand and the company maintains its market share.
10. Automatic Data Processing (NASDAQ:ADP)
Number of Hedge Fund Holders: 49
Automatic Data Processing (NASDAQ:ADP) is the largest payroll service in the United States given the company handles 1 in 6 workers’ payroll in the United States and more than 40 million workers globally. Considering its leading market share, over 80% of the Fortune 500 are Automatic Data Processing (NASDAQ:ADP) clients. Globally, Automatic Data Processing (NASDAQ:ADP) serves 1 million clients in 140 countries, giving the company substantial scale. 49 hedge funds in our database owned shares of Automatic Data Processing (NASDAQ:ADP) at the end of Q4, ranking the stock #10 on our list of 14 Best Affordable Tech Stocks to Buy Now.
9. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 65
Oracle Corporation (NYSE:ORCL) is a leading enterprise software company that also has a cloud business that handles TikTok’s US user data. Given Congress is considering banning TikTok or forcing a sale, Oracle Corporation (NYSE:ORCL)’s cloud business could be disrupted in the near term depending on what the government ultimately decides. Nevertheless, Oracle Corporation (NYSE:ORCL) may also have an opportunity as it could be a potential bidder for TikTok if the company were to sell itself. There might not be as many bidders for TikTok as relatively few companies can afford it and several of the big tech companies who can afford it can’t buy for antitrust reasons.
8. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 70
Applied Materials, Inc. (NASDAQ:AMAT) is a leading semiconductor equipment manufacturer that also sells manufacturing equipment for the OLED display industry. With semiconductor demand expected to increase in the long term given the technology powers many modern devices, demand for Applied Materials, Inc. (NASDAQ:AMAT) could increase too, although the semiconductor equipment the company produces has fairly substantial competition. As a result, Applied Materials, Inc. (NASDAQ:AMAT) will need to innovate to maintain market share.
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 97
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor producer that could benefit from increased AI processing and the growth in the metaverse as that could mean more demand for the company’s various chips. For those of you interested, check out 10 Most Promising Metaverse Stocks to Buy.
Nevertheless, Advanced Micro Devices, Inc. (NASDAQ:AMD) will need to innovate to stay ahead of its competition, which could include big tech companies that own cloud computing platforms who want to save more money by making their own chips. As a result, Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the riskiest stocks on our list.
6. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 99
While it is perhaps more known as an entertainment company, The Walt Disney Company (NYSE:DIS) is also a tech stock given it owns the streaming platform Disney+. When combining Disney+, ESPN+, and Hulu, The Walt Disney Company (NYSE:DIS) actually has 235 million subscribers as of October 1, more than Netflix’s 223.09 million subscribers at the end of Q3 2022. The Walt Disney Company (NYSE:DIS) doesn’t realize as much revenue per subscriber as Netflix, however, and The Walt Disney Company (NYSE:DIS) is considering divesting its 67% Hulu stake.
The Walt Disney Company (NYSE:DIS) also has potential in the metaverse in the future as it could potentially license some of its entertainment brands such as Star Wars for future metaverse experiences or games.
99 hedge funds in our database owned shares of The Walt Disney Company (NYSE:DIS) at the end of Q4, ranking the stock #6 on our list of 14 Best Affordable Tech Stocks to Buy Now.
5. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 117
Salesforce, Inc. (NYSE:CRM) is one of the leading cloud software companies that laid off around 10% of its workforce mostly in early 2023. In addition, Salesforce, Inc. (NYSE:CRM) is also reducing its office space to more tightly control spending given the challenging economic environment. Recently COO Brian Millham said in Bloomberg that the company was considering further job cuts. Given 117 hedge funds in our database owned shares of Salesforce, Inc. (NYSE:CRM) at the end of Q4, the stock ranks #5 on our list of 14 Best Affordable Tech Stocks to Buy Now.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 135
Apple Inc. (NASDAQ:AAPL) is a tech giant that is most known for making the premium smartphone iPhone, which still accounts for the majority of the company’s revenue. In order to diversify, Apple Inc. (NASDAQ:AAPL) has over the years launched the iPad, iWatch, and also grown its services business substantially. To diversify further, Apple Inc. (NASDAQ:AAPL) recently demonstrated a mixed reality headset for its executives according to Bloomberg. The headset could potentially debut in public in June but is expected to be priced at potentially $3,000 which could limit adoption until the company finds a way to make the product more affordable.
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 152
Alphabet Inc. (NASDAQ:GOOG) is a search engine giant that has lately faced more competition given Microsoft has incorporated AI into Bing. Although the AI makes mistakes, Bing has gotten more search traffic as a result, and Alphabet Inc. (NASDAQ:GOOG) is planning on launching multiple AI products of its own this year. While it has had a powerful chatbot of its own for years, Alphabet Inc. (NASDAQ:GOOG) delayed the public release as its executives thought it posed a risk to reputation and to the search ad businesses. Given the potential disruption to the company’s most profitable business, Alphabet Inc. (NASDAQ:GOOG) trades for a forward P/E of 16.92 as of March 28, which could be cheap or expensive depending on how well the company adjusts to the new AI environment. If it doesn’t do well in AI, Alphabet Inc. (NASDAQ:GOOG) is one of the riskiest stocks on our list.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 194
Meta Platforms, Inc. (NASDAQ:META) is one of the hedge funds in our database’s more widely held stocks as 194 hedge funds in our database held shares of the social media giant at the end of Q4.
Although it is the leader in the social media, Meta Platforms, Inc. (NASDAQ:META) could potentially gain even more market share in the future as its competitor, TikTok, is under Congressional scrutiny. While TikTok is still the leader in short video, Meta Platforms, Inc. (NASDAQ:META) has invested billions of dollars into AI to make its competing product, Reels, more compelling.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 240
Amazon.com, Inc. (NASDAQ:AMZN) ranks #1 on our list of 14 Best Affordable Tech Stocks to Buy Now given 240 hedge funds in our database owned shares of the e-commerce and cloud computing leader at the end of Q4.
On March 20, Bloomberg reported that Amazon would lay off another 9,000 employees following the layoffs of 18,000 workers beginning last November. Several big tech companies have laid off a substantial percentage of their employees as the economy could potentially slow substantially in 2023. Although its financial results could face headwinds if the economy slows, Amazon.com, Inc. (NASDAQ:AMZN) has long term potential given its leading cloud computing business which could benefit from the increase in AI processing.
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Disclosure: None. 14 Best Affordable Tech Stocks to Buy Now is originally published on Insider Monkey.
