In this article, we discuss the 10 best cheap technology stocks to invest in.
As the financial markets crashed during the pandemic in 2020, investors remained bullish on tech stocks throughout the period. According to a report published by FactSet, the S&P 500 Technology sector has reported the second-largest positive difference between actual earnings and estimated earnings in Q3 2021. The sector’s earnings growth rate has increased to 32.1% from 28.6% in this period. This growth can offer great investment opportunities to investors as the tech sector is projected to thrive in 2022 as well. Moreover, technology companies represent approximately 46% of the S&P 500’s total market capitalization, with sales growing at twice the rate of non-tech companies, as reported by Bailard, an investment management firm.
The 5G rollout in the U.S. gave way to the adoption of artificial intelligence (AI) in nearly all major tech companies to streamline their operations. Along with this, many companies are also embracing cloud migration, especially after the Covid-19 pandemic. The companies with cloud technology were able to adapt to the work from home policy more quickly and efficiently than others. According to a report published by McKinsey & Company, over 70% of the companies will be deploying hybrid-cloud or multi-cloud platforms as a part of their whole infrastructure by 2022. The use of the cloud will further enhance the speed and efficiency of operations while strengthening cybersecurity defenses.
According to Kristina Hooper, a chief global market strategist at Invesco, tech stocks are going to benefit in the future, especially from increased corporate spending. Some of the notable technology companies include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT).
However, in this article, we’ll focus on cheap tech stocks.
Photo by Adam Nowakowski on Unsplash
Our Methodology:
For this article, we picked some cheap tech stocks with long-term growth potential. We preferred the stocks that are working on disruptive products and services with an explosive growth potential in the future. We also gave importance to analyst ratings and hedge fund sentiment.
Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by wide margins. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
10 Best Cheap Technology Stocks To Invest In
10. AmpliTech Group, Inc. (NASDAQ:AMPG)
Number of Hedge Fund Holders: 5
Share Price as of November 1: $3.92
AmpliTech Group, Inc. (NASDAQ:AMPG) is an American technology company that develops custom leading-edge RF components for commercial, space, and military markets. The number of hedge funds tracked by Insider Monkey having stakes in the company grew to 5 in Q2, from 2 in the previous quarter. The total value of these stakes is $2.5 million.
In Q2 2021, AmpliTech Group, Inc. (NASDAQ:AMPG) posted a GAAP EPS of -$0.05, beating the estimates by $0.06. The company’s revenue for the quarter stood at $1.02 million, up 54.5% from the prior-year quarter.
This July, Maxim initiated its coverage on AmpliTech Group, Inc. (NASDAQ:AMPG) with a Buy rating and a $10 price target, highlighting the company’s position in various growth markets, such as cybersecurity, satellite communication, and 5G.
Unlike expensive stocks like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), AmpliTech Group, Inc. (NASDAQ:AMPG) is a cheap tech stock with a strong upside potential.
9. Future FinTech Group Inc. (NASDAQ:FTFT)
Number of Hedge Fund Holders: 6
Share Price as of November 1: $2.12
Future FinTech Group Inc. (NASDAQ:FTFT) suffered a lot in the face of the pandemic in 2020, however, the stock bounced back in 2021, gaining 10%.
Future FinTech Group Inc. (NASDAQ:FTFT) is a Chinese technology company that is mainly involved in blockchain technology. The company has recently announced its plans to build a cryptocurrency mining farm in Paraguay to enhance its operations.
At the end of Q2, 6 hedge funds tracked by Insider Monkey reported owning stakes in Future FinTech Group Inc. (NASDAQ:FTFT), up from 2 in the previous quarter. The total value of these stakes is $900,000.
8. Exela Technologies, Inc. (NASDAQ:XELA)
Number of Hedge Fund Holders: 7
Share Price as of November 1: $2.06
Exela Technologies, Inc. (NASDAQ:XELA), a global business process automation (BPA) company, surged 23% on October 28 after the company offered its cloud-based global platform to CareSource, a healthcare company.
As of Q2, 7 hedge funds tracked by Insider Monkey have stakes in Exela Technologies, Inc. (NASDAQ:XELA), compared with 8 in the previous quarter. The total worth of these stakes is $7.5 million. Luminus Management is the company’s leading shareholder in Q2, with shares worth $3.1 million.
In Q2 2021, Exela Technologies, Inc. (NASDAQ:XELA) posted a GAAP EPS of -$0.33, beating the estimates by $0.12. This August, B. Riley initiated its coverage on Exela Technologies, Inc. (NASDAQ:XELA) with a Buy rating and a $4 price target, appreciating the company’s digital transformation and outsourcing.
Tech stocks like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT) and Exela Technologies, Inc. (NASDAQ:XELA) are gaining ground as investors gain confidence in the post-pandemic economy.
7. Pixelworks, Inc. (NASDAQ:PXLW)
Number of Hedge Fund Holders: 10
Share Price as of November 1: $4.33
Needham sees an potential upside in Pixelworks, Inc. (NASDAQ:PXLW) as the company started developing co-processor chips. Recently, the firm initiated its coverage on Pixelworks, Inc. (NASDAQ:PXLW) with a Buy rating and a $7 price target.
Since the beginning of the year, Pixelworks, Inc. (NASDAQ:PXLW) delivered a 89% return to shareholders.
In Q2, Pixelworks, Inc. (NASDAQ:PXLW) posted an EPS of -$0.05, beating the estimates by $0.02. The company’s revenue also presented a 51% year-over-year growth at $14.05 million.
Pixelworks, Inc. (NASDAQ:PXLW) is an American tech company that provides video and pixel processing semiconductors and software. At the end of June, 10 hedge funds tracked by Insider Monkey were bullish on the company, valued at over $9 million. In the previous quarter, 8 hedge funds had stakes in Pixelworks, Inc. (NASDAQ:PXLW), highlighting a positive hedge fund sentiment.
6. trivago N.V. (NASDAQ:TRVG)
Number of Hedge Fund Holders: 10
Share Price as of November 1: $2.64
trivago N.V. (NASDAQ:TRVG) is a Dutch technology company that specializes in internet-related services in the hotel and lodging markets. At the end of Q2, 10 hedge funds tracked by Insider Monkey had stakes in trivago N.V. (NASDAQ:TRVG), the same as in the previous quarter. The total value of these stakes is $67.7 million.
This June, Mizuho raised its price target on trivago N.V. (NASDAQ:TRVG) to $4, while keeping a Buy rating on the shares. The company announced its Q3 results on November 1, reporting revenue of £138.6 million, beating the estimates by £2.3 million. In the past year, trivago N.V. (NASDAQ:TRVG) gained 109.4%. PAR Capital Management is the company’s leading shareholder, owning 19.3 million shares.
5. Nano Dimension Ltd. (NASDAQ:NNDM)
Number of Hedge Fund Holders: 11
Share Price as of November 1: $6.28
Nano Dimension Ltd. (NASDAQ:NNDM), an Israeli technology company, reported solid results in Q2, with revenue of $0.81 million, presenting a 179.3% year-over-year growth. Currently traded at $6.29 per share, Nano Dimension Ltd. (NASDAQ:NNDM) is one of the best cheap technology stocks to invest in.
At the end of Q2, 11 hedge funds tracked by Insider Monkey reported owning stakes in Nano Dimension Ltd. (NASDAQ:NNDM), the same as in the previous quarter. These stakes are valued at roughly $174 million. Cathie Wood’s ARK Investment Management is the company’s leading shareholder in Q2, owning 16.3 million shares.
Nano Dimension Ltd. (NASDAQ:NNDM) delivered a 112.5% return to shareholders in the past year.
4. Skillz Inc. (NYSE:SKLZ)
Number of Hedge Fund Holders: 20
Share Price as of November 1: $12.04
Skillz Inc. (NYSE:SKLZ) went public on May 2020, traded at $9.85 per share at that time. The stock gained 19.2% since its IPO.
At the end of Q2, 20 hedge funds tracked by Insider Monkey reported owning stakes in Skillz Inc. (NYSE:SKLZ), down from 26 in the previous quarter. The total worth of these stakes is over $1.1billion, up from $672.9 million in Q1 2021.
Recently, BTIG initiated its coverage on Skillz Inc. (NYSE:SKLZ) with a Neutral rating, highlighting the company’s position in the growing iGaming industry. In Q2, Skillz Inc. (NYSE:SKLZ) reported revenue of $89.5 million, presenting a 52% year-over-year growth.
3. Synchronoss Technologies, Inc. (NASDAQ:SNCR)
Number of Hedge Fund Holders: 22
Share Price as of November 1: $2.50
Synchronoss Technologies, Inc. (NASDAQ:SNCR) presented a positive hedge fund sentiment in Q2, as 22 hedge funds tracked by Insider Monkey reported owning stakes in the company, up from 9 in the previous quarter. The total value of these stakes is over $34 million, compared with $8.4 million in the previous quarter.
Synchronoss Technologies, Inc. (NASDAQ:SNCR) is an American technology company that develops software products. In Q2 2021, the company reported revenue of $71.5 million, beating the analysts’ estimates by $4.79 million. This June, B. Riley initiated its coverage on Synchronoss Technologies, Inc. (NASDAQ:SNCR) with a Buy rating and a $5.25 price target. Cannell Capital is the company’s largest shareholder, with shares worth $7.9 million.
2. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 33
Share Price as of November 1: $12.07
On August 19, Lumen Technologies, Inc. (NYSE:LUMN), an American telecommunications company, declared a quarterly dividend of $0.25 per share, with a dividend yield of 8.82%.
On November 2, Lumen Technologies, Inc. (NYSE:LUMN) gained 3.5% as the company reported strong Q3 results. The company posted an EPS of $0.49, beating the estimates by $0.12. The average full-day trading volume of Lumen Technologies, Inc. (NYSE:LUMN) reached 10.8 million shares in October as analysts regarded fiber assets as valuable, expecting potential upside. Recently, Citigroup upgraded the stock to Neutral, while keeping a $13 price target.
At the end of Q2, 33 hedge funds tracked by Insider Monkey reported owning stakes in Lumen Technologies, Inc. (NYSE:LUMN), up from 32 in the previous quarter. The total value of these stakes is over $1 billion.
Longleaf Partners Fund mentioned Lumen Technologies, Inc. (NYSE:LUMN) in its Q1 2021 investor letter. Here is what the firm has to say:
“Lumen (40%, 3.33%), the global fiber company, was the top contributor. While COVID fallout still weighed on fourth quarter results, the company benefitted from positive business mix improvements. Early in the quarter, Lumen appreciated 38% in a few short days amidst the “Game Stop / Reddit” short cover phenomenon. After this shortterm bounce, Lumen’s stock price appreciated more steadily over the last six weeks of the quarter with improved results. Many of last year’s worst-case fears have not materialized and the outlook is improving for the core business. We continue to believe that the company has multiple ways within its control to both grow and realize value per share, and we have a 13D filed to allow us to discuss these options with the company. Lumen’s board, which includes Southeastern-nominated Chairman Mike Glenn from FedEx and Director Hal Jones from Graham Holdings, is doing good work to realize Lumen’s hidden value and return the business to FCF/share growth. Despite its appreciation, the stock trades at less than half of our appraisal.”
1. Opendoor Technologies Inc. (NASDAQ:OPEN)
Number of Hedge Fund Holders: 35
Share Price as of November 1: $24.75
This September, Citigroup resumed its coverage on Opendoor Technologies Inc. (NASDAQ:OPEN) with a Buy rating and a $40 price target, up from $34. The firm sees an opportunity in the company’s robust model. Opendoor Technologies Inc. (NASDAQ:OPEN) is an American online company for transacting in the residential real estate market.
At the end of Q2, 35 hedge funds tracked by Insider Monkey reported owning stakes in Opendoor Technologies Inc. (NASDAQ:OPEN), up from 33 in the previous quarter. The total value of these stakes is over $765 million.
In Q3, Opendoor Technologies Inc. (NASDAQ:OPEN) posted a GAAP EPS of -$0.09, beating the estimates by $0.08. The company’s revenue for the quarter stood at $2.27 billion, presenting a 570.4% year-over-year growth. In the past year, Opendoor Technologies Inc. (NASDAQ:OPEN) delivered a 59% return to shareholders. On November 9, the stock surged 19% as the company issued strong guidance.
Baron Opportunity Fund mentioned Opendoor Technologies Inc. (NASDAQ:OPEN) in its Q2 2021 investor letter. Here is what the firm has to say:
“Opendoor Technologies Inc. operates a digital platform for home purchases and sales on which buyers can tour homes, make offers, and secure financing, and sellers can receive next-day cash offers with flexible close dates. Shares were down in the quarter given rising mortgage rates and the potential knock-on effects to the housing environment. Despite investor concerns, the housing market remains robust. As the iBuying industry leader disrupting an enormous and highly inefficient industry, we believe Opendoor will grow regardless of the housing market environment.”
You can also take a look at 10 Best Technology Stocks That Pay Dividends and 15 Most Valuable Technology Companies in the World
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Disclosure. None. 10 Best Cheap Technology Stocks To Invest In is originally published on Insider Monkey.
