In this article, we will be taking a look at the 5 best new tech stocks to buy now. To read our discussion on the technology sector, you can go directly to the 12 Best New Tech Stocks to Buy Now.
5. Coinbase Global, Inc. (NASDAQ:COIN)
IPO Date: April 14, 2021
Number of Hedge Fund Holders: 29
Coinbase Global, Inc. (NASDAQ:COIN) is an operator of a cryptocurrency exchange platform with no physical headquarters, as employees work remotely.
In a research note issued to investors on September 9, Carlton Lai at Daiwa upgraded Coinbase Global, Inc. (NASDAQ:COIN) stock from an Outperform to a Buy rating. The analyst maintained a target price of $100 after the share price gave back some of its losses in the last month. Lai made this change on the back of the Ethereum Merge update, which is being seen as one of the biggest events in the cryptocurrency universe this year. The merge is expected to take place between September 13 and 15. During this time, Coinbase Global, Inc. (NASDAQ:COIN) has paused the withdrawal and deposits of Ether and ERC-20 tokens as a precautionary measure.
Here’s what was said about Coinbase Global, Inc. (NASDAQ:COIN) in the Q2 2022 investor letter of Hayden Capital:
“Coinbase (NASDAQ:COIN): The crypto ecosystem moves extremely quickly, and there’s been many new developments since we first invested in Coinbase, a year ago. Most notably, crypto market cap has declined from a peak of ~$3 Trillion last fall, to ~$1.1 Trillion today (a -63% decline, and -72% peak-to-trough; LINK). Crypto is a volatile asset class, and has experienced many draw-downs of similar magnitude in the past. For example, Bitcoin was down -93% during 2011, -85% from 2013-15, and -84% from 2017-18. In this context, the latest draw-down is a pretty normal outcome for this emerging asset class.
A large reason for this volatility, is simply because there aren’t any major “real-world use cases” for the asset just yet. In our letter outlining the investment last year, we wrote that crypto is still “in the middle of ‘crossing the chasm’ into mainstream adoption & use cases, which will result in millions of mainstream users needing to transact crypto in some form”…” (Click here to see the full text)
4. Marqeta, Inc. (NASDAQ:MQ)
IPO Date: June 9, 2021
Number of Hedge Fund Holders: 33
Marqeta, Inc. (NASDAQ:MQ) is an Oakland, California-based provider of open API card issuing platforms. The company has a headcount of over 800 employees and a presence in over 39 countries.
Marqeta, Inc. (NASDAQ:MQ) services digital banking, buy now pay later (BNPL), and on-demand delivery platforms through its solutions. The company heavily relies on Block, Inc. (NYSE:SQ), as 69% of the business comes from the San Francisco, California-based mobile payment solutions provider. Experts believe that Marqeta, Inc. (NASDAQ:MQ) could see limited growth potential during the second half of the year as clients of fintech companies have started to take a cautious approach due to the deterioration of the macroeconomic circumstances. However, the company’s fundamentals are expected to improve during the second half of 2023 as consumer discretionary spending has started to bounce back.
Marqeta, Inc. (NASDAQ:MQ) was mentioned in the Q4 2021 investor letter of Alger. Here’s what the firm said:
“Margeta facilitates the implementation of digital payment technologies. It is a Positive Dynamic Change beneficiary in the digital payments industry. We believe as more commerce is conducted digitally, the digitization and transformation of the payments ecosystem is needed, which Margeta seeks to address through its modern payment card issuing platform, providing infrastructure and tools for building configurable payment cards. Margeta offers issuer processor services and acts as a card program manager. Its platform creates customized payment cards that provide innovative payment experiences for their clients’ customers and end users.
Marqeta has emerged as a card issuing platform category leader in many disruptive verticals, including on-demand delivery, alternative lending, expense management, disbursement, digital remittances, and digital banks. Margeta’s solutions are even sought out by large financial institutions to improve their existing offerings and stay competitive with technology-focused new market entrants. Margeta detracted from performance despite achieving strong revenue growth with higher gross profitability and an expanded customer base in the third quarter. We believe the expiration of a lock up period and the company facing tough comparisons resulting from COVID-19 stimulus payments having boosted consumer spending contributed to the underperformance of Marqeta shares. Additionally, the still small footprints within the Margeta revenue base of crypto, truck brokerage and business-to-business clients may take time to scale.”
Overall, 33 elite funds reported owning a stake in Marqeta, Inc. (NASDAQ:MQ) during Q2 2022.
3. Rivian Automotive, Inc. (NASDAQ:RIVN)
IPO Date: November 9, 2021
Number of Hedge Fund Holders: 35
Rivian Automotive, Inc. (NASDAQ:RIVN) is an Irvine, California-based EV manufacturer.
In a note issued on September 9, Emmanuel Rosner at Deutsche Bank shared that he considers the joint venture with Mercedes Benz as a positive development for Rivian Automotive, Inc. (NASDAQ:RIVN). The analyst thinks that it will allow the company to enter the European market at a lower cost of investment. Furthermore, this will provide Rivian Automotive, Inc. (NASDAQ:RIVN) with more credibility in the area of automobiles and EVs. Rivian Automotive, Inc. (NASDAQ:RIVN) will be able to benefit from the strong supply chain network and manufacturing presence of Mercedes Benz to expand its presence across Europe swiftly.
Here’s what Baron Funds said about Rivian Automotive, Inc. (NASDAQ:RIVN) in its Q2 2022 investor letter:
“Rivian Automotive, Inc. designs, manufactures, and sells consumer and commercial electric vehicles. Shares of Rivian declined 48.2% in the second quarter as investors continued rotating out of long-duration assets and have become increasingly concerned about capital intensity and cash burn.
At the same time, Rivian continues to be impacted by supply chain issues which are causing delays in its production ramp. Rivian is addressing those challenges by diversifying its supply chain to alleviate shortages while also consolidating the number of variants in development to reduce cash burn (the company guided that current cash will be enough to support the company’s future platform launch ‘R2’ in 2025). Rivian recently reported stronger-than-expected second quarter production numbers while reiterating its annual guidance of producing 25,000 units.
As semiconductor shortages ease, we believe that the company will be able to rapidly ramp its production. We retain conviction in the shares given management’s vision, Rivian’s product positioning, the company’s relationship with Amazon.com, and its strong balance sheet. As of the end of the first quarter, Rivian had $17 billion of cash and cash equivalents, which will help it overcome the current challenges while taking advantage of the long-term opportunity as the market transitions to electric vehicles.”
2. GitLab Inc. (NASDAQ:GTLB)
IPO Date: October 14, 2021
Number of Hedge Fund Holders: 36
GitLab Inc. (NASDAQ:GTLB) is a San Francisco, California-based provider of DevOps platforms that aids organizations in developing and testing software in a safe and robust environment.
Mike Cikos at Needham gave GitLab Inc. (NASDAQ:GTLB) stock a Buy rating and a target price of $60 in a research note published on September 7. The analyst highlighted that the Q2 2022 results were strong as the company did not see a material impact from the macroeconomic downturn. GitLab Inc. (NASDAQ:GTLB) also provided healthy guidance for FY22 as well. However, GitLab Inc. (NASDAQ:GTLB) stock can be expected to face a tough time in the short run as investors become more cautious about the valuations of high-growth entities in the current macroeconomic situation.
GitLab Inc. (NASDAQ:GTLB) was discussed in the Q2 2022 investor letter of Baron Funds. Here’s what the firm said:
“Shares of GitLab Inc., a leading software tools development platform, outperformed in the quarter after reporting strong quarterly results with 75% year-over-year revenue growth while raising annual guidance to over 58% growth. The results were driven by robust net new customer wins with base customers growing 64% year-over-year while existing customers continue expanding rapidly. We continue to believe GitLab’s easy-to-use and open development platform, combined with its disruptive pricing model, position the company well for continued market share gains.”
1. Toast, Inc. (NYSE:TOST)
IPO Date: September 21, 2021
Number of Hedge Fund Holders: 40
Toast, Inc. (NYSE:TOST) is a Boston, Massachusetts-based provider of cloud-based restaurant management software. The company has a point-of-sales system developed on the Android platform.
Mayank Tandon at Needham increased the price target on Toast, Inc. (NYSE:TOST) from $21 to $27 and reiterated a Buy rating on the stock in a research note published on August 12. Toast, Inc. (NYSE:TOST) reported stellar ARR growth of 59% YoY as live locations grew by 42% YoY, and the Gross Payment volume jumped by 62% YoY during Q2 2022. Furthermore, Toast, Inc. (NYSE:TOST) also provided a robust outlook for Q3 2022 and improved its guidance to reflect the strong competitive position of the organization and healthy demand for modern cloud-based solutions by restaurants. The company’s strong fundamentals justify its inclusion in the list of the best technology stocks to buy now.
Here’s what Baron Funds said about Toast, Inc. (NYSE:TOST) in its Q3 2021 investor letter:
“We also participated in the IPO of Toast, Inc., a provider of technology and payment services for the restaurant industry. The company’s core offering is a point-of-sale hardware and software solution with integrated payment processing. Customers can add other features across operations including digital ordering and delivery, marketing and loyalty, team management, and back office. Toast powers 48,000 restaurant locations across 29,000 customers, most of which are small operators with under 10 locations. Toastis the clear leader in the technology market for small restaurants with the best product offering and the only end-to-end platform. Customers love the product and recommend it to their friends in the industry, driving strong inbound and referral business. Toast differentiates itself from the competition through its large field-based sales team that is deeply embedded in local communities, helping retain and upsell existing customers and onboard new customers.
We believe that as restaurants invest more in technology, Toast will be a prime beneficiary given its leading market position and best-in-class product. With an under 6% share of the 860,000 restaurant locations in the U.S. and a 3% share of a $15 billion addressable market, we believe Toast has a long runway for growth by adding customer locations and cross-selling additional products. Only 54% of Toast locations use four or more of Toast’s 10-plus products, each of which provide significant customer value and are additive to revenue. Toast stays close to its customers and continues to add innovative new features. Over time, we expect Toast will migrate up-market to increasingly serve the enterprise segment of the restaurant industry (customers with over 50 locations) and will enter new countries (22 million locations outside the U.S.), further expanding the addressable market and growth opportunity.”
As of Q2 2022, 40 funds held a stake in Toast, Inc. (NYSE:TOST).
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