We recently compiled a list of the 10 Best Low Priced Technology Stocks To Buy Now. In this article, we are going to take a look at where Marqeta Inc. (NASDAQ:MQ) stands against the other low-priced technology stocks.
The Rising Significance of Technology: Is Now the Time to Invest?
The technology sector plays a crucial role in the modern economy, encompassing a wide range of industries. This sector can include businesses involved in electronics, software, artificial intelligence (AI), and information technology, among others. As companies increasingly rely on technological innovations to enhance productivity and efficiency, the technology sector is poised for growth as it becomes essential for both consumers and businesses.
Recent trends indicate a significant shift towards AI, cloud computing, and cybersecurity as key drivers of growth. Enterprise spending in these areas is expected to increase, driving growth in the global tech market.
Generative AI is becoming more important than ever as a vital tool for many organizations, marking a significant shift from experimentation to practical application. According to the latest McKinsey Global Survey on AI, conducted in the first half of 2024, 65% of respondents indicated that their companies are now regularly utilizing generative AI, nearly double the figure from just ten months prior. This surge in adoption reflects a growing belief in the technology’s potential, with 75% of respondents anticipating that generative AI will bring about substantial changes in their industries in the coming years. The overall adoption of AI has also seen a notable increase, rising from around 50% to 72% over the past year.
Technology-oriented stocks are set to achieve another impressive year by the end of 2024, according to U.S. Bank Asset Management. As of mid-December, the S&P 500 Communication Services and Information Technology index has risen over 40% year-to-date, following a remarkable 57% increase in 2023. Although technology stock performance slowed down in the third quarter of 2024, it regained momentum in the fourth quarter. According to Rob Haworth, senior investment strategy director for U.S. Bank Asset Management, corporate investments in artificial intelligence (AI) applications continue to drive this growth, even though the pace of AI spending eased slightly in the third quarter.
Investors are attracted to the tech sector because of its innovative nature. Terry Sandven, chief equity strategist with U.S. Bank Asset Management, emphasizes that technology is crucial for improving speed and efficiency across various industries. While the sector can experience short-term fluctuations, Sandven remains confident about its long-term prospects, as companies seek growth through technology rather than simply hiring more staff. Haworth shares this optimism, noting that technology stocks are central to current economic expansion and benefit significantly from business capital investments. However, he notes that investors still need to be careful in their approach to this sector. While some tech startups achieve great success, others may fail to get off the ground.
Methodology
To compile our list of the 10 best low-priced technology stocks to buy now, we used the Finviz stock screener. We sorted our results based on market capitalization and picked the top 25 technology companies with a share price of under $10 as of December 24, 2024. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 10 best low-priced technology stocks to buy now were then ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A financial services team at work reviewing customer data on their digital bank.
Marqeta Inc. (NASDAQ:MQ)
Share Price as of December 24: $3.66
Number of Hedge Fund Holders: 33
Marqeta Inc. (NASDAQ:MQ) is a technology company that specializes in modern card issuing. It provides a platform that enables businesses to create customizable payment cards and embed financial services into their applications. With its open API infrastructure, Marqeta Inc. (NASDAQ:MQ) allows companies to quickly issue cards and manage payments, enhancing user experiences and facilitating new financial opportunities.
In the third quarter of 2024, Marqeta Inc. (NASDAQ:MQ) reported impressive financial results. The Total Processing Volume (TPV) reached $74 billion, reflecting a 30% increase compared to the previous year. The company generated $128 million in net revenue, an 18% rise, while gross profit climbed 24% to $90 million. These figures demonstrate Marqeta Inc.’s (NASDAQ:MQ) strong performance and growing market presence.
The company also introduced several new products that enhance its platform. One significant update is the Portfolio Migration service, which simplifies the transition for customers moving their card programs to the Marqeta platform without disrupting their existing services. In October, this feature successfully migrated millions of Klarna cards in Europe onto the platform, showcasing Marqeta Inc.’s (NASDAQ:MQ) capability to grow its business.
Another innovative offering is Marqeta Flex, which transforms how Buy Now Pay Later (BNPL) loans are integrated into payment apps. This solution aims to increase BNPL adoption by providing personalized options within popular payment applications. Additionally, in Q3 2024, Marqeta Inc. (NASDAQ:MQ) launched the UX Toolkit that allows clients to create tailored user interfaces for their card programs, improving customer engagement with fewer resources. Given these strong financial results and strategic product developments, Marqeta Inc. (NASDAQ:MQ) presents a compelling case as a technology stock to consider for investment.
Overall, MQ ranks 4th on our list of the best low-priced technology stocks to buy now. While we acknowledge the potential of MQ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MQ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.