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 Alight Inc. (NYSE:ALIT) 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).

Alight Inc. (NYSE:ALIT)

Share Price as of December 24: $6.78

Number of Hedge Fund Holders: 40

Alight Inc. (NYSE:ALIT) is a prominent player in the cloud-based human capital technology sector, specializing in employee benefits and well-being solutions. The company provides a comprehensive platform known as Alight Worklife and serves many of the world’s largest organizations. This platform integrates various aspects of employee benefits, including health, wealth, and well-being management. It helps organizations enhance their workforce’s financial security and overall health. Alight Inc. (NYSE:ALIT) is one of the best low-priced stocks to buy in the technology sector.

In February 2024, the company launched Alight LumenAI, a next-generation AI engine that significantly enhances the capabilities of the Alight Worklife platform. This innovative AI integration allows for personalized content delivery, automated decision support, and improved data analytics. By utilizing AI to streamline processes and increase engagement, Alight Inc. (NYSE:ALIT) is positioned to drive better outcomes for both employers and employees. For instance, the new AI personalization features can improve HR outcomes by over 10%, while automation capabilities can drastically reduce document processing times from 10 minutes to nearly instant.

Moreover, Alight Inc.’s (NYSE:ALIT) strategic decisions in 2024 have strengthened its market position. In July, the company sold its Payroll & Professional Services business to focus more on its core offerings. This strategic move is aimed at transforming Alight Inc. (NYSE:ALIT) into a more streamlined company focused on employee wellbeing and benefits, allowing for a simpler operational model. Additionally, the completion of a cloud migration transformation in August has also resulted in a more simplified and efficient Alight Worklife platform. This move is expected to yield $75 million in annual savings.

Alight Inc.’s (NYSE:ALIT) focus on innovation through AI and strategic restructuring for efficiency makes it a compelling technology stock to consider for investment. Its robust platform and commitment to improving position it well for future growth.

Overall, ALIT ranks 1st on our list of the best low-priced technology stocks to buy now. While we acknowledge the potential of ALIT 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 ALIT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.