A price target is where analysts think a share will be in a year. The share price is what buyers are actually paying for it today. When those two drift a long way apart, the useful question is which one moved. On this list, they have drifted a long way apart. Every company here also trades below its 52-week high, and on average about a third below it. These are not overlooked businesses. They are businesses that were priced considerably higher within the past twelve months.
Micron is up more than 300% over the past year and still trades well below both its high and the median analyst target. It ran hard, it gave some of it back, and the target is sitting above it. SanDisk tells the same story more sharply still, up more than 700% over the past year and trading well below its own peak.
Oracle has lost more than half its value over the past year. In both cases, the price has fallen back from a high and still sits well below what analysts expect. What differs is whether the fall was deserved. A screen cannot answer that, and the answer is most of the investment case.
Storage is where the gaps cluster hardest. Micron, SanDisk and Seagate hold three of the four widest on the list, and all three sell the same underlying thing, which is somewhere to put data. That business has been repriced violently in both directions over the past year. We ranked that corner of the market in 7 Best Memory Stocks to Buy According to Analysts back in April. The stock we put first has returned 66.8% since. To see the six names behind it, click HERE.
The list also reads like a map of one industry rather than a set of unrelated bets. Taiwan Semiconductor manufactures chips, and Nvidia, Broadcom and Marvell design them. Micron and SanDisk make memory, while Seagate makes the disk drives that memory competes against. ASML and Applied Materials build the machines the chipmakers depend on. Oracle is the only one here whose main business is software.
That is worth holding onto as you read. These companies have performed very differently over the past year, but almost all of them depend on the same thing, which is spending on computing hardware, so buying several of them concentrates exposure more than the number of names suggests. The large technology companies with the most room left to run turn out to be, very nearly, the companies that make the physical parts of computers.
Given this backdrop, we will take a look at the most promising technology stocks to buy right now.
Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.
Our Methodology:
To list the 10 Most Promising Technology Stocks to Buy Right Now, we used several stock screeners to identify technology companies carrying an analyst consensus rating of Buy or better. We then confirmed each company’s upside potential on CNN, which compares the current share price against the median one-year price target of the analysts covering the stock. From that pool, we selected ten of the largest companies whose median target sits at least 30% above the current price. All figures are as of October 15. Finally, the stocks are arranged in ascending order of their upside potential.
Why are we interested in the stocks that hedge funds pile into? 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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Upside Potential: 30.18%
Market Cap: $2.13 Trillion
Read more: 10 Best Semiconductor Stocks to Buy According to Billionaires
