Let’s face it, tech stocks are a fun group when it comes to investing. These are the companies we have gotten so used to. Whether it’s the video games we play, smartphones we use or software that makes our lives easier, the hands-on utilization makes this a place investors want to park their cash.
Of course, it helps that this group can also see torrid growth and aggressive gains in the stock prices. All of this feeds into the “fun” part of investing.
However, all of that fun and excitement can lead to problems, too. Overcrowded trades, high valuations and increased volatility are just some of those issues. Still, long-term holders in many of these names have been rewarded handsomely for their patience.
Is that going to be the case in the future? Of course. We just need to know which stocks could be beneficiaries of that excitement. To get an idea of them, let’s look at a handful of tech stocks with new products on the way.
- Apple (NASDAQ:AAPL)
- PayPal (NASDAQ:PYPL)
- Shopify (NYSE:SHOP)
- Tesla (NASDAQ:TSLA)
- Nio (NYSE:NIO)
- DraftKings (NASDAQ:DKNG)
- Peloton (NASDAQ:PTON)
Tech Stocks With New Products: Apple (AAPL)
How could we not lead off this list of tech stocks without starting with Apple?
Lest we forget that Apple is the largest company in the stock market at this time, standing tall with its $2.23 trillion market capitalization. But that’s not all. The company just introduced a slew of new products in the last few months.
Those products include its first 5G iPhones, new iPad, Apple Watches and Mac computers. Regarding the latter, Apple really dealt a blow to Intel (NASDAQ:INTC) as it transitions away from Intel cores and to its own silicon.
For now, the new M1 chip is in the Mac Mini, Macbook Pro and Macbook Air. So far, performance measures have been off the charts, while the battery life in the notebooks have been stellar.
Apple expects another Mac refresh in the summer and has drastically accelerated the timeline for integrating the M1 chip in its products. That could create for an exciting push in this space, as Apple’s computers refresh at a faster rate.
That’s not to mention that we will get another round of new iPhones in the second half of the year.
Look for Apple to maintain its spot atop the tech landscape.
Shopify has become one of the hardest stocks to buy, in my opinion. Its valuation is astronomical, yet I can’t see how this company fails. It’s becoming a bedrock in e-commerce, failing to yield to giants like Amazon (NASDAQ:AMZN) as more and more vendors shift to Shopify’s platform.
Should the stock ever fall too far, I imagine there will be a group of aggressive buyers on the M&A front.
The company continues to introduce fresh innovations with its platform, making it stickier for its customers. As those customers grow, so too does Shopify’s recurring revenue and ecosystem.
Today, social platforms are our digital Main Street, and we form relationships with brands based on the online experience they provide every step of the way. That’s why, for the first time, we’re expanding Shop Pay…to all Shopify merchants selling on Facebook and Instagram.
What could PayPal do that’s so exciting? Well, aside from watching its stock hit new high after new high, let’s consider its recent move: Crypto.
The company recently began letting its users buy and sell various cryptocurrencies on its platform. They include Bitcoin, Bitcoin Cash, Etherium and Litecoin.
Will it include others in the future? I wouldn’t be surprised. Further, PayPal has already said it will roll out the buying and selling crypto on its Venmo platform as well. Those features are expected in the next several months, along with others.
PayPal also has plans to introduce budgeting and saving tools into its Venmo platform, along with other investment alternatives.
Finally, “the company also plans to put its $4 billion Honey acquisition to work by integrating its suite of shopping tools into the Venmo app, including merchant offers, deals, price tracking and wish lists.”
In other words, this company is innovating as fast as it possibly can. It will continue to roll out new features and assuming they are successful, they will continue to drive growth for the business.
I’m not sure if there’s a mega-cap stock that’s been more impressive than Tesla at this point. In the summer of 2019, the company looked to be in a real jam, as bears forced the stock price lower and as some longtime bulls were beginning to fold due to liquidity concerns.
On a split-adjusted basis, the stock bottomed at $35.40 on June 3, 2019. Fast forward to today and shares are trading near $800, about $100 off its 2021 high. Even more impressive is Tesla’s $760 billion market cap.
Some might argue that the run has to end because of the enormous rally we’ve seen. Maybe it will, maybe it won’t. But it likely won’t be a result of Tesla’s lack of innovation.
The company’s strides in electric vehicles (EVs) has been unrivaled at this point. Its progress in autonomous driving is impressive as well.
Then consider the company’s continued expansion in around the world, while consumers look forward to the Cybertruck, Tesla Semi and the Roadster. Additionally, don’t forget about Tesla’s work in energy and with its solar roof concept.
Can its business support the valuation? Who knows. But there’s no lack of innovation with Elon Musk’s company.
It’s hard to talk about Tesla without mentioning Nio. While Tesla has given investors a low-to-high rally of 2,443% from 2019, Nio has done even better. Shares bottomed at $1.19 a share and have now rallied more than 5,500%.
What in the world is going on with EV stocks?
Like Tesla, the main culprit for Nio’s big dip was a liquidity concern. As soon as the automaker addressed that issue, its stock hasn’t looked back. As EVs maintain momentum, let’s not forget that Tesla and Nio have a strong foothold in China to help drive growth too.
Deliveries are booming with Nio, with 2020 results more than doubling year over year despite a pandemic that severely disrupted production. Deliveries in January 2021 were up more than 350% vs. January 2020, as well.
Remember, Nio began shipping the EC6 SUV just a few months ago, while planning ET7 as its next release. Additionally, Nio is now partnering with Nvidia (NASDAQ:NVDA) for EV and autonomous driving technologies.
Like Tesla, who knows if the stock price can keep charging higher. But if it doesn’t, it won’t be for a lack of new products.
DraftKings continues to gain momentum in the sports-betting world, but does it really have new products coming to market like other tech stocks?
Obviously the company is always looking to adapt. For instance, when the pandemic hit and sporting events dried up, DraftKings pivoted to e-gaming and shifted its bets to a different market.
While this doesn’t completely absorb the absence of traditional sports, it did help soften the blow. But beyond its product innovations and casino games, DraftKings isn’t looking at new products as much as it’s looking at new markets.
Sports gambling is not legal in every state. In fact, it’s only legal in a handful of states. Even as more states are legalizing sports betting, not all of them have gotten to legalizing mobile sports betting. In time, it will come.
Texas is talking about it. New York is working on it. It’s only a matter of time before Florida and California fully join the party. When that happens, DraftKings will be in an enviable spot.
Even just recently, it added Michigan, Virginia and Tennessee, which have populations of ~10 million, 8.5 million, and 6.8 million, respectively. Those are the 10th, 12th and 16th largest states in the U.S. by population.
DraftKings should have solid growth in the years to come as more and more states join in. The gush of additional tax revenue will likely be main catalyst.
It wasn’t long ago that investors wanted nothing to do with Peloton. When it came public, many viewed it as an overvalued workout equipment company. Then the whole holiday ad debacle took place. Things weren’t going well.
All it took was a global pandemic to create a surge for the company’s products. All of a sudden, investors couldn’t get enough of Peloton stock — it was one of the top tech stocks to own.
Obviously a fresh pandemic is likely out of the picture for Peloton, but it may not matter. The company now has various bike and treadmill products, while also selling a whole host of high-priced accessories.
Add to it the continual increase in classes and its subscription revenue should remain strong. Let’s not forget, this is where the stock gets its valuation, too.
On the date of publication, Bret Kenwell held a long position in NVDA and DKNG.