Investing in tech stocks is a popular choice for many people. But what should you look for when choosing which stocks to invest in?
Some of the most important factors to consider are company growth potential and management. You can determine growth potential by looking at its past growth rates and current market position. That way, you can see if it will continue to grow or if it has reached its peak.
Tech is currently the largest and most valuable industry globally. It is also one of the fastest-growing industries. Some people are worried the high prices of these stocks make them too risky to invest in. They also believe there is a good chance of the prices dropping soon.
Emerging technologies are the new frontier for investors. The world is changing, and so are the ways we do business. New tech companies are popping up every day, and they’re all trying to find their niche in the market.
Investors must be willing to take risks to reap the rewards. You can’t just invest in what you’re familiar with, or what you know will work. You have to be willing to invest in that new company with a fantastic idea, excellent management and robust outlook.
Investing in the stock market is an important decision requiring much research and time. It is also a difficult decision because it can be hard to know which stocks are good investments and which stocks are not. However, these seven stocks are excellent if you want to future proof your portfolio:
- GitLab (NASDAQ:GTLB)
- Toast (NYSE:TOST)
- Udemy (NASDAQ:UDMY)
- Informatica (NYSE:INFA)
- Amplitude (NASDAQ:AMPL)
- Coinbase (NASDAQ:COIN)
- Robinhood (NASDAQ:HOOD)
- Nextdoor (NYSE:KIND)
Tech Stocks: GitLab (GTLB)
GitLab is a platform where software development activities can be streamlined. It has tools for collaboration, testing, continuous integration and deployment. It is an open-source tool with support from Microsoft’s (NASDAQ:MSFT) GitHub, which makes it easier for developers to switch to GitLab if they wish to.
GitHub might still be the most popular git repository, but many other options are out there. GitLab is doing a great job and offers tools similar to GitHub.
GitLab’s initial public offering (IPO) was successful, as it managed to raise $650 million. Investors also bought more than $150 million of additional stock from an affiliated entity with the GitLab CEO, Sid Sijbrandij. But the share price has decreased significantly since then.
GitLab offers a free version of its DevOps platform. Users can greatly reduce the time they use to work on code, package it, release it and monitor its progress. Customers can choose to run it in any cloud environment, their own data center or a hosted service.
After launching about a decade ago, GitLab has been close behind GitHub in the source code repository market, including Atlassian’s (NASDAQ:TEAM) Bitbucket.
Microsoft bought GitHub for $7.5 billion early last year. Since then, GitLab’s popularity has grown rapidly and is now seen as the former company’s greatest competitor. Therefore, among tech stocks, GTLB presents a great opportunity.
When discussing tech stocks, TOST might seem like a curveball. Toast is a cloud-based software company that helps restaurants manage inventory, payments and other aspects of the business. More than 48,000 restaurant locations use the company’s products.
Its point of sale system makes it easy to accept payments for food at your restaurant. Toast also handles online ordering and delivery services for customers.
Restaurants are not the only ones who can benefit from Toast’s offerings. It also provides consulting services for restaurant owners to help them get off on the right foot with their new business ventures or expansion plans.
TOST stock soared 56% in its New York Stock Exchange debut, highlighting the company’s appeal despite starting in a very stressed position. The company sold shares for $40 each and raised about $870 million during its IPO.
Toast’s IPO is good news for a company destroyed by the early days of Covid-19. Although things were bad for a while, Toast is now on the rebound and doing very well.
Revenue for the third quarter of 2021 was $486.4 million, an increase of 105% from last year. The third quarter’s gross profit was $83.3 million, 72% higher than the previous year. It’s expected that in the final quarter, Toast will have revenue of $465 million to $495 million with an adjusted EBITDA loss of about $40 million to $50 million.
With the company’s operations making a comeback, the time to invest is now.
Tech Stocks: Udemy (UDMY)
Udemy is one of the world’s largest online education marketplaces. It offers more than 175,000 courses to 46 million students across the world. Udemy has a business model based on revenue share, which means the company only earns money when students purchase a course.
Many people are turning to online education for various reasons. The most common reason cited is convenience, which can be seen with stay-at-home learners. Students can access classes anytime and anywhere with online education.
The growth in virtual learning is a secular trend. However, it skyrocketed during the pandemic, and with good reason. People were stuck at home and were transitioning between jobs. Therefore, they needed to refresh their skills.
Udemy’s business model is something I appreciate a lot. There is a low entry barrier for anyone who wants to create a course and get it hosted on Udemy. Does that mean that people will find it useful or use it? It would be hard to tell. However, the more content available on Udemy, the more opportunities there are for someone to find what they need.
The majority of people might be looking for accreditation instead of focusing on qualifications. I think that’s because the online platform is bringing in a lot more learners to try it out rather than risk being left behind. That’s why the company’s main competition is Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) YouTube rather than Coursera (NYSE:COUR).
Due to the pandemic, many people found themselves out of a job. As a result, people have been brushing up their skills and enhancing their functionalities. Therefore, Udemy is an excellent pick among tech stocks.
Informatica provides enterprise-level data management & cleansing solutions. It has been in the industry for more than 20 years and have a strong customer base.
Informatica was founded in 1993 by Gaurav Dhillon and Diaz Nesamoney and was one of the earliest data management providers. It’s relied on by some of the most esteemed enterprises in the world due to its early innovations in data management.
However, it hasn’t been all sunshine and roses for the company. Informatica originally went public in 1999 on the Nasdaq, where its ticker symbol is INFA. It then went private in 2015 after a Permira-led group bought it for $5.3 billion.
But due to the rise in the importance of data for enterprise operations, companies with a similar focus started to pop up in these markets. Informatica soon realized it was competing in a space with a high influx of startups. While its tools were still considered a good option, many companies have opted for more budget-friendly solutions and open-source alternatives.
The company has invested more than $1 billion on research and development since 2015. The funds have been used to move its products to the cloud and switch from a license-based model to a subscription-based one. Therefore, Informatica is in a much better position.
Tech Stocks: Amplitude (AMPL)
Amplitude is a data analytics tool that helps businesses optimize their digital marketing efforts. It enables companies to understand the effectiveness of their digital campaigns and provides data-driven insights.
For example, Amplitude can help users understand which marketing channels drive the most conversions and how many leads each campaign generates. With this information, companies can make informed decisions about allocating resources to get the best return on investment (ROI).
Amplitude’s Nasdaq debut was a roaring success. Shares jumped nearly 43% on their first day, giving the developer a valuation of $5 billion.
Optimizing the customer experience is now one of the most important goals of any company. The impact of the pandemic was clear, with businesses looking for ways to transform their services to stay competitive digitally. So, it made sense Amplitude made an amazing debut.
Amplitude’s data analytics tools, customer feedback programs and product research help companies like PayPal Holdings (NASDAQ:PYPL), Peloton Interactive (NASDAQ:PTON) and Comcast’s (NASDAQ:CMCSA) NBCUniversal find insights about their customers.
Crypto is the new investment frontier. The potential for cryptocurrency to change the world is so great that it’s difficult to imagine what the world would be like without them.
There are many ways to invest in crypto, but Coinbase and similar exchanges are the most popular methods. The platform is a reputable exchange and the first step new crypto buyers take. Exchanges give users access to a wide range of coins and tokens, as well as a wallet where they can store coins securely offline or on a computer.
Coinbase’s Nasdaq debut gave the exchange a market cap of $85.8 billion. It did something unusual by listing its stock and allowing employees and existing shareholders to sell shares immediately at market-based prices. Coinbase followed in the footsteps of other tech firms when it pursued a direct listing while standardizing the process for other companies.
Coinbase is a strong option for investors who want to gain exposure to the crypto world. But if you are still on the fence when investing in tokens, COIN is perhaps the most attractive investment.
Tech Stocks: Robinhood (HOOD)
Robinhood is a free stock trading app that doesn’t charge commissions. It has been attracting a lot of millennials who are looking for ways to make money.
The market is changing, and Robinhood can be the next big thing. It is targeting millennials with low-cost investing and commission-free trades.
Many investment analysts lamented that millennials did not take as active a role in the market when you compare them to prior generations. However, Robinhood is changing this equation.
One-third of investors who received Covid-19 stimulus checks from the government invested their money. Out of 18 to 34-year olds, 49% invested in stocks. Of that group, 15% did individual stock investments, 11% opted for cryptocurrency investment, 9% invested in mutual funds and 8% chose exchange-traded funds (ETFs).
With all the social media chatter about investing and the ability to make trades on a mobile app, it’s no surprise some people are using their newfound savings on Robinhood.
Nextdoor is a social media platform that connects people in the same neighborhoods. It’s a great way to find out what’s going on in your community and stay up-to-date with what your neighbors are doing.
According to the company’s data, one in three households in the U.S. are already using Nextdoor. The service is also present in 11 countries and active in more than 275,000 neighborhoods.
Social media is one of the fastest-growing technologies globally. It has changed the way we interact with one another. It has become a gamechanger in many aspects of our lives.
One of the most important impacts of social media is on our mental health. It is time-consuming, and people often turn to it while stuck inside their homes during Covid-19.
Nextdoor addresses these issues. It encourages outside activity by interacting more with the community around you. Therefore, considering its explosive growth, KIND stock is an interesting way to play the social media space.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio. Faizan does not directly own the securities mentioned above.