In the complexities of the market, finding stocks at lower prices that promise both stability and growth can be daunting. However, three tech giants belong in the seriously oversold tech stocks category, amidst the market’s ups and downs. In fact, they offer astute investors a golden opportunity. This article contains the intriguing strategies of these companies, uncovering the specific patterns that make them stand out in the tech crowd.
The first one is a pioneer in customer relationship management. It has not only improved its margins but also embraced artificial intelligence (AI) in a revolutionary way. The second is capitalizing on the global demand for solar energy solutions. It has a focus on international markets and whole-home electrification.
Meanwhile, the third is undergoing a strategic transformation, including a healthcare business spinoff. It is addressing environmental liabilities, all to create a more resilient future. These stocks are compelling for savvy investors looking for opportunities beyond market conditions.
Salesforce (CRM)
Salesforce (NYSE:CRM) has implemented a robust restructuring plan, emphasizing short- and long-term goals. This focus on operational efficiency and profitability has led to significant margin improvement, with a non-GAAP operating margin of 31.6% in Q2, equaling +10% year-over-year (YoY).
Strategically, Salesforce is at the forefront of the AI revolution, and data is critical to AI success. Salesforce’s Data Cloud, which ingested over six trillion records in Q2, is central to the company’s AI strategy, providing customers with a single source for their data. Also, it enables them to unlock the full potential of AI-driven insights and automation.
Salesforce offers a comprehensive product portfolio, including Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud and more. The integration of these products into one metadata-driven platform enhances customer capabilities.
Remarkably, over 90% of Fortune 500 companies rely on Salesforce, often using multiple clouds to streamline their operations. AI and Salesforce’s CRM enable customers to personalize interactions, reduce case resolution times and automate routine tasks. That results in improved customer engagement and operational efficiency, as in examples like Schneider Electric and PenFed Credit Union.
Financially, Salesforce’s industry clouds continue to gain traction, with eight growing at annual recurring revenue rates exceeding 50%. These specialized solutions cater to specific verticals, further solidifying Salesforce’s position as a trusted industry partner.
Additionally, Salesforce’s vast community of trailblazers, experts and partners contribute to its success. Collaboration with AI innovators, such as OpenAI, and investments in ethical AI demonstrate the company’s focus on responsible and cutting-edge technology.
Lastly, Salesforce’s upcoming Dreamforce conference is expected to showcase its latest innovations and AI capabilities. The company may reinforce its bullish outlook in the CRM and AI spaces.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) has a growing international presence and is a significant growth driver. With a revenue mix of 41% from international markets in the most recent quarter, the company is capitalizing on the increasing global demand for solar energy solutions.
Europe and Australia, in particular, have seen remarkable revenue growth. Enphase plans to expand its products in more European countries, including Sweden, Denmark, Greece, the U.K. and Italy. Enphase focuses on emerging markets like Brazil, Mexico, India and Spain. Its IQ8P microinverter positions the company to tap into regions with significant growth potential.
Further, Enphase remains at the forefront of technology with its third-generation IQ Battery P5 launch, which offers improved power and efficiency. Continuous innovation is crucial to maintaining a competitive edge in the renewable energy industry, and Enphase’s focus on research and development sets it on a solid trajectory.
Additionally, Enphase is diligently working on reducing costs across its supply chain. The company aims to maintain healthy margins and competitiveness over the long run by optimizing components, pursuing multi-sourcing strategies and exploring ASIC integration.
Also, Enphase has a high Net Promoter Score (NPS). Logically, satisfied customers are more likely to become repeat buyers and advocates for Enphase’s products, leading to organic growth and market share expansion. Enphase’s efforts in whole-home electrification align with the global transition to cleaner energy sources. The emphasis on supporting home energy management systems, including EV chargers and heat pumps, positions Enphase to cater to the expanding household segment of the energy market.
Lastly, Enphase benefits from government incentives, such as the Investment Tax Credit (ITC) in the U.S. These incentives stimulate demand for solar and energy storage solutions, bolstering Enphase’s top-line potential.
3M (MMM)
3M (NYSE:MMM) can thrive across diverse market segments, which is a key strength. It has witnessed strength in automotive, highway infrastructure and personal safety while addressing healthcare, electronics and consumer retail challenges.
One of 3M’s strategic focuses is restructuring, which has improved operating margins across all business segments by streamlining its supply chain, reducing logistics costs and simplifying its management structure. That includes the transition to a new export model in 24 countries.
Also, 3M’s plan to spin off its healthcare business (with a target of closing the transaction by year-end 2023 or early 2024) is a significant move that can unlock value for shareholders. The company has made substantial progress, including regulatory filings and system updates in preparation for the move. That strategic decision allows 3M to sharpen its focus on core businesses and allocate resources more efficiently.
Furthermore, the recent agreement (a charge of $10.3 billion, payable over 13 years) to resolve public water system claims nationwide in the aqueous film forming foam (AFFF) multi-district litigation is a positive development for 3M. While it involves a substantial payout over 13 years, it provides clarity and certainty regarding future legal liabilities related to per- and polyfluoroalkyl substances (PFAS). 3M was the first company to exit the manufacturing of perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) more than 20 years ago.
Finally, 3M has announced its plan to exit all PFAS manufacturing by the end of 2025. By exiting the manufacturing of certain PFAS compounds and investing in water filtration technology, 3M reduces long-term environmental risks and aligns with the values of socially conscious investors.
As of this writing, Yiannis Zourmpanos held a long position in ENPH and MMM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
