SPECIAL REPORT The Top 7 Stocks for 2024

Undervalued Tech Stocks: 3 Value Opportunities You Don’t Want to Miss

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  • The U.S. tech sector’s 28% growth highlights these undervalued tech stocks as smart buys amid technological evolution.
  • Luminar Technologies (LAZR): Its innovative LiDAR tech marks it as a future-centric investment.
  • Adobe Incorporated (ADBE): It has gained a stronghold in the booming $2357.31 billion software market.
  • Lam Research (LRCX): LRCX’s influential presence in semiconductor innovation promises substantial long-term value.
undervalued tech stocks - Undervalued Tech Stocks: 3 Value Opportunities You Don’t Want to Miss

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The technology sector is critical to the U.S. economy, driving significant gains in the stock market. Despite this, certain undervalued tech stocks have not yet realized their full potential. According to the United States Technology Sector Analysis, the industry has witnessed an impressive 31% growth in the last year alone, with an anticipated annual earnings increase of 17%.

However, the investment landscape is diverse. While some stocks, particularly those related to artificial intelligence, have seen their values skyrocket, others have lagged. Segments, including wireless internet, personal computers, and e-commerce, haven’t experienced the same bullish momentum of late. This discrepancy has left certain tech stocks undervalued, creating potential opportunities for astute investors.

Moreover, investing in these undervalued tech stocks now could lead to substantial returns as market conditions evolve. This is especially true with the Federal Reserve’s recent indications of tapering rate hikes, easing inflation concerns. In this light, let’s explore three undervalued tech stocks worth your consideration right now.

Luminar Technologies (LAZR)

Luminar (LAZR stock) sign with greenery around it
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Luminar Technologies (NASDAQ:LAZR) is a standout player in the autonomous vehicle industry, primarily due to its innovative LiDAR solutions. The market for vehicle autonomy and safety continues its rapid expansion. With projections pointing toward a staggering $150 billion valuation by 2030, LAZR’s position in the industry underscores substantial growth prospects.

Moreover, Luminar showcases a robust financial performance in the recent quarter, with revenues climbing to $16.20 million, a 63.08% increase year over year (YOY). Impressively, its forward revenue growth estimates are at a stellar 97%, eclipsing the sector median of 6.5 by an astonishing 1,552%.

Furthermore, Luminar’s commitment to evolving LiDAR solutions is noteworthy. Its recent collaboration with Plus, a leader in self-driving technology, marks a strategic step. Luminar is set to become the exclusive long-range LiDAR provider for PlusDrive, enhancing safety systems for commercial vehicles. This partnership is pivotal, promising innovative advancements in automated driving systems.

Considering these dynamic collaborations and strides in the cutting-edge LiDAR market, Luminar positions itself as a prudent consideration in tech stocks.

Adobe Incorporated (ADBE)

A white and blue building with the Adobe logo is pictured in front of a blue sky
Source: JHVEPhoto / Shutterstock

Adobe Incorporated (NASDAQ:ADBE) is well-known for its multimedia and creative software, a must-have for professionals in design and editing. The stock has climbed 60.5% year to date (YTD) to $540.96, with TipRanks analysts recommending a moderate buy, forecasting an 12% upside.

Additionally, the global software market is expanding. From $1333.48 billion in 2022 to an anticipated $2357.31 billion by 2027, Adobe’s positioning is desirable.

Recently, Adobe marked a revenue surge to $4.89 billion, reflecting a 10.4% YOY ascent. And, its working capital growth soared 97.53% YOY, vastly outperforming the sector median by 7,354.41%. Furthermore, Adobe’s levered FCF margin grew to 23.16%, exceeding the sector median by a substantial 123%. This performance highlights the company’s robust financial health and operational efficiency.

Also, Adobe maintains its edge through constant innovation, recently integrating AI to enhance user experience. This strategic move, aiming to attract and retain users, positions Adobe for long-term expansion ahead.

Lam Research (LRCX)

Lam Research sign and logo at semiconductor company Lam Research Corporation headquarters in Silicon Valley. LRCX Stock
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Lam Research (NASDAQ:LRCX), a pivotal force in semiconductor innovation, stands at the forefront of chip technology crucial for modern electronics.

Amid soaring demand for advanced chips, they’re not just participants but trailblazers in this tech surge. Its unique collaborations with giants like IIT and FRC not only underscore its prestige but also justify the premium on its cutting-edge products.

In the recent quarter, Lam Research posted impressive figures, with revenue reaching $3.48 billion and net income hitting a jaw-dropping $887 million. This was in addition to a healthy levered free cash flow (FCF) margin of 22.57%. These positive financial indicators highlight the company’s profitability and promise for sustained success. Even amid inflation, the company’s focus on advancements, like the ALTUS Product Family, underscores its commitment to continual improvement and consumer relevance.

Despite its strengths and forward-looking approach, LRCX remains undervalued in the market, presenting an attractive opportunity for long-term investors. Its dedication to innovation and expansion into new markets make it a compelling consideration for investment portfolios.

On the date of publication, Muslim 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.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


Article printed from InvestorPlace Media, https://investorplace.com/2023/10/undervalued-tech-stocks-3-value-opportunities-you-dont-want-to-miss/.

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