When looking at the broader innovation space, it’s the usual suspects that helped drive sentiment forward, which may provide an “air bubble” opportunity for under-the-radar tech stocks. Basically, with so much attention paid to a select few enterprises, investors can pivot toward the path less traveled.
From a pure commons sense perspective, targeting hidden gem tech stocks may benefit from the natural ebb and flow of the capital markets. As wonderful as an entity like Nvidia (NASDAQ:NVDA), too much baked-in speculation without a corrective phase is not positive. It’s akin to always eating but not letting out the material not needed.
Against a fundamental backdrop, if the economy falls into recession – a non-zero-probability event – the corporations that have enjoyed excessive speculation may see their market value unwind severely. On the other hand, you might be able to mitigate downside damage with lesser-known tech stocks to watch.
No matter what, the equities sector carries risks. In addition, going off-piste carries with it its own distinct dangers. Still, if you’re looking for fresh ideas, these under-the-radar tech stocks could be your ticket.
An open online course provider, Coursera (NYSE:COUR) may very well change the game of higher education. While arguably most people desire to learn more and get a leg up on the competitive job market, not everyone has the means to go to a traditional four-year university. With the proliferation of online courses, this educational technology (edtech) sector could blossom in the years to come.
Indeed, investors recognize the long-term potential. Yes, COUR has been disappointing since making its public market debut. However, circumstances may be turning around, with shares swinging up into robust double-digit-percentage returns since the start of the year. To be fair, that might put off some investors worried about holding the bag.
Still, Coursera deserves a look for under-the-radar tech stocks. Aside from the print in the price charts, the company continues to expand the top line. In the third quarter, revenue clocked in at $165.5 million, up over 21% against the prior year’s tally. Analysts rate COUR a moderate buy with a $22.31 average price target. The high-side target lands at $30.
Kyndryl Holdings (KD)
A multinational information technology (IT) infrastructure services provider, Kyndryl Holdings (NYSE:KD) specializes in designing, building, managing and developing large-scale information systems. Per its public profile, Kyndryl represents the world’s largest IT infrastructure services provider. From that context, KD might not seem a natural idea for under-the-radar tech stocks.
Another factor that will raise eyebrows is its performance. Since the beginning of this year, KD skyrocketed to strong double-digit returns. And much of that incredible print came within recent sessions. Created as a spinoff of IBM (NYSE:IBM), Kyndryl enjoys a grand pedigree. However, since becoming its own publicly traded entity, the long-term performance of KD has been disappointing.
Still, it belongs on your radar of hidden gem tech stocks because of options trading dynamics. If you look at KD’s options flow data, you’ll notice big block trades involving both sold calls and bought puts. However, contrarian bulls appear to be advantaging the bears’ open liability, particularly with the sold calls. Why not take advantage? Analysts peg KD a moderate buy with a $21.33 price target.
Zebra Technologies (ZBRA)
A U.S.-based mobile computing company, Zebra Technologies (NASDAQ:ZBRA) specializes in innovations used to sense, analyze and act in real time, a process often called smart data capture. Here’s what you need to know. According to Grand View Research, the global automatic identification and data capture market reached a valuation of $54.58 billion last year. So, Zebra enjoys a massive total addressable market.
It gets better. Industry experts project that by 2030, the company’s revenue will land at $138.86 billion. If so, we’re talking about a compound annual growth rate (CAGR) of 12% from this year to the forecasted period. Given that Zebra features a market capitalization of roughly $11 billion, speculators could enjoy massive upside. That’s why it deserves consideration for under-the-radar tech stocks.
To be fair, Zebra suffered a rough Q3 earnings print, which saw revenue decline almost 31% year-over-year to $956 million. Still, given the importance of the underlying industry, ZBRA could get interesting. Analysts believe it’s one of the tech stocks to watch, rating it a moderate buy with a $261.60 price target.
Based in Irvine, California, Lantronix (NASDAQ:LTRX) is a global provider of hardware and software solutions for the Internet of Things (IoT) and device management. Per its website, Lantronix’s innovative products and solutions help its enterprise-level clients generate new revenue streams, improve productivity and lift the bottom line. Although incurring choppy trading this year, it’s up noticeably, especially within recent sessions.
Now, over the past five years, LTRX is up but rather modestly, given the nature of the business and the extended timeline. However, those who are wiling to ride with the waves should flag Lantronix as one of the under-the-radar tech stocks. Per Grand View Research, the global IoT device management market size reached a valuation of $1.88 billion in 2022.
Not only that, industry insiders project that by 2030, the sector should ring up revenue of $19.77 billion. That’s an exceptional opportunity for Lantronix given its micro-capitalization profile. To be sure, it’s risky but the company continues to steadily grow its top line.
Analysts also view LTRX as a unanimous strong buy with a $9.63 average price target.
Another edtech outfit, Nerdy (NYSE:NRDY) bills itself as the leading curated platform for live online learning. Its flagship product is called Varsity Tutors, a platform that offers a personalized and convenience pathway for effective learning. On a fundamental level, with American students performing worse than many other developed nations in international tests, Nerdy offers a much-needed critical solution.
Turning to Grand View Research again, the global online tutoring services market reached a valuation of $7.69 billion last year. For Nerdy, capturing a piece of the pie could yield a disproportionately positive impact. After all, the enterprise presently ranks among small-cap businesses. Even more enticing, edtech experts project that this subsegment could hit $23.73 billion by 2030, a CAGR of 14.9% from this year.
For full disclosure, NRDY suffers significant issues. For example, shares plunged badly in the trailing month. However, for patient investors, NRDY could be one of the under-the-radar tech stocks to consider. Also, helping matters is that analysts rate NRDY a strong buy with a $4.93 average price target.
Aehr Test Systems (AEHR)
Headquartered in Fremont, California, Aehr Test Systems (NASDAQ:AEHR) is a global provider of test systems for burning-in and testing logic, optical and memory integrated circuits (ICs). Per its website, Aehr has over 2,500 systems installed worldwide. Further, the company notes that increased quality and reliability needs of automotive and mobility IC markets have bolstered test requirements.
In other words, AEHR may come off as a boring enterprise. Nevertheless, it’s clearly one of the hidden gem tech stocks to consider. According to Growth Market Reports, the global in-circuit testing market size reached a valuation of $1.12 billion in 2022. However, by 2031, experts project that the sector could hit $1.75 billion, a CAGR of 5.1%.
Now, that sounds like a small CAGR. Here’s the thing. First, Aehr is a sub-billion small-cap enterprise. Second, testing represents a necessity given the demands of the broader semiconductor industry. Thus, I believe AEHR is one of the tech stocks to watch.
Craig-Hallum’s Christian Schwab agrees, pegging it a “buy” with a $60 price target.
Yet another U.S.-based edtech specialist, Skillsoft (NYSE:SKIL) produces learning management systems software and content. Per its website, the company focuses on employee development, which might not immediately seem relevant. After all, companies have been planning and issuing mass layoffs as pressures build from the tough consumer economy. Sure enough, SKIL suffered steep losses since the beginning of this year.
Nevertheless, on a cynical basis, companies will need to do more with less. On the other end of the aisle, worker bees will probably be more agreeable to such training. During a rough economic cycle, that’s not the time to stick your head out. Finally, both employers and employees will be on the same page: the latter wants to stay in business while the former wants a job to go to.
To be sure, Skillsoft suffers from major headwinds; otherwise, SKIL wouldn’t lose so much in the market. Financially, growth contraction presents another major challenge. Still, analysts believe that SKIL could be one of the under-the-radar tech stocks, rating it a strong buy with a $54.33 price target.
On the date of publication, Josh Enomoto 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.