With Nvidia (NASDAQ:NVDA) skyrocketing to blistering heights in 2023, the question on everyone’s mind now is as follows: what will be the hottest tech stocks in 2024? At the start of the new year, it’s worth carefully examining this inquiry. After all, we have favorable circumstances moving in the bulls’ direction.
As a broader point, the economy last year avoided the much-dreaded recession bullet. Along with that, the Federal Reserve saw encouraging disinflationary trends. Indeed, the data was apparently so enticing that Fed Chair Jerome Powell hinted at possible interest rate cuts in 2024. If so, that would likely undergird hot tech stocks.
More to the point, the technology machinery appears to be running flat out on all cylinders. As a result, semiconductor specialist Nvidia enjoyed dramatic upside. But it’s also possible that investors will be rotating their portfolio to seek out the next big hit.
If that’s you, below are intriguing ideas to consider for hottest tech stocks.
IBM (IBM)
A legacy tech giant, IBM (NYSE:IBM) used to be the talk of the town when the baby boomers dominated the market. Now, Big Blue has given way to other hipper ideas for hottest tech stocks. Still, I believe this old dog can learn new tricks. It’s been on the move in the past half-year period. And analysts rate shares a consensus moderate buy, with the high-side price target reaching $179.
Primarily, what makes IBM an intriguing idea for hot tech stocks centers on its specialty in machine learning. Basically, ML is a component of artificial intelligence, fostering algorithms techniques for machines to learn from data. According to Statista, the ML market size will likely hit $204.3 billion by the end of this year. Further, the sector volume could land at $528.1 billion by 2030.
As an investment idea, I understand that IBM doesn’t get the juices flowing. However, investors should note that shares trade at a lowly forward earnings multiple of 16.22X. Also, its forward dividend yield stands at 4.1%, which is very generous for one of the hottest tech stocks.
Microsoft (MSFT)
An everywhere, everything idea within the vast innovation ecosystem, Microsoft (NASDAQ:MSFT) offers a sensible idea for hot tech stocks. No, it’s not exciting. However, it more than held its own in 2023, beating out the performance of the Nasdaq Composite index. Analysts believe the solid run will continue this year, pegging shares a consensus strong buy. Also, the average price target lands at $424.36.
For me, MSFT is appealing because it has its hands on several innovative fields. However, if I had to pick one, it would be its aggressive investments in AI, particularly generative AI. According to Fortune Business Insights, the global generative AI market size reached a valuation of $29 billion in 2022.
Further, the segment could expand at a compound annual growth rate (CAGR) of 47.5% to 2030. At the forecast culmination, the segment could be worth nearly $668 billion. And that’s not including other compelling business units such as Azure and its Office Software as a Service (SaaS) platform.
Finally, MSFT isn’t exactly traded at a discount. However, it enjoys solid long-term revenue growth and consistent profitability. Thus, it’s one of the hot tech stocks to consider.
Leidos (LDOS)
Formerly known as Science Applications International Corporation, Leidos (NYSE:LDOS) has its hands in several relevant businesses, including defense, aviation, information technology and biomedical research. Thus, it’s one of the great investments to consider for the long haul. However, it does have the advantage of being one of the hottest tech stocks. Analysts rate shares a strong buy with a $121.83 average price target.
Fundamentally, Leidos draws attention for its cybersecurity business. Per its website, the company is recognized as a sector leader across the federal government. Further, at the end of this year, the global cybersecurity market could print revenue of $183.1 billion. Plus, experts project that the sector will expand at a CAGR of 10.56%. If so, we’re talking a market volume of $273.6 billion by 2028.
Finally, Leidos makes an enticing case for hot tech stocks to buy because of its attractive valuation. Currently, the market prices at LDOS at a forward earnings multiple of 14.11X, lower than the sector median 23.8X. Given the upward growth trajectory of cybersecurity along with its other relevancies, the discount appears credible.
Meta Platforms (META)
Formerly known as Facebook, Meta Platforms (NASDAQ:META) inherently draws attention for its massive social network. Cynically, META ranks among the hottest tech stocks thanks to leveraging a veritable data goldmine. However, the company has also transitioned to several innovative arenas. It performed quite well last year and analysts remain enthused, pegging shares a consensus strong buy. Also, the average price target lands at $391.57.
One of the compelling focus areas for Meta has been its investment in the metaverse. Now, I’m not going to say that I’m a huge fan of the concept. Nevertheless, the underlying virtual reality market should be huge. According to Mordor Intelligence, the VR market size reached a valuation of $54.24 billion last year. Further, the segment should expand at a CAGR of 24.74%, ultimately reaching $163.82 billion by 2028.
To be sure, with META marching toward the 200% up mark (it fell a bit short) in 2023, you’re not going to get a discount here. However, the company maintains a strong long-term revenue growth rate while staying consistently profitable. Thus, it’s a solid idea for hot tech stocks.
Canaan (CAN)
Moving into the extremely speculative segment of the hottest tech stocks, investors that are willing to throw caution to the wind should take a look at Canaan (NASDAQ:CAN). As a specialist in blockchain mining hardware, CAN might be appealing to those who want to participate broadly in the cryptocurrency sector but don’t actually want to directly take the risk. Analysts rate shares a moderate buy with a $4.25 average price target.
Obviously, the narrative for Canaan revolves around how well cryptos perform in 2024. If the sector continues to build upon what materialized near the end of last year, CAN may fly higher. What makes the idea more tempting is that its market performance wasn’t really that impressive compared to its blockchain-mining peers. However, a once-ignored opportunity could easily transition to a blistering outperformer in the crypto paradigm.
Still, caution is key. For example, it’s true that Canaan enjoys a three-year revenue growth rate of 37.6%, which is outstanding. Still, the problem is that the mining equipment specialist’s fortunes are heavily tied to crypto sentiment. So, just be careful how much exposure you have.
D-Wave Quantum (QBTS)
As the name suggests, D-Wave Quantum (NYSE:QBTS) specializes in quantum computing. Per its public profile, D-Wave claims to be the world’s first company to sell computers that exploit quantum effects in their operations. It’s been incredibly choppy over the past 52 weeks. Nevertheless, analysts appreciate the opportunity, pegging shares a unanimous strong buy. Also, the average price target clocks in at $2.17.
In a nutshell, classical computers – no matter how fast they are – operate in a binary linearism. In order for a set of problems to be solved, the initial challenge must be addressed before the next obstacle can be engaged. Think about unlocking a lock by entering every possible combination. It would take a while. On the other hand, quantum computers can run multiple problem sets simultaneously due to the underlying weird nature of quantum mechanics.
Here’s the bottom line. According to BCC Research, the sector may grow from $904.7 million last year to $6.5 billion by 2028. That would be a CAGR of 48.1%, which is astonishing. However, the risk is that QBTS trades for 12.62X trailing revenue, which is screaming high.
Asensus Surgical (ASXC)
A literal penny stock, you want to be supremely cautious with Asensus Surgical (NYSEAMERICAN:ASXC). Frankly, I’m hesitant to even naming this idea for the hottest tech stocks available. As you can see from its 52-week chart, ASXC is volatile as fudge, as the kids like to say. Still, the underlying surgical robotics specialty draws much interest. Analysts are split with a moderate buy rating. The average price target stands at $1.50, which is intense.
According to Grand View Research, the global surgical robots market size reached a valuation of $3.92 billion last year. Experts project that the sector may expand at a CAGR of 9.5% from 2024 to 2030. At the forecast culmination, the industry may generate annual revenue of $7.42 billion. For ASXC, the idea is to get a piece of the pie. With a market capitalization of less than $100 million, it may not need to grab much for shares to skyrocket.
Frankly, whether it will or not requires a whole lot of faith. We’re talking the kind that led to Indiana Jones taking a step in that deep chasm, hoping that his foot would land on an invisible bridge. Shares trade at 13.84X trailing revenue so you really need to think about this one carefully before diving in.
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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.
