Tech has been by far the fastest-growing industry in the last two decades, with tech stocks driving a lot of the hype and enthusiasm in the stock market. For years now, tech has been the primary engine behind the broader market’s gains. Not only are the major tech giants continuing their relentless expansion, but we are also seeing spillover effects as technological innovations supercharge other industries. Fields like healthcare, manufacturing, and transportation are being reshaped by advancements in artificial intelligence, robotics, the Internet of Things, and more.

With so much transformative change underway, I believe now is an opportune time to invest in some of the lesser-known tech stocks before they capture Wall Street’s attention. The tech industry is creating new companies and opportunities faster than ever before. While the spotlight shines brightly on Big Tech, there are plenty of up-and-coming tech firms still flying under the radar. These stocks remain unknown to most investors, overlooked and undervalued. However, they have massive growth potential ahead if management can execute effectively and capitalize on the huge market opportunities. Here are seven such tech stocks:

Tech Stocks: X-FAB Silicon Foundries (XFABF)

X-FAB Silicon Foundries (OTCMKTS:XFABF) is a leading foundry group for analog/mixed-signal semiconductor applications. It specializes in producing and selling analog/mixed-signal IC, micro-electro-mechanical systems, and silicon carbide products for automotive, medical, industrial, communication, and consumer sectors worldwide. The company also offers design support for electronic design automation platforms. Despite the booming semiconductor industry, XFABF stock hasn’t fared well recently. The stock is down 42% from its peak in August 2023, mostly due to the slowdown in the automotive industry, which forms core demand. As people make fewer big purchases amid high interest rates, automotive chip demand has declined significantly.

However, I believe the current entry point could lead to explosive returns, as we are likely at a cyclical low. A turnaround after rates eventually come down could send the stock much higher. The valuation here looks very cheap compared to growth, trading at just 6 times earnings. The 3-year revenue growth rate is 28.4%, better than 84% of semiconductor peers. Future 3 to 5-year annual revenue growth is 19%, topping 92% of semiconductor companies. Gurufocus puts XFABF’s fair value at $24.4 by the end of 2027. I see the stars aligning for a major rebound.

DroneShield Limited (DRSHF)

DroneShield Limited (OTCMKTS:DRSHF) has been having explosive growth in recent months, up 343% in the past six months. It’s easy to see why when examining what this innovative company does. DroneShield engages in developing, commercializing, and selling hardware and software tech for drone detection and security. With tensions heating up and drones likely being the future of warfare, DroneShield has huge potential as a pure-play in the sector. Valuations could quickly swell as it continues landing more government contracts. Quintupling from current levels seems plausible if growth persists.

Its 90%+ 3-year revenue growth rate bests 99% of peers, and I expect rapid expansion to continue as DroneShield secures more defense contracts. This is a cutting-edge company operating in a crucial growth industry. While it has already made big moves, more upside lies ahead as drone tech becomes increasingly critical for governments worldwide. DroneShield finds itself in the right place at the right time to capitalize.

Tech Stocks: Nagarro (NGRRF)

Nagarro (OTCMKTS:NGRRF) is a digital engineering company offering services including AI and data analytics – some of the hottest sectors currently. Unfortunately, I can’t say the same for the stock. NGRRF is down almost 70% from its peak and sliding lower. However, I foresee the company stabilizing and recovering in the coming months as double-digit revenue growth resumes. Revenue is projected to grow from $1.1 billion in 2024 to $3 billion in 2033 – modest for a tech stock but with a compelling valuation.

Trading at 18 times earnings, I’m banking on margin expansion from the current 5.7% net margin as economic conditions improve and EPS expands. Once Nagarro starts executing again, we could see huge upside. It also has an attractive 2.83% forward dividend yield while you wait. This overlooked stock could bounce back in a big way once tech recovers. With its digital engineering expertise spanning AI and analytics, Nagarro is well-positioned for the future. It currently trades at $73, but Gurufocus sees a fair price value of $347 by the end of 2027.

Aehr Test Systems (AEHR)

I have said before that the automotive industry was facing a lot of problems due to rate hikes and the ensuing slump in demand. This has caused companies that have the automotive sector as a big customer source to slump as well. Aehr Test Systems (NASDAQ:AEHR) is one such company. Aehr Test Systems is a global provider of test systems for burning-in and testing logic, optical, and memory integrated circuits. They specialize in wafer level, and package part form testing. Their systems are used in various sectors including silicon carbide (SiC), gallium nitride (GaN), and optical photonics. Automotive chips are a core part of the company’s business and the stock has 79% from its peak in Sep. 2023.

That said, I think AEHR can bounce back in the coming quarters as rates increase and automotive chips come in demand again. Regardless, I would warn that this company does not have the most reliable management. Guidance was cut twice in the past two months and we are looking at growth remaining flat next year as well. Thus, near-term bleeding could happen. But if you look at the long term, AEHR is still a bargain. Once rates are cut and EV sales volumes start rising, multibagger returns aren’t out of the question in 24-36 months. It is a profitable company with a 21.4% net margin, so it certainly isn’t going to zero anytime soon.

Tech Stocks: Naspers (NPSNY)

Naspers (OTCMKTS:NPSNY) is a multinational company operating in the consumer internet industry. It holds investments in classifieds, food delivery, payments and fintech, education, health, and e-commerce. This stock’s performance hasn’t been as bad as AEHR, but it has been lackluster. The stock has had many ups and downs over the past few years, but it has been essentially flat since 2017.

However, the core fundamentals have been strengthening, and I believe the market is heavily underpricing the stock. Many other analysts agree with me here. This company is expected to see double-digit sales growth moving forward along with EPS bouncing back by 115% this year and growing 14% next year. Moreover, this company has $20 billion in cash against $16.2 billion in debt. The debt load does cause a lot of pain due to interest payments, but as rates come down, this too should turn into a tailwind.

The company has substantial holding in Tencent Holdings (OTCMKTS:TCEHY) and other publicly listed, mark-to-market non-operating assets which are also expected to bounce back significantly over the coming years. It also yields a modest 0.27% dividend. Gurufocus the fair price at $127 by the end of 2026. Its current price is just $34 and I don’t see much downside risk from here.

Ubiquiti (UI)

Ubiquiti (NYSE:UI) is a technology company that manufactures and sells wireless data communication and wired products for enterprises and homes. Their industry-leading products are unified in an incredible software interface with scalable, license-free cloud management. This is another stock that is down significantly but could soon bottom out and deliver significant gains. There are definitely near-term risks here, but if you are chasing big gains in the long run, the near-term downside risk shouldn’t matter much.

The company has very good margins and profitability metrics, and the dividend yield is at 2.3%. Growth is expected to restart next year, with EPS bouncing back by 26% and revenue growing by 18.5%. This means you’re paying just 13 times the 2025 expected EPS. I believe it can perform much better than analysts expect once the broader telecommunications industry bounces back. Most telecom companies are laden with debt and are busy with interest payments. But once cash frees up post-rate cuts, we should see growth reignite significantly. Gurufocus puts the fair price value for the stock at $309.

Tech Stocks: Xinyi Solar Holdings (XISHY)

Xinyi Solar (OTCMKTS:XISHY) is a photovoltaic glass manufacturer. It specializes in photovoltaic glass production and solar farm development. The company provides photovoltaic glass products to major PV module manufacturers globally. As of December 2023, it had six major photovoltaic glass production bases.

The entire solar sector has been seeing a downturn, but many solar companies are starting to bottom out, and there is a huge growth runway here in the long run. Xinyi has also seen its stock price decline, but I believe it can bottom out and recover soon as its top and bottom lines have continued to grow very fast. Its top line grew almost 30% for all of 2023. Net margin did decline by 15.4%, but with revenue continuing to grow fast, I expect that to bounce back soon.

Analysts expect 26.5% revenue growth this year and 22% growth next year. Paying 11 times earnings seems really cheap as it also has a 4.15% forward dividend yield. Its future 3 to 5-year revenue growth is better than 93% of peers. All it needs right now is a margin recovery.

On the date of publication, Omor Ibne Ehsan did not hold (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.