3 Tantalizing Tech Stocks to Add to Your Must-Buy List

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  • Here are three tantalizing tech stocks to add to your must-buy list.
  • PayPal (PYPL): The online payments firm just reported strong Q1 financial results. 
  • SoFi Technologies (SOFI): This fintech company looks like a buy-the-dip candidate. 
  • Block (SQ): Crypto bulls should consider this company, which is all-in on digital assets. 
tech stocks to buy - 3 Tantalizing Tech Stocks to Add to Your Must-Buy List

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Beyond artificial intelligence (AI), there are plenty of interesting things happening in technology. From video games and streaming to financial technology and cybersecurity, there’s lots of exciting change taking place in just about every corner of tech. Now is a great opportunity for investors to buy technology stocks with first-quarter earnings season in full-swing. While some companies are redeeming themselves with their Q1 prints, others are seeing their stock prices fall, opening up buying opportunities.

Add in the market volatility caused by fears of stagflation and higher for longer interest rates, and now is a great time to update one’s buy list with tech stocks that are available at bargain prices that could prove to be long-term winners in a portfolio. Keep in mind that tech stocks continue to lead the market higher, with the Nasdaq composite index up nearly 30% in the last 12 months compared to a 20% gain in the benchmark S&P 500 index. Here are three tantalizing tech stocks to add to your must-buy list.

PayPal (PYPL)

Paypal logo next to Bitcoin logo

PayPal (NASDAQ:PYPL) suddenly looks interesting again. The financial technology company has announced a 27% increase in its first-quarter profit as it reports financial results under a new structure that includes stock-based compensation. Under the new structure, PayPal reported Q1 earnings per share (EPS) of $1.08. Revenue in Q1 rose 9% to $7.7 billion. The new reporting standard makes it difficult to compare PayPal’s results to analyst estimates that were made using the old accounting model.

PayPal’s financial results now include stock-based compensation and employer-related payroll taxes to help bolster transparency. The company’s online payment volumes rose 14% to $403.9 billion in Q1. In terms of guidance, PayPal said that it expects revenue to rise by 6.5% for all of this year and earnings per share to increase by a high-single-digit percentage. New CEO Alex Chriss took over the top job at PayPal last September and is executing a turnaround strategy that appears to be working.

PYPL stock is now up 11% on the year.

SoFi Technologies (SOFI)

SoFi Technologies, Inc logo with stock market chart background. is an American online personal finance company and online bank.
Source: Poetra.RH / Shutterstock.com

SoFi Technologies (NASDAQ:SOFI), another financial technology firm, looks like a buy-the-dip candidate after its Q1 results. The company, known for its online loans, just announced its second consecutive quarter of profitability. Unfortunately, the company’s guidance came in weaker-than-expected, sending SOFI stock down 4% as a result. For Q1, SoFi reported EPS of two cents, beating Wall Street forecasts of one cent. Revenue came in at $580.65 million, which topped analysts’ estimates of $555 million.

Additionally, revenue in the company’s financial services and technology platform rose 54% in Q1, while revenue generated from the lending side of the business was flat year over year. The lending business has been harmed by, among other things, student loan forgiveness by the Biden administration. SoFi operates in three business segments: lending, which includes student, personal, and home loans; financial services; and a technology platform. Loans are by far its biggest business.

Looking ahead, SoFi said that for the current second quarter, it expects to report revenue of $555 million to $565 million. The Q2 guidance is less than the $581 million that analysts had estimated for the company. SOFI stock has dropped about 10% since the Q1 print. However, the company’s share price is still up 24% over the past 12 months.

Block (SQ)

Square, Inc. changes name to Block (SQ). Smartphone with Block logo on screen in hand on background of stock market chart.
Source: Sergei Elagin / Shutterstock.com

Sticking with the fintech theme, we also have Block (NYSE:SQ). The company formerly known as “Square,” continues to generate most of its revenue and profits from its popular Cash App that is used as a payment mechanism by merchants. However, Block continues to push hard into cryptocurrencies, most recently announcing that it is developing its own Bitcoin (BTC-USD) mining system. On social media, the company said it has created a Bitcoin mining chip and is in the process of having it built by a semiconductor foundry.

Block also unveiled plans to broaden out the scope of its Bitcoin mining project to include system design. Management has said that the end goal is for Block to operate its own internal Bitcoin mining system, which is the process of creating new Bitcoins by solving complex computational and mathematical problems. News of Block’s push into crypto mining came days after the most recent Bitcoin halving event that cut the issuance of new BTC by 50%. Block is a major holder of Bitcoin, having purchased more than 8,000 of the largest crypto.

SQ stock has gained 21% in the last 12 months, including a 2% increase so far in 2024.

On the date of publication, Joel Baglole 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.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


Article printed from InvestorPlace Media, https://investorplace.com/2024/05/3-tantalizing-tech-stocks-to-add-to-your-must-buy-list/.

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