With former President Donald Trump picking Senator J.D. Vance of Ohio as his running mate, the electoral race is set for a compelling showdown. Therefore, it might make sense to prep one’s portfolio in anticipation of a second term under “The Donald.” And that brings us to smaller tech stocks that these conservatives may favor.
To be 100% clear, I’m not entirely sure what small equities the former real estate mogul would want to support. I think it’s safe to say, though, Trump’s opinions will matter more than Vance’s, a former “never Trump” Republican.
That said, we’ve got to read between the lines for some of the remarks Trump has made on the campaign trail to suss out his political agenda. To the best of my ability, these are the smaller tech stocks to buy under a Trump-Vance ticket.
Inseego (INSG)
Inseego (NASDAQ:INSG) just might be one of the smaller tech stocks that might thrive under Trump’s leadership. In the past, Trump has discussed expanding 5G deployment. And that’s what Inseego specializes in, providing mobile and Internet-of-Things (IoT) solutions, including 5G and LTE wireless modems, routers and gateways. It’s also diminutive, carrying a market capitalization of less than $118 million.
One factor that could help make the case for INSG stock is the valuation. Right now, shares trade for approximately 0.6X trailing-year sales. That’s much lower than the industry median of 1.55x. To be fair, it’s not the greatest relative deal. Between the first quarter of 2023 to Q1 2024, the sales multiple sat at 0.21x.
Nevertheless, analysts also believe that by year’s end, Inseego can post revenue of $203.75 million. If so, that would imply a growth rate of 4.1%. Further, the high-side estimate calls for sales of $211.65 million. Next year sees consensus at $209.93 million, with an optimistic view of $215.7 million. It could be a sensible play, at least compared to its micro-cap peers.
Vuzix (VUZI)
As a leading developer of augment reality (AR) and virtual reality (VR) technologies, Vuzix (NASDAQ:VUZI) is already one of the most popular ideas among smaller tech stocks. Thanks to the company’s ability to serve multiple industries and client sizes from enterprise to consumer markets, VUZI potentially stands as a relevant mover. In a bid to improve America’s competitiveness, Trump’s policies might favor Vuzix.
Frankly, this one is more of a stretch play in terms of political tailwinds. However, this could be an interesting play for speculators. Right now, shares trade hands at 8.47x trailing-year revenue. In the past year, the metric stood at 15.27x. That doesn’t guarantee anything but if Vuzix finds its mojo – perhaps from a Trump White House favoring U.S. companies – then it’s possible that shares can rise to their prior valuation.
However, the company must impress investors and that’s where the situation gets murky. For fiscal 2024, analysts believe that sales may land at $11.61 million. That’s down 4.3%. Further, in fiscal 2025, sales might slip to $10.8 million.
Still, the most optimistic expert sees revenue reaching $13.73 million in 2024. It’s possible, but it’s also risky.
Desktop Metal (DM)
Arguably the riskiest idea on this list of smaller tech stocks, Desktop Metal (NYSE:DM) specializes in 3D printing. It offers solutions for both quick prototyping services and mass production. Better yet, it falls under the industrial additive manufacturing sector. That’s important to establish. We’re not talking about homemade arts and crafts (although there’s nothing wrong with that segment).
Now, I can’t say that I’ve heard Trump talk about additive manufacturing specifically. However, he has talked plenty about manufacturing in general. With his pro-USA stance, I imagine that the Burlington, MA-based enterprise should enjoy a tailwind. Further, DM stock could be a good deal. Right now, shares trade at 0.92x trailing-year sales. In the past year, this metric stood at 2.24x.
Admittedly, analysts see a rough year in fiscal 2024, with sales projected to slip to $186.03 million. That would be down almost 2%. However, a sizable recovery could take place in the following year, with revenue up to $207.8 million. That would be a lift of 11.7%, making DM one of the smaller tech stocks to consider.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
