Although the technology sector remains embattled heading into the fall, the red ink opens opportunities for the best tech stocks to buy in September. To be fair, the narrative for the innovation space presents significant challenges. Glaringly, the Nasdaq Composite shed 26.5% on a year-to-date basis heading into the first full week of September.
In contrast, the benchmark S&P 500 dipped 18% during the same period. Neither indicator brings much joy to investors. However, to the battle-hardened speculator, the best tech stocks to buy bring a magnitude of excitement that’s rarely matched. Primarily, while these companies suffer from market headwinds, over time, their underlying businesses could become extraordinarily relevant.
Moreover, investors seeking maximum growth potential likely won’t find it trading in relatively safe categories. While not every firm tied to innovation stands poised for robust returns, the economy incorporates more digitalization, not less. Therefore, if you have the patience and stomach for volatility, these may be the best tech stocks to buy in September.
Best Tech Stocks: Microsoft (MSFT)
Although this list may appeal to speculators, there are also names here that are relatively conservative and sensible acquisitions. A great example is Microsoft (NASDAQ:MSFT). Armed with a diverse corporate umbrella, Microsoft is ready to take on anything.
With a company this massive, it’s difficult to know where to start. Primarily, Microsoft’s software as a service (SaaS) business stands well above the competition. In the desktop sector, the Microsoft Windows operating system commands nearly 75% market share. Therefore, the business world still runs on Windows, which means access to Microsoft’s SaaS is essential for operations.
As well, the company also has ties to many other relevant segments such as cloud computing via Microsoft Azure. And let’s not forget that the company also symbolizes a video-gaming powerhouse through its Xbox division. Being that it can do it all, MSFT is one of the best tech stocks to buy in September.
Pure Storage (PSTG)
Marketing itself as a provider of uncomplicated storage solutions, Pure Storage (NYSE:PSTG) specializes in developing all-flash data storage hardware and software products. Mainly, the company rose to fame through its data protection solutions. Given that the consequences for incurring data losses could be catastrophic, enterprises are likely willing to fork over top dollar.
According to the University of Texas, “94% of companies suffering from a catastrophic data loss do not survive.” Apparently, its research indicates that “43% never reopen and 51% close within two years.” Further, Home Office Computing Magazine warns that “30% of all businesses that have a major fire go out of business within a year and 70% fail within five years.”
In other words, the modern economy runs on data. Lose your data, lose your business.
Interestingly, Pure Storage represents one of the better-performing names among the best tech stocks to buy in September. While down, PSTG’s losses amount to 7% YTD. As enterprises take stock of what’s most important, Pure Storage could move higher in the long run.
Best Tech Stocks: Lumen Technologies (LUMN)
A versatile player among the best tech stocks to buy in September, Lumen Technologies (NYSE:LUMN) may be worth consideration. Admittedly, LUMN rides a discount – quite a steep one at a loss of over 21% YTD. Further, its near-term trajectory also doesn’t bring much in the way of encouragement, slipping 9% in the trailing month. However, Lumen’s broad reach could yield long-term upside.
According to the company’s website, Lumen powers the fourth industrial revolution. According to Britannica, this term references a series of social, political, cultural and economic upheavals that will unfold over this century. The revolution stems from the deeper integration of technological solutions (such as artificial intelligence) with human-driven enterprises.
Lumen attempts to be an end-to-end solutions provider for this coming framework, offering services in networking, security and edge computing. In addition, the company delivers cloud computing innovations, communications capabilities and platform-related solutions (such as hybrid managed cloud access).
As a bonus, Gurufocus.com rates LUMN as “modestly undervalued.” A key highlight is the company’s forward price-earnings ratio of 10.5 times, significantly lower than the industry median of 10.4x.
Meta Platforms (META)
Earlier this year, Meta Platforms (NASDAQ:META) sounded the alarm on plunging demand for digital advertisements. It wasn’t just an empty musing either. Meta, which owns Facebook, disclosed that it will start reducing hiring and overall expenses.
“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business. It’s always hard to predict how deep or how long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago,” said Meta CEO Mark Zuckerberg.
Still, forward-looking investors who are willing to absorb a choppy ride should target META as one of the best tech stocks to buy this month. For starters, the underlying Facebook ecosystem is massive with nearly 3 billion monthly users. And while social media skews young, Facebook enjoys a relatively broad age distribution, thus speaking to its universal appeal.
Over time, advertisers will appreciate this wide canvas. Finally, for the real speculator, META rates as significantly undervalued due to the sharp losses it took. Therefore, it might rank as one of the best tech stocks to buy for the gambling types.
Best Tech Stocks: Netflix (NFLX)
Once the undisputed toast of Wall Street with its ever-rising subscriber count, Netflix (NASDAQ:NFLX) hit a wall this year. One glance at the chart tells you what an ugly time 2022 has been so far, with NFLX hemorrhaging 62%. Still, for the contrarians out there, Netflix may be one of the best tech stocks to buy in September.
Primarily, a possibility exists that investors have become overly – and unjustifiably – bearish on NFLX stock. While it’s true that the media reported Disney (NYSE:DIS) now commands more total streaming subscriptions than Netflix, the Magic Kingdom generates much lower per-sub revenue.
Netflix may also have the edge in compelling content. While Disney owns the family entertainment segment, Netflix exercises greater willingness to produce grittier, more realistic material.
That’s not to say that Netflix doesn’t have challenges, because it clearly does. However, NFLX’s volatility also makes it a significantly undervalued opportunity.
Straight off the bat, investors should note that Twilio (NYSE:TWLO) is one of the riskiest names among the best tech stocks to buy this month. There’s zero point in hiding this or attempting to put a positive spin on it: TWLO’s market performance is downright awful. Since the January opener, shares have hemorrhaged over 74%.
Fundamentally, Gurufocus.com warns that Twilio may be a value trap. Financially, the company features the classic profile of a growth stock. Revenue for the second quarter of 2022 hit $943 million, representing a 41% lift against the year-ago quarter. However, its net loss amounted to $323 million, expanding unfavorably from $228 million in Q2 2021.
Nevertheless, it could be a compelling idea for long-term speculators because of its authentication platform. According to one research report, the multi-factor authentication market could expand from a projected $12.9 billion in 2022 to $26.7 billion by 2027. This would represent a 15.6% compound annual growth rate (CAGR).
If you think that drones have infiltrated the consumer and commercial markets, you’re not alone. According to Fortune Business Insights, the global commercial drone market reached a valuation of $6.51 billion in 2021. However, experts in the field anticipate that by 2029, the sector will hit a valuation of $47.38 billion. That would be a CAGR of 28.58%.
But then, with so many drones in the air, the question becomes: Who’s protecting these things? As connected digital devices, drones feature similar vulnerabilities to our computers and smartphones. Fortunately, researchers and engineers have thought about this problem. One company that’s on the cutting edge of delivering security solutions for drones and other robotics is Mobilicom (NASDAQ:MOB).
Recently launching its initial public offering, Mobilicom is one of the best tech stocks to buy for speculators due to brewing relevance. As a research paper published in ScienceDirect.com noted, drones have suffered vulnerability to malicious uses. Further, the paper states that the “frequency of such attacks has been significantly increasing and their impact can have devastating effects.”
Should market demand increase, Mobilicom could carve out a viable niche. It’s risky but well worth keeping on your radar.
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.