Even amid constant volatility you still hear a lot about the general dominance of tech stocks. But what many don’t tell you is how uneven the run for stocks can actually be.
For instance, did you know that a handful of popular large-cap tech stocks like Apple (NASDAQ:AAPL) account for more than 10% of the S&P 500’s entire value? That means if a company like Apple suffers, then most investors will also suffer a drag on their portfolio … even if they only own broad-based index funds.
If there is ever an argument against index investing, then tech stocks with impressive growth potential are it. Because, while the broader stock market may be choppy, there are a handful of high-flying stocks that can simply knock it out of the park — with or without Apple along for the ride.
In fact, simply by being overweight in some of these tech stocks, you could have doubled or even tripled your gains last year.
So don’t settle for tracking the market when you can ride these high-quality tech stocks to triple-digit gains.
And don’t throw your money away on risky tech startups and IPOs that don’t deliver.
Instead, look for high-potential investments in the tech sector that offer a high likelihood of outperformance in the near term, and a chance of DOUBLING or even TRIPLING your money in the next 12 months. These tech stocks are expected to have strong performance in 2019 and beyond.
Some of these investments are admittedly quite aggressive, of course, so please do all your own research and make sure these trades are part of a well-balanced portfolio. And as always, please don’t hesitate to contact us with your own thoughts and trades at editor@investorplace.com.
Happy trading!
#1 – Alibaba
Buy Below: $208
Fears of a prolonged trade dispute between China and the U.S. have placed Chinese stocks like Alibaba (NYSE:BABA) on a rocky road lately. But despite these short-term concerns, BABAÂ still has plenty going for it heading into 2019.
After all, it’s more than just momentum that matters.
For starters, BABA stock is the main e-commerce player in China, and the Chinese economy remains relatively healthy. Although a barrage of negative press has caused many investors to sour on the region, remember that a slowing growth rate does not mean the end of growth.
Sure, 10% GDP expansion would be better … but given the rest of the world, a 6% clip is pretty darn nice!
This means citizens transitioning to the middle class and entering the online world will help power Alibaba’s growth far into the future. That shows up constantly in the company’s growth rate, which includes a stunning growth forecast of 51.5% revenue expansion in 2019. On top of that, earnings-per-share are also expected to jump almost 30.9% in fiscal 2020!
This is where the numbers get interesting, because that big profit potential and revenue growth has fueled aggressive acquisitions. Alibaba has a very long-term vision and that’s supported by bold investments like its constantly increasing stake in microblogging platform Weibo (NASDAQ:WB) — a Chinese version of Twitter (NYSE:TWTR). Unlike troubled growth metrics at TWTR, Weibo crushed estimates in 2017 and it has excelled in 2018 as well. This provides yet another path to growth for Alibaba.
This also makes now the perfect time to buy BABA stock, since it has a dominant share in the growing e-commerce space and continues to make bold bets on the future.
Shares have roughly doubled in the last year or so, but have since tapered off amid constant trade war headlines. Still, BABA stock could easily experience a massive gain if it gets back on track in 2019. Just make sure to keep an eye on the buy-below price, and enter in on any short-lived dips.
#2 – Atlassian
Buy Below: $96
Atlassian (NASDAQ:TEAM) fits the very blueprint of a dynamic tech stock. Its enterprise collaboration software like Confluence and HipChat are mainstays of companies on the cutting edge of their industry as well as Fortune 500 blue chips. Its growth is phenomenal, with 35% revenue expansion this year and 26.5% expected next year. And on top of all that, it’s already comfortably profitable.
What’s driving this company’s success is simple: Larger and more engaged users continue to tap into its products. And a tight labor market means corporations both big and small are increasingly dependent on productivity tools to get the most out of their businesses.
The Australian company recently hit a record at the beginning of the year before the market got choppy, and posted great fiscal second-quarter earnings that beat expectations — including a 43% revenue jump. However, its most recent earnings report didn’t match its past outperformance.
Still, regardless of the disappointment, TEAM shares have nearly doubled in the last year with momentum firmly at the company’s back. That means any short-term troubles bearing down on Atlassian should be seen as a gigantic buying opportunity in this fast-growing workplace tech stock.
#3 – Applied Materials
Buy Below: $52
Applied Materials (NASDAQ:AMAT) has been a fairly hot stock lately, and although some analysts might think it’s starting to lose steam, there are still plenty of reasons to expect this stock will resume its comeback story in 2019.
Applied Materials is a semiconductor/solar supplies company that got its start more than 50 years ago in 1967. The company is mainly known for providing the services, software and materials needed to produce semiconductor chips for several types of technology related to our everyday business (in a modern context, think smart phones and TVs). As important as this may sound, the company was mainly under-the-radar over the past decade. But starting in 2016, it started to climb higher again.
Investors admired Applied Materials’ strong growth outlook and recognized its role in several technological developments, such as the adoption of 3D NAND memory, which rely on Applied’s innovative manufacturing technology. AMAT shares started to rise in 2016 and continued to run higher — nearly 60% — in 2017 on its consistently strong sales growth, which greatly exceeded the Street’s expectations. Investor’s continued confidence in Applied’s longer-term potential also helped it gain speed.
However, the stock has taken a few earnings-related pit stops in 2018 and it hasn’t been able to regain speed since (shares of AMAT are down 35% year-to-date). Some of the damage is related to the general selloff in tech stocks during October’s madness, but one of the other culprits is its less-than-glamorous sales projections, which the company reduced earlier in the year.
But despite these struggles, the truth is that the long-term case for Applied still remains intact when you consider its inevitable role in increasingly hot tech trends like AI, among countless others. Add to that the fact that although Applied’s sales projections were lower than initially expected for various quarters, the collective 2018 semiconductor sales are still on-track to break the company’s previous yearly records.
All it will take is a few signs of strength early in 2019 for AMAT stock to make a significant comeback from its current bargain-bin price. This is especially true when you consider that many experts in the semiconductor space identify the recent struggles faced by Applied Materials and other chip companies as a consequence of the cyclical nature of the semiconductor business.
Although companies like AMAT are packed with potential given their inevitable role in all the hottest tech crazes to come, some of these catalysts are still in their infancy and won’t be immediately realized. But when they are, expect big moves in Applied Materials stock again.
#4 – Sina Corp
Buy Below: $150
Sina Corp (NASDAQ:SINA) is another well-established Chinese tech name that Wall Street has decided to abandon in 2018. But similar to the situation with the other Chinese tech stocks on this list, the U.S.-China trade war has created a unique buying opportunity for investors that are willing to take a risk.
Sina Corp is a Chinese technology company that maintains several businesses related to internet and mobile services, but it is mostly appreciated by investors for its 46% stake in Weibo, of which it derived 75% of its revenue in 2017. Sina’s ownership of Weibo grants it two key benefits that set it apart from other tech stocks: A) it reaps the rewards of Weibo’s constantly growing success, and B) it is also a potential buyout target because of its association with Weibo.
Specifically, some analysts speculate that in order to get an advantage over growing competition, Alibaba, which already has a stake of roughly 30% in Weibo, might seek to acquire it fully by acquiring Sina.
But the buyout potential is just the cherry on top when you break down the bullish case for Sina. Yes, the company will continue to grow as Weibo expands, but it has also taken initiative to focus more on its other businesses as well as new opportunities to prove their value as well. Ultimately, what all of this means is that its revenue and earnings are both expected to rise significantly in 2019 and Sina will rely less on Weibo as the years go by — something that some investors have seen as a longer-term crutch in the past.
With that in mind, the multi-faceted benefits to owning Sina stock make it a promising target for those that aren’t afraid to stomach a little risk.
The fact that it’s not as sexy as other Chinese internet stocks also plays to its benefit, because it’s significantly undervalued and may stay further under-the-radar for a longer period than hot Chinese tech IPOs like Huya (NYSE:HUYA). But given its overall strong base, all it should take is the dampening of trade war fears and solid earnings early next year to get the stock back on track. Add to that the potential for a buyout and it’s hard to understand why this older name isn’t getting as much attention as its peers.
#5 –Â IAC/InterActiveCorp
Buy Below: $241
On its own, IAC/InterActiveCorp (NASDAQ:IAC) might not ring a bell, but chances are very good that you know at least one or two of the brand names and companies that IAC has under its wings.
Long story short, IAC helps promising digital businesses take things to the next level and guide them toward groundbreaking success with its online subscription and advertising services. And it’s that formula, as well as the already existing names within its subscription arsenal, that have helped IAC stock shine throughout 2018.
If you’ve ever taken advantage of the services offered from websites and apps like Tinder, Angie’s List, Vimeo, Match.com and Dictionary.com, then you’re well aware of the brand-name backbone that has helped fortify IAC. This helped keep the stock well in the green despite October’s tech stock turmoil, which hammered most other names in the space hard recently. Consider that those brands are just a few of the all-stars under IAC’s belt (it is tapped into more than 150 brands), and it becomes clear why this stock stands out from others in the tech world.
But the fact that IAC and its brands still haven’t come close to reaching their full potential is what earns it a place on this list of promising tech stocks to buy. Up more than 40% year-to-date, IAC stock is just getting warmed up. This is especially true when you consider that its earnings growth is expected to continue climbing at a steady pace over the next few years (31% over the next five years). Combine its promising growth prospects and its impressive portfolio, which consists of all the big-name dating apps, a massively popular video sharing site and numerous online publications, and it’s no wonder why many experts expect IAC stock to keep on climbing in the months ahead.
#6 – JD.com
Buy Below: $32.40
Similar to Alibaba, JD.com (NASDAQ:JD) is another Chinese tech stock that has come under fire recently thanks to trade war pressures and the general hammering of tech stocks during the classically volatile month of October. Adding fuel to the fire, the company’s CEO, Liu Qiangdong has made headlines recently for allegations of sexual assault. All of this has given investors more than enough reason for concern.
However, this short-term pain has created a noteworthy buying opportunity in a company with significant growth potential. And these gains could be realized sooner than you think, given its potential for a comeback.
For those that are unfamiliar with JD.com and what it does, JD is second only to BABA in terms of scale in Chinese e-commerce, where it uses more than 500 warehouses and advanced delivery systems to satisfy the demands of its roughly 300 million customers.
It’s undeniably risky when you factor in the CEO troubles and trade war concerns, but JD.com still has a lot going for it in terms of its relatively steady growth and already massive customer base. Although JD stock is indeed approaching two-year lows, it has become a bargain when you consider its overall consistency and its longer-term potential.
Consider that the excitement surrounding JD doesn’t just involve its general e-commerce business but general advancements in technology as well. The company recently revealed that it’s expanding its focus on automation and artificial intelligence to help improve its scalability in the long term. If the company can realize the potential of these technologies and the trade war concerns begin to fade, you can expect JD stock to make a comeback and start to run even higher in the months and years ahead.
#7 – Vuzix
Buy Below: $11
Never heard of Vuzix (NASDAQ:VUZI)? You’re not alone. This U.S.-based hardware company has a meager $165 million market cap and is thinly traded at just 258,000 or so shares per day.
However, with a primary focus on augmented reality, it could be the breakout tech pick your portfolio is looking for.
Some experts estimate augmented-reality tech will outpace virtual reality in terms of commercial units sold, with the potential market of 20 million commercial AR headsets in the market by 2021. Vuzix is tailor-made to ride this trend with its M300 smart glasses available globally and well-received by many early adopters in the tech space.
There will always be detractors who mock augmented reality after the early struggles of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and its Google Glass device. And others will say that a money-losing gadget company of this size is a long-shot that isn’t right for the typical investor portfolio.
I’ll admit that VUZI is an aggressive play. But if you adhere to the buy-below price and keep a long-term perspective, then it is highly likely that this technology will not only see widespread adoption but that a bigger player like Google or Facebook (NASDAQ:FB) will snatch up Vuzi at the first glimmers of momentum in order to consolidate their grip on the emerging virtual-reality and augmented-reality space.
With shares comfortably under $10, that makes a tripler very possible here. Just watch the buy-below price on this particularly fast-moving stock.
#8 –Â Weibo
Buy Below: $95.70
By now you’ve read a lot about Alibaba and you’ve also read about what makes Sina Corp a strong tech stock to buy for potential short-term/ long-term gains. But outside of the fact that these companies are both Chinese stocks, they also have another key component in common: Weibo. As mentioned earlier, both of these companies hold a significant stake in WB, and all of these Chinese stocks hold impressive long-term and short-term potential of their own.
But now it’s time to dive into what makes Weibo worth buying.
I’ll save you the whole U.S.-China trade war and October tech stock selloff explanation — by now it should be clear what these events have done to many tech stocks and why that chaos has actually created numerous buying opportunities, particularly when it comes to Chinese stocks. Instead, I’ll focus on the bullish case for WB with both of those things already baked in. So, what exactly makes the “Chinese Twitter” a worthy investment?
Weibo is an insanely popular microblogging website in China with over 400 million monthly users. Summing it up from a stock-picker’s perspective, it’s a growth powerhouse at significantly lowered prices, which plays a key social media role in the country with the world’s largest population.
Also consider that WB has beat earnings and revenue estimates throughout 2018, and it has demonstrated impressive growth in all the significant metrics: its monthly active users leaped almost 20%, as did its amount of daily active users.
That’s part of why analysts have high hopes for this stock despite the two-fold pressure bearing down on Weibo and other Chinese tech stocks. If you factor in the high analyst price target of $180, that’s a double from current prices. And when you factor in the general expectation for Weibo to push its growth even further in 2019 and beyond, as well as the potential for a buyout from Alibaba, WB could easily become a tripler sooner than expected.
#9 – Meet Group
Buy Below: $6.30
Often when you run across small-cap tech stocks, you have to pay a big premium for growth. But savvy investors don’t just chase high-flying names, but also extreme values among small-cap stocks in the sector.
That’s what Meet Group (NASDAQ:MEET) offers. Via its MeetMe website and app that go by the same name, Meet Group helps connect people and businesses with one another based on location. That sounds like a go-to segment to be in right now given the push for geolocation in every sector from retail to information technology, right?
The challenge is that Meet Group debuted a bit early, in 2011 before the mobile promise was fully understood and while investors were about to go “risk off†because of the European debt crisis. In the intervening years, sexier platforms like Facebook, Twitter and Snapchat have sucked all the oxygen out of the room, and this tiny $400 million company has been all but forgotten.
But quietly, the fundamentals of MEET have been improving impressively. Meet Group recorded 60% revenue growth in 2017 — and unlike other small-cap tech stocks, it actually posted plenty of actual profits. Yet despite this impressive narrative, MEET shares are trading at low prices … that’s if you act while the stock is still under my buy-below price.
#10 – Accelerate Diagnostics
Buy Below: $18.50
Our last company is often considered a healthcare play, but its high-tech diagnostic platform makes it a shoo-in for this tech list.
Accelerate Diagnostics (NASDAQ:AXDX) is on the cutting edge of patient diagnostics, with its world-class testing software and digital microscopes. The company also is part of the artificial intelligence conversation with its fully automated lab techniques that process blood samples without any human interaction — or human error — to help medical professionals make the most accurate diagnosis.
Yes, this is a company with healthcare applications. But a quick look at Accelerate’s website will show you its products and technology are definitively part of a high-tech future.
Like many healthcare startups, Accelerate is not yet profitable. But its revenue ramp is impressive as sales have grown pretty close to exponentially — from just a few thousand bucks per quarter in 2016 to a few million bucks in fiscal 2018 and projected revenue of over $45 million in fiscal 2019!
This is one of those companies that you want to be in on the ground floor with since it’s at the convergence of many positive factors — disruptive technology, hyped-up trends like artificial intelligence and a demographic certainty of aging baby boomers requiring more care and more sophistication in their treatments. No wonder Accelerate roughly doubled from June 2016 to June 2017.
Although shares have softened up this year … there’s room for a comeback in 2019 once the bulls catch their collective breath.
