Finding top 3 affordable tech stocks can be a challenging task, considering that the tech market is often saturated with high-profile, cutting-edge technologies that garner significant attention. These popular stocks are frequently hyped, driving up their prices. However, there are hidden gems in the tech sector that haven’t yet attracted the spotlight but present excellent investment opportunities. If you’re looking to diversify your portfolio with tech stocks, here’s a list of top options to consider.
Top 3 Affordable Tech Stocks
1. CrowdStrike: Maximizing Cybersecurity
CrowdStrike (NASDAQ: CRWD) is a prominent player in the cybersecurity industry, specializing in endpoint security. This type of security focuses on protecting network access points, such as laptops and cloud workloads. However, CrowdStrike offers more than just basic protection. They provide additional features like identity threat protection, threat hunting, and malware search, making them a comprehensive solution for various cybersecurity needs.
Remarkably, 63% of their customers utilize five or more of CrowdStrike’s products, while 24% use at least seven. The company is experiencing rapid growth, with its annual recurring revenue (ARR) surging by 37% to $2.93 billion in Q2 of FY 2024, which ended on July 31. Furthermore, CrowdStrike boasts a 26% free cash flow margin, indicating its journey towards achieving generally accepted accounting principles (GAAP) profitability. Notably, they posted an $8 million profit in Q2.
When evaluating the affordability of a stock, it’s essential to consider its valuation rather than its stock price. While CrowdStrike might seem a bit pricey initially, it trades at 15 times its sales and 48 times its free cash flow (FCF). When accounting for its impressive growth, it becomes apparent that CrowdStrike is an affordable option. Wall Street analysts predict that CrowdStrike’s FY 2025 revenue will reach approximately $3.9 billion. Coupled with CrowdStrike’s trailing-12-month FCF margin of 30%, the stock is valued at just 10 times sales and 33 times FCF, which are reasonable price points for a company experiencing over 30% growth. In summary, CrowdStrike is a compelling stock for investors seeking affordability in the tech sector.
2. UiPath: Revolutionizing Automation
UiPath (NYSE: PATH) provides clients with cutting-edge robotic process automation (RPA) software, offering an innovative solution for task automation. Moreover, UiPath offers impressive artificial intelligence (AI) plug-ins that expand the platform’s capabilities. For instance, UiPath can analyze documents, understand their content, and automatically input the required information without human intervention.
Despite the immense potential of its AI applications, UiPath hasn’t garnered the attention it deserves. Valued at just 8 times its sales, it’s worth exploring why the stock is priced so attractively. The company demonstrated its strength by growing its ARR by 25% in Q2 of FY 2024, ending on July 31, and expanding its customer base with a 16% increase in customers spending more than $100,000 annually. Despite these positive indicators, UiPath has struggled since going public in 2021, which has led to skepticism among some investors. However, this presents a golden opportunity for investors to consider UiPath for their portfolios.
3. Amazon: Unveiling Undervaluation
Amazon (NASDAQ: AMZN), a household name in e-commerce, has recently evolved beyond its traditional business model. With the emergence of Amazon Web Services (AWS), third-party seller services, and advertising, the company’s gross margin has significantly increased. Gross margin represents the profit left after subtracting the cost of goods sold, which is typically low for e-commerce businesses. However, thanks to higher-margin ventures, Amazon’s gross margin is on an upward trajectory.
Surprisingly, this increase in profitability hasn’t corresponded with a higher valuation, making Amazon a highly undervalued stock. Andy Jassy, the successor to Jeff Bezos, has been diligently improving operational efficiency, leading to enhanced profits. While Amazon is a sizable company, it maintained a respectable 11% growth rate in Q2. However, the real appeal here isn’t its growth but its improving margins. The stock is currently trading at a lower valuation than in previous years, presenting an excellent buying opportunity for investors.
In conclusion, these Top 3 Affordable Tech Stocks – CrowdStrike, UiPath, and Amazon – offer promising investment opportunities. They may not be the flashiest options in the tech world, but their affordability, growth potential, and competitive advantages make them attractive choices for investors looking to diversify their portfolios with quality Top 3 Affordable Tech Stocks.Top 3 Affordable Tech Stocks Top 3 Affordable Tech Stocks Top 3 Affordable Tech Stocks Top 3 Affordable Tech Stocks