In July, the technology sector saw a 4% decline, as tracked by the Technology Select Sector SPDR Fund (XLK). This was lower compared to the Russell 2000, which gained 10%. The dip was due to disappointing earnings from major tech companies like Alphabet Inc. (GOOGL) and a shift in investments towards sectors affected by interest rates, like financials, ahead of a possible rate cut by the U.S. Federal Reserve.
Here’s a look at the best tech stocks for August 2024, focusing on value and growth. All stocks are from the Nasdaq or New York Stock Exchange and are priced above $5, have a daily trading volume over 100,000, and a market cap above $300 million.
All data is current as of July 28, 2024.
Best-Value Tech Stocks
Value stocks are those trading below their true worth, which might increase when the market corrects the mispricing. These stocks often have a low price-to-earnings (P/E) ratio.
Perion Network Ltd.: Connects advertisers with consumers through digital channels. Recently, policy changes by Microsoft Bing have significantly reduced Perion’s search revenue, now expected to be less than 5% of total revenue in the second half of 2024.
Consensus Cloud Solutions: A leading provider of digital faxing solutions for healthcare and finance. Reported a $3.3 million revenue decline in Q1 2024.
Opera Limited: Known for its web browser and AI-driven content discovery. Saw a 21% increase in ad revenue in Q1 2024, making up 58% of total revenue, with search revenue up by 14%.
Fastest-Growing Tech Stocks
Growth stocks show significant revenue and earnings increases, indicating strong potential. A balanced look at year-over-year (YOY) growth for both earnings per share (EPS) and revenue helps identify these stocks.
Hut 8 Corp.: A Bitcoin miner and energy infrastructure company. Q1 2024 revenue increased to $51.7 million, up $36.1 million from Q1 2023.
EHang Holdings Limited: Provides unmanned aerial vehicle systems. Delivered its first 10 pilotless electric aircraft and completed initial passenger flights in Taiyuan, China.
Credo Technology Group Holding Ltd.: Offers high-speed connectivity solutions for data infrastructure. Q4 2024 revenue was $60.8 million, an 89.4% increase from the previous year, driven by AI deployments.
Advantages of Tech Stocks
Growth Potential: Tech stocks, especially in emerging areas, often grow rapidly. Smaller companies or those with new breakthroughs can see substantial gains. Big names like Amazon (AMZN), Meta (META), and Alphabet (GOOGL) also continue to grow.
Innovation: The tech sector constantly evolves with new trends like AI, offering companies in this space significant growth opportunities.
Disadvantages of Tech Stocks
Volatility: Tech stocks can be highly volatile due to rapid changes and competition, leading to big price swings. High valuations based on growth expectations can make them prone to market corrections.
Fast-Changing Trends: The tech sector's quick pace means trends can shift rapidly. Investors who aren’t well-versed in the technology may struggle to keep up, potentially investing in trends that have already changed.
The tech sector in 2024 is poised for growth driven by AI advancements, ongoing digitization, and cloud computing. These areas offer great opportunities, especially for semiconductor producers and cloud service providers. However, the macroeconomic environment, including interest rate policies, will impact short-term performance.
Comentarios