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Tech stocks have long been the darlings of the investment world.
However, recent changes in market mechanics have forced many to trade at what can only be called huge discounts. Some tech stocks are still cheap, even as the industry makes a surprising run in 2023 thanks to unprecedented developments in technologies like generative artificial intelligence (AI). These anomalies present a rare opportunity for astute investors willing to take advantage of cheap prices that may not last long.
Many indicators point to continued growth of the IT industry as we approach 2024. Advances in artificial intelligence, the ongoing digital revolution in industries, and the relaxation of earlier market growth rates create a conducive environment for growth. excitement
Tech stocks that are now selling below their intrinsic value should be considered by investors looking for high-return investment opportunities. However, these stocks are unlikely to remain at current prices. More investors see their potential and act to correct short-term mistakes made by the market.
These 3 tech stocks represent great buying opportunities at steep discounts.
Opera (OPRA)
In the tech sector, Opera ( NASDAQ:OPRA ) is a lesser-known participant. Opera has established a niche for itself with cutting-edge features and calculated expansions that mark a significant step up from its larger rivals.
By focusing on niche browsers like Opera GX, which is aimed at gamers, Opera has entered a booming and expanding field. Opera GX has features like Twitch integrations and CPU and RAM limiters that improve gaming performance. It stands as a result for its intended audience.
Opera has shown strong financial performance with average revenue per user (ARPU) steadily increasing. The company’s sales and EBITDA for the first quarter of 2024 beat the guidance provided by management in the previous quarter.
Opera’s Icelandic AI data center initiative, which uses
Its use of cost-effective and sustainable energy sources is at the forefront of the AI revolution in online browsing. This progressive strategy fits well with current global environmental trends. Additionally, the business is becoming more attractive to investors who care about the environment.
Despite its growth trajectory, Opera’s current valuation is below the industry average, indicating that the company is cheap. With a forward P/E ratio of 18.9x, the business now trades well below the industry median of 29.8x.
Photronics (PLAB)
A significant participant in the photomask market is Phototronics (NASDAQ:PLAB). The corporation had a tough second quarter of fiscal 2024, falling short of analysts’ top and bottom line estimates. Despite these obstacles, the company’s market position and strategic actions promise long-term success.
Despite the difficulties in Q2, Photronics’ management is upbeat about the quarters ahead. The business is poised to meet growing demand, particularly in light of the ongoing revival of the semiconductor industry. Phototronics forecasts that strong semiconductor industry fundamentals and increasing demand for its high-precision photomasks will drive revenue growth through 2024 and 2025.
Maintaining a $140 million annual budget for capital expenditures demonstrates Photronics’ commitment to long-term growth and technological leadership. Modern machinery purchased by the firm and quick recovery from production disruptions are signs of a strong operating strategy.
Photronics has a strong financial base, with large cash reserves and a low debt burden. The forward P/E for the company’s stock is now 11.8x. This represents a significant discount to the sector median, which is 29.8x.
ACM Research (ACMR)
Single-wafer wet cleaning equipment development and production are areas of expertise for ACM Research (NASDAQ:ACMR). Industry is looking for increased revenue and efficiency, and ACM Research’s creative solutions offer strong advantages over traditional techniques.
In its most recent quarterly reports, ACM Research showed strong revenue growth – a significant increase over the previous year. The firm mainly derives its revenue from mainland China, where it has access to the largest semiconductor market globally.
The business continues to come up with new ideas for all its product lines. ACM Research holds several patents that support its competitive advantage, such as vacuum pre-oleating of wafers and multi-zone anodes, which are essential for manufacturing high-end semiconductors.
ACM Research has strong valuation indicators that demonstrate its credibility as a financial institution. Although it is lower than the industry standard of 29.8x with a forward P/E ratio of 18.5x,forward EV/EBITDA multiple of 10.7x compared to an industry average of 14.5x, the company presents an undervalued proposition relative to its peers.
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