Investing in Tech: Three Promising Stocks to Consider Now
The stock market has shown strong gains this year, bolstered by the Federal Reserve’s decision to cut interest rates. As tech stocks—driven largely by advancements in artificial intelligence (AI)—continue to thrive, investors can find value in specific companies. Here are three attractive tech stocks to consider investing $1,000 in today.
Nvidia: The Leader in AI Infrastructure
Nvidia (NASDAQ: NVDA) stands at the forefront of AI technology. Known for designing graphics processing units (GPUs), Nvidia plays a crucial role in powering the computing needed for large language models (LLMs) and AI applications. Their software platform, CUDA, established Nvidia as the standard for developers long before AI became a market driver.
The demand for Nvidia’s GPUs remains high, fueled by substantial investments from major tech firms and AI startups. Recent forecasts from Citigroup suggest that the top four cloud computing companies could increase their data center spending by 40% to 50% next year, a significant portion of which will likely be directed toward Nvidia’s hardware.
Despite these growth opportunities, Nvidia is trading at a forward price-to-earnings (P/E) ratio of about 33.5 based on next year’s estimates. Additionally, it has a price/earnings-to-growth (PEG) ratio of 0.93, indicating that it may be undervalued relative to its growth potential, as a PEG under 1 usually suggests.
Image source: Getty Images.
AppLovin: Leveraging AI in Advertising
AppLovin (NASDAQ: APP) has thrived in the AI boom, particularly through its advertising platform rather than hardware. While it owns several mobile games, its main focus has been on providing advertising technology to gaming companies, helping them attract more customers and monetize their content effectively.
The introduction of its Axon 2 AI-driven advertising platform has significantly boosted revenue, with earnings in the second quarter (ending June 30) rising 75% to $711 million. In contrast, competitor Unity Software saw its advertising revenue decline by 9% during the same period.
Moreover, AppLovin aims to expand beyond gaming into broader web-based marketing and e-commerce, presenting ample opportunity for continued growth. Currently, the stock is trading at a forward P/E ratio of 25 and has a PEG ratio under 0.5, making it attractive for potential investors.
SentinelOne: A Growing Cybersecurity Player
SentinelOne (NYSE: S) is a rapidly expanding cybersecurity firm that offers a preferable price-to-sales (P/S) ratio compared to larger competitors like CrowdStrike and Palo Alto Networks, alongside expectations of faster revenue growth this fiscal year.
S PS Ratio (Forward 1y) data by YCharts
The company has unique growth opportunities, particularly with its Singularity Platform, which uses AI for endpoint security. SentinelOne could benefit from any potential fallout from recent customer issues faced by CrowdStrike. Additionally, a new partnership with Lenovo to integrate its security system into new PCs further positions it for significant growth in the coming year.
A Second Chance at Investment Opportunities
Many investors worry they missed out on major stocks in the past. It’s essential to stay informed about current opportunities.
Our analysts have identified “Double Down” stocks—companies poised for growth that might be overlooked. Historical data reveals astonishing returns for previous recommendations:
- Amazon: A $1,000 investment in 2010 would now be worth $21,022!
- Apple: A $1,000 investment in 2008 has grown to $43,329!
- Netflix: A $1,000 investment in 2004 would have skyrocketed to $393,839!
Join us today and explore three “Double Down” stocks with the potential for exceptional gains.
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*Stock Advisor returns as of October 7, 2024
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Nvidia, Palo Alto Networks, and Unity Software. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
