3 undervalued technology stocks with high growth potential
The technology sector has been the main driver of the stock market for several years. Yet not all technology companies are experiencing the same growth, and this opens the door for investors looking for interesting opportunities. At a time when some stocks are recovering from recent declines, investors may discover three tech giants whose value has significant upside potential.
These companies are PayPal, Alphabet and ASML, which have been in the spotlight in recent weeks, not only from analysts but also from large institutional investors.
PayPal: A return to growth
After a couple of weaker years, PayPal $PYPLstock is starting to bounce back from the bottom. They hit a new one-year high in October 2024, indicating possible continued growth. Analysts, such as those at Mizuho Financial, have raised their price targets for PayPal to $100 per share, well above today's $81.
Institutional investors, such as those at International Assets Investment Management, share that optimism. They have increased their investment in PayPal by nearly 10,000% in 2024, underscoring their confidence in the company's continued growth. This optimism is supported by earnings per share growth forecasts, which suggest a 9.2% increase over the next 12 months.
Alphabet: Opportunity after the slump
Google shares have experienced a significant decline of more than 12% in 2024. However, the company has quickly recovered and YTD is now +17%. Analysts at Truist Financial have raised their target price for Alphabet to $220 per share, a significant difference from today's price of $164.
Alphabet has several strengths that can pull it forward. In addition to the stable core of its business, the company is focused on innovation, such as autonomous transportation through its Waymo project. This segment has the potential to deliver significant gains and is an important component of the company's future growth.
ASML: A stock that will recover
Dutch company $ASML, which produces advanced chip manufacturing technologies, has seen its shares fall 20% over the past six months after posting disappointing results. Despite this, analysts believe that this decline was exaggerated. The company has solid fundamentals and its future growth is supported by increasing demand for chip technology.
J.P. Morgan Chase reiterated its Buy rating on ASML stock with a target price of $1,148, up significantly from today's price of $710 (on the NASDAQ). Also in this case, International Assets Investment Management increased its investment by 94,079%, reflecting confidence in the company's quick recovery.
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Source: Investing, TheMotleyFool.