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If you’re trying to narrow down which tech stocks to buy this month, you’ve come to the right place. The technology sector continues to drive up the stock market. In just six months, NVIDIA (Nasdaq:NVDA) tripled its market capitalization to $3 trillion, apple (Nasdaq:AAPL) was ranked as the second most valuable stock (it recently dropped to third place).
But other tech stocks have performed just as well as or better than the chipmaker. Dave (Nasdaq:Dave) has quadrupled in value this year, up nearly 400%. MicroStrategy (Nasdaq:MSTR) has increased by 170%, which is Bitcoin (BTC-USD) has risen again.
But what the numbers show is that big profit opportunities remain in the sector, and these three tech stocks to buy could be the next big rally.
Tech Stocks to Buy: Supermicro Computer (SMCI)
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Last year’s tech darlings Super Microcomputer (Nasdaq:SMCI) has seen its growth slow this year, but not by much. After a 250% increase in 2023, it’s only up 172% this time around. But that’s because SMCI shares have fallen 37% from their all-time high in March. Now is the time for the next upswing.
Supermicro reported first-quarter results that beat Wall Street expectations but didn’t offer any eye-opening guidance for the rest of the year, and SMCI’s fourth-quarter outlook called for just $5.8 billion in sales, triple last year’s, sending the company’s shares sour on the stock market.
Supermicrocomputers are artificial intelligence (artificial intelligence)-optimized computers, servers, networking, storage solutions, and workstations for data centers and other industries. Hyperscalers need more capacity, alphabet (Nasdaq:GoogleNasdaq:Google), Amazon (Nasdaq:Amazon) and Microsoft (Nasdaq:MSFT) is building new data centers across the country, so demand for Supermicro’s equipment is likely to continue.
SMCI’s stock price earnings are expected to grow an impressive 62% annually over the next five years, but the stock’s actual value will only represent a small fraction of that growth. That’s why Super Micro Computer is the tech stock to buy now.
Palo Alto Networks (PANW)
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Cybersecurity Experts Palo Alto Networks (Nasdaq:Pan W) is another undervalued tech stock to buy, with no end in sight to its growth potential. Like death and taxes, hackers and cybercrime will always be with us, even in the age of connected computers. LexisNexis Risk Solutions Globally, “human-initiated digital attacks” have increased 19% compared to last year.
Yet Palo Alto shares are priced to rise just 1% in 2024. The market is concerned that revenue growth is slowing — third-quarter sales rose just 3% to $2.3 billion — but that’s because the cybersecurity company offered program bundle discounts to existing customers.
The company is also benefiting from customers consolidating their security investments. Customers are buying more Palo Alto modules under a new single platform offering, rather than across a multitude of different vendors. Especially with the growth of AI, the cybersecurity leader is offering new program packages that provide better protection.
Palo Alto Networks’ low share price gives investors an opportunity to buy this tech stock at a discount.
ACM Research (ACMR)
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Advanced wafer cleaning technology and equipment (Worldwide) supplier ACM Research (Nasdaq:ACMR) is another tech stock that the market has mistakenly sold off. Its shares are down 38% from their 52-week high but remain 16% higher than they were at the start of the year.
One reason for the market setback is that the market for ACM has been declining so far this year. Gartner analysts predict the WFE industry will decline 4% this year, after declining 10% in 2023. However, that will reverse course and grow 10% from 2025 onwards, with strong growth continuing through 2027. It’s easy to see why.
Demand for computer chips is growing, especially due to the need for AI. ACM Research’s equipment is essential because it removes contaminants from wafer surfaces prior to the chip processing cycle. Chip manufacturers need a clean surface before they can start making wafers.
The company’s equipment expertise will be essential as semiconductor companies face secular growth trends, which should propel ACMR’s stock to new highs in the future.
As of the date of publication, Rich Duprey does not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication guidelines.
