Although inflation growth may be declining, the current cost of goods and services remains significantly higher than two years ago. This discrepancy exists because inflation indexes measure ongoing growth, not actual price differences, leading to persistently low consumer confidence despite apparently positive inflation statistics.
At the same time, high-flying tech stocks like Nvidia (NASDAQ:NVDA) are becoming prohibitively expensive for retail traders, particularly as market volatility and general frothiness surge. This is where stocks priced under $50 come into play. They’re generally cheap enough that a decent-sized share count is easy to accumulate. At the same time, each one is positioned for rapid growth due to specific favorable conditions and bullish momentum, paving the way for potential success. Take note – these under-$50 stocks won’t stay cheap for long.
Palantir Technologies (PLTR)
If any under-$50 stock qualifies as the comeback story of the year, it’s Palantir Technologies (NYSE:PLTR). With a solid foundation of government contracts and an expanding corporate portfolio, the artificial intelligence and machine learning company finally escaped its mid-teens rangebound trading after a strong earnings report propelled shares up by 30% since January.
That report also marked its fifth consecutive profitable quarter, recording earnings of 8 cents per share and a 14% revenue increase from government contracts at year’s end. More notably, revenue from its commercial segment jumped by 36%. While past bearish sentiment often focused on its reliance on government contracts, Palantir’s successful expansion into the corporate sector now distinguishes it from competitors.
Although the per-share price is well under $50, the stock has remained stubbornly within the $20 – $25 range, possibly as part of CEO Alex Karp’s beef with short sellers. But despite some stock price and valuation skepticism, Palantir’s long-term prospects remain unmatched across multiple sectors, including artificial intelligence and defense industry stocks.
Under-$50 Stocks to Buy Now: GigaCloud Technology Inc (GCT)
GigaCloud Technology Inc (NASDAQ:GCT) has experienced a turbulent ride in 2024, initially surging to nearly $45 per share following a solid earnings report, only to fall back to pre-earnings levels – standing out as an under-$50 stock to buy now the whole time, though.
The decline in post-earnings share price largely reflected investors taking profits rather than a significant critique of GigaCloud’s long-term potential. Trading at just 13x earnings, GigaCloud, often compared to Alibaba (NYSE:BABA), distinguishes itself by serving B2B markets. Unlike Alibaba, GigaCloud is not just about product sourcing; it offers a comprehensive vendor management platform designed to handle cross-border payments and other complex aspects of global eCommerce that often challenge small businesses.
The small business market remains largely untapped, and GigaCloud’s solutions, including payment processing, shipment and freight management, AI-enabled fulfillment, and warehouse storage, provide a unique value proposition. This integrated service package is particularly valuable for entrepreneurs who struggle to compete with larger entities like Amazon (NASDAQ:AMZN). As companies like Amazon continue to increase fees and fulfillment rates, SMBs looking to maintain independence will increasingly turn to self-sourced/self-managed platforms like GigaCloud.
News Corp (NWSA)
News Corp (NASDAQ:NWSA) may initially seem out of place among other under-$50 stocks due to its roots in legacy media €”an industry not typically associated with high-flying prospects. Historically dependent on newspapers, books, and cable television, News Corp is distinguishing itself through a successful pivot to next-generation media formats.
This shift in News Corp’s strategy is partly driven by Starboard Value, an activist investor firm that recently snagged a significant stake in the company. Following this investment, News Corp reported a 3% increase in quarterly revenue year-over-year and a 94% boost in net income. CEO Robert Thomson attributes these financial gains to the company’s strategic emphasis on digital and subscription revenues, moving away from the less predictable advertising revenue model.
This strategy mirrors that of many software-based under-$50 stocks, which favor recurring revenue streams over sporadic, larger payments. For instance, News Corp is focusing on acquiring digital subscriptions rather than chasing high-budget advertising accounts, similar to how Adobe (NASDAQ:ADBE) now offers Photoshop on a subscription basis rather than as a costly one-time purchase.
This strategic pivot is bearing fruit, especially in niche areas like the Dow Jones segment and digital real estate services, both of which are performing strongly. Although News Corp currently places less emphasis on dividends to focus on adapting its operations for the digital era, it still offers a modest 1.65% total yield, striking a balance between operational changes and shareholder returns.
Under-$50 Stocks to Buy Now: Steelcase (SCS)
Steelcase (NYSE:SCS), a high-end office furniture company, emerges as a standout under-$50 value stock that retail traders tend to skip over. The company is thriving post-pandemic as it adapts to the evolving work-from-home trends, underscored by its recent declaration of a $0.10 quarterly dividend, representing a 61% payout ratio and a 2.88% yield.
Steelcase has rapidly regained its financial stability after a challenging pandemic period. Its latest quarterly report revealed a net income of $30.8 million, more than doubled from last year’s figure. Furthermore, sales have maintained a steady pace of around $800 million over the past five quarters, showing that Steelcase is improving margins without sacrificing quality.
In reaction to the shifting work-from-home landscape, Steelcase is repositioning to target 5-7% annual sales growth and a 5% free cash flow margin (as a percentage of revenue) over the next five years. At the same time, the company has significantly cut its debt to better cope with the higher-rate environment, enhancing liquidity and reducing interest costs. These strategic initiatives mark Steelcase as one of the most promising stocks under-$50 stocks to buy now.
Snap (SNAP)
Although Snap (NYSE:SNAP) contends with competitive pressures as younger users flock to newer apps, the under-$50 stock is far from defeated. Instead, it’s buoyed by its virtual and augmented reality strides and a growing advertising platform.
Snap aims to surpass 475 million daily active users in 2024, setting a target above Wall Street’s expectations. The app’s appeal is further enhanced by its vast array of augmented reality lenses, created by over 350,000 AR developers and totaling nearly 3.5 million lenses.
Financially, Snap’s short-term prospects look promising, with advertising revenue expected to grow by more than 20% in 2024, surpassing Wall Street’s forecast of 14% and aligning with Snap’s ambitious goals. For the upcoming quarter, Snap anticipates revenue between $1,095 million and $1,135 million, marking a year-over-year increase of 11% to 15%. These positive indicators position Snap as a compelling choice among under-$50 stocks, especially for those bullish on long-term augmented reality trends.
Under-$50 Stocks to Buy Now: Braze, Inc. (BRZE)
Advertising technology is undergoing a quiet renaissance as digital consumer trends evolve and media becomes more centered around content creators. Venture capital is pouring into private AdTech firms, yet publicly traded Braze, Inc. (NASDAQ:BRZE) stands out as an under-$50 stock ideally positioned to capitalize on these emerging marketing trends. Braze enables brands to manage multichannel marketing across all major digital platforms, adopting a fresh and unique approach.
Unlike traditional AdTech companies that target consumer segments through aggressive campaigns, Braze excels in navigating consumer engagement practices. It manages curated journeys that follow users across platforms and deliver a personalized and unique experience. This personalization fosters a mental connection between the user and the brand, effectively converting potential customers. This effective strategy is why well-known entities like Match (NASDAQ:MTCH), NASCAR, and Restaurant Brands International (NYSE:QSR) flock to Braze’s distinctive services.
Although Braze is not yet profitable and trades at a premium today, despite its under-$50 pricing, the company is a pioneer in emerging advertising trends. Early entrants in such dynamic sectors often require time to build momentum and achieve profitability, so get in on the ground floor before it’s too late.
Chegg (CHGG)
As startups and established companies increasingly harness GPT-derived “innovations,” Chegg (NYSE:CHGG) emerges as a robust EdTech contender, using artificial intelligence to transform traditional learning institutions and concepts. Although its shares currently trade nearly one-third lower than their January pricing, Chegg’s solid fourth-quarter report has led to a new wave of analyst upgrades in anticipation of the first-quarter report due on April 29th.
The company already boasts a solid gross margin of 68%, with management predicting even higher margins for 2024 despite a slight dip in revenue and subscription rates in 2023. These forecasts come as the company invests heavily in R&D and related costs to develop new AI offerings and tailor them to evolving trends and technologies.
CEO Dan Rosensweig has acknowledged the challenging balancing act, stating that the team “completely reinvented the company by leveraging the advancements in artificial intelligence” and that, as the initial AI hype wanes, “leaders in their verticals like Chegg are taking control of their own destiny by building their own models [that offer] higher quality and lower cost.” Chegg is finding its footing within the AI-enabled EdTech landscape. As more individuals and institutions adopt forward-looking technologies, this under-$50 stock is poised to potentially surge significantly in 2024.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.