Ranging from artificial intelligence, cloud computing, satellites, and more, these tech stocks to buy now could make up the next Magnificent 7 as their respective markets mature and they continue expanding at their current pace.
Palantir Technologies (PLTR)
Palantir (NYSE:PLTR) easily tops the list of top tech stocks to buy now after its recent earnings strength, but remember that the tech stock isn’t a one-trick pony. In fact, the most recent quarterly report is the company’s fifth consecutive profitable quarter, affirming its S&P 500 eligibility. Remember that the S&P methodology requires four consecutive profitable quarters plus profitability for the most recent quarter, though that parameter doesn’t apply to incumbents.
But, index inclusion aside, more bullish factors put Palantir at the top of the list of tech stocks to buy now. The biggest deal, and what drove bearish sentiment in the past, is Palantir’s accelerating commercial contract pipeline. In the past, concern centered around Palantir’s over-reliance on government contracting. That’s a valid consideration, but the company’s year-end commercial revenue grew 20% year-over-year (YoY), while government sales value climbed 14%. Though both top-line numbers point to strong momentum, commercial sales expansion points to Palantir successfully breaking free from its “defense stock” misconception.
Tech Stocks to Buy Now: Arista Networks (ANET)
Some top analysts see Arista Networks (NYSE:ANET) as the “next big thing” for artificial intelligence, but, thus far, it’s been eclipsed by other big-name tech stocks competing for investor attention. But that could change in 2024.
Analysts, including those at Citi, Morgan Stanley, Barclays, and more, rate Arista as a Buy based on future cloud sector expansion and AI opportunities. Specifically, Citi analyst Atif Malik said that Arita benefits from both the “generative AI megatrend” and broad “early AI-related opportunities.”
Though the company hasn’t yet posted earnings, analyst forecasts trend toward the bullish side as well. Consensus estimates peg earnings per share at $1.70, or 20% higher YOY. The company’s last report beat expectations, with management painting a rosier-than-expected picture for Q4 and its end-of-year report. All eyes are on this tech stock to buy before its February 12th earnings call as AI investor sentiment cycles back to the “hard tech” side of the equation.
Rocket Lab USA (RKLB)
Rocket Lab USA (NASDAQ:RKLB) shares suffered thus far in 2024 after a convertible note offering spooked investors wary of dilution. But the company’s 20% drop likely won’t last long – making today’s pricing entry point ideal among small-cap tech stocks. Most already know that the company secured a $515 million contract to launch and service select space assets, but wider institutional attention has only recently accelerated.
Specifically, like Arista, Citi analysts are bullish on RocketLab. The rating and analysis side of the banking giant set a Buy rating for the stock with a $6.00 price target, or about 40% above today’s per-share pricing. Citi set the target based on a 3x multiple of the company’s current sales projection, indicating that the substantial government contract is just the beginning of an expanding sales cycle as the company matures and proves competitive with existing space stocks. Small-cap tech stocks tend to have the best long-term upside potential at the cost of higher volatility, so getting in with RocketLab today is a surefire way to capture a slice of a $1 trillion growing industry.
Tech Stocks to Buy Now: Broadcom (AVGO)
I talked last year about the investment opportunity that the Broadcom (NASDAQ:AVGO) and VMware merger represented from an equity arbitrage perspective. But, now that the deal is closed, there’s a tech stock opportunity in Broadcom now that VMware’s acquisition softens its reliance on Apple (NASDAQ:AAPL).
Historically, Apple accounts for about 20% of Broadcom’s revenue based on its ongoing 5G and wireless component deal. Expanding into cloud computing massively increases Broadcom’s total addressable market. Broadcom expects VMware integration to healthily boost its bottom line, although the first year also must account for about $1 billion in transaction costs that will cut into early-stage profitability. Still, a short-term hurdle is a small price to pay for long-term synergies, and Broadcom’s current per-share pricing (which has bearish undertones) positions it as a tech stock ready to surge once management fully divests unused VMware segments and begins working in sync with its new sectors.
AST SpaceMobile (ASTS)
AST SpaceMobile (NASDAQ:ASTS) can’t stop its winning streak after announcing a new, secret deal with the U.S. government. While “announcing” and “secret” might seem counter to one another, the secretive nature of the deal surrounds what AST will provide and for how much. But swirling unknowns don’t impact the main message. Like RocketLab, the U.S. government throwing its hat in with ASTS is an important endorsement of the company’s viability and offerings. That endorsement rings especially loudly, considering ASTS is firmly in the pre-revenue stages, with its first widespread commercial launches planned for later this year.
The news comes, of course, on the heels of ASTS’ massive strategic funding deal that includes big-name investors like AT&T (NYSE:T) and Google (NASDAQ:GOOG, NASDAQ:GOOGL). That deal was soon followed by a dilutive share offering announcement, sending shares close to penny stock territory. But, with all the bullish tailwinds propelling this small-cap tech stock forward, expect big things in 2024 for ASTS.
Tech Stocks to Buy Now: SoFi Technologies (SOFI)
SoFi Technologies (NASDAQ:SOFI) seems to have finally found its spot between “pure” next-gen fintech and bigger-picture legacy banking. At the end of January, the cheap tech stock banked its first-ever profitable quarter at a slim two cents per share. But profit is profit, and the fact that SoFi successfully nailed its first in a “higher for longer” macroclimate means that the stock should surge as rates settle.
Uniquely, SoFi is now pivoting toward a wider range of offerings to cement its place as a one-stop financial services stock when coupled with its range of banking and borrowing solutions. SoFi recently announced that it now offers alternative investments within its investment platform, letting investors access otherwise off-limit assets like private credit and venture capital through managed funds.
Not all are as bullish on SoFi’s future as recent developments would imply, though, as Morgan Stanley recently downgraded the stock based on “[SoFi] pricing in too much optimism on the path to 2026 profitability laid […] while staring in the face of a worsening top-line growth outlook for 2024.” But investors have plenty to justify optimism, and the tech stock is still priced to buy well below past highs.
Fabrinet (FN)
Fabrinet (NYSE:FN), a small-cap semiconductor stock, is another tech stock positioned for massive upside in the coming years. The company counts Nvidia among its big-name client list, underscoring its long-term potential. Even as chipmakers battle for supremacy, Fabrinet’s focus on data transmission makes it a major supplier to the best-in-class semiconductor stocks. This helps shield it from company-specific risk while capturing the entire segment’s long-term upside.
Though the company reported underwhelming earnings last week, management’s long-term outlook remains rosy. Executives project a slight bump for next quarter’s earnings, though its forecast remains slightly below past analyst expectations. Slowing growth in the short term means consolidation and accumulation opportunities for investors before tech stocks’ next leg up as the artificial intelligence and semiconductor sectors keep maturing.
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.