Investing in technology stocks offers investors some of the best opportunities for realizing long-term wealth creation. Tech stocks, after all, tend to be the driving force behind some of the stock market’s most powerful bull markets.
Yet such meteoric increases can also see dramatic reversals of fortune. Super Micro Computer (NASDAQ:SMCI) was one of the top-performing tech stocks in 2023, rocketing 230% higher compared to a 54% gain by the Nasdaq 100 index. And though SMCI quadrupled in value again over the first three months of this year, it has since lost two-thirds of those gains. Tech stock investing is replete with such rollercoaster rides.
Yet market fluctuations create opportunities for savvy investors. Sudden stock price deflation lets you capitalize on the lower prices so long as the companies retain their high-growth potential.
The three tech stocks below present compelling reasons for investors buying their shares on a dip. Not only do they exhibit strong fundamentals and innovative growth trajectories, but they also play pivotal roles in shaping the future of their respective industries. Investors can generate substantial wealth by waiting for attractive buying opportunities.
Key Points About This Article:
- Tech stock investing can be a thrilling ride, but it also holds the possibility for sickening dips as sector volatility tends to be more pronounced.
- The three companies below have strong fundamentals and compelling arguments in favor of investors buying whenever their stocks fall.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Snowflake (SNOW)
The first stock to buy on each and every dip is Snowflake (NASDAQ:SNOW), a cloud-based data warehousing company that lets companies store, manage, and analyze vast amounts of data efficiently.
Snowflake stock, though, has turned into a snowball rolling downhill and is gathering steam as it falls. Shares are down 43% in 2024, are 52% below recent highs, and sit 70% below their all-time peak in 2021. Oof. Yet a good case can be made for SNOW stock to double in value over the next few years.
Demand for cloud-based data warehousing and analytics solutions is increasing as businesses look to leverage data for strategic decision-making. Snowflake’s platform provides scalable and flexible solutions that cater to a wide range of industries. It has established partnerships with major cloud providers like Amazon‘s (NASDAQ:AMZN) AWS, Microsoft‘s (NASDAQ:MSFT) Azure, and Google Cloud. The trio enhance SNOW’s market reach and make it easier for businesses to adopt its solutions.
Second-quarter results showed Snowflake beating Wall Street’s top and bottom line estimates as it added 21% more customers to its rolls. With an artificial intelligence-based product lineup to launch next year, the data warehousing stock is positioned to regain its former lofty heights.
Palantir Technologies (PLTR)
Big data analytics stock Palantir Technologies (NYSE:PLTR) is the second tech stock to buy on a dip. Unlike Snowflake, though, Palantir isn’t providing many opportunities. Shares are up 83% year-to-date and have nearly doubled over the past 12 months.
Palantir has become a premier AI stock. It specializes in enabling organizations to integrate, analyze, and visualize complex data sets for actionable results. Its Foundry and Gotham platforms are utilized by government agencies and enterprises, respectively, to enhance decision-making, streamline operations, and improve outcomes. Government agencies, especially in defense and intelligence, provide it a steady revenue base. Yet it is the commercial market that holds the promise for greater long-term growth.
Palantir has a large and growing stable of enterprise-class customers that are attracted to its Artificial Intelligence Platform (AIP) that allows clients to integrate large language models (LLM) into their systems. Palantir says demand is “unprecedented.”
Second-quarter revenue grew 21% from last year on the strength of a 40% hike in commercial revenue chasing AIP. Palantir Technologies is confident that will spread to the rest of its portfolio as well. Should PLTR stock take a breather, investors should use the opportunity to hop aboard.
Tesla (TSLA)
I’ll admit to being skeptical of Tesla‘s (NASDAQ:TSLA) ability to continue driving electric vehicle sales growth at the same pace that investors grew accustomed. I think the easy money has been made in EV penetration and convincing larger percentages of the population to transition away from gas-powered vehicles will be more difficult.
Yet Tesla stock still has the potential for substantial gains in the future based on its investments in autonomous driving technology and expanding sustainable energy solutions and storage.
Tesla’s Full Self-Driving (FSD) technology could revolutionize transportation logistics and personal mobility as it matures, particularly if it licenses it to other automakers. CEO Elon Musk hinted as much earlier this year when he said the company was in conversations with “one major automaker.”
Further, Tesla’s fleet of EVs are continuously collecting data from drivers. It feeds that information into its AI models allowing it to refine its algorithms faster and potentially leading to additional gains in the autonomous driving market.
Yet its Tesla’s investments in solar technology and energy storage solutions where the most promise lays. Both the Powerwall and Megapack position the company to benefit from the growing demand for renewable energy. As more homes and businesses adopt solar energy, Tesla could see substantial revenue growth in this segment. Tesla also possesses the potential for large-scale energy projects that can open new revenue streams and solidify its position in the energy market making its stock one to still buy on the dips.
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