These obscure tech stocks are flying under the radar despite the long-term benefits they represent for shareholders.
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There are currently over 3,500 publicly traded companies in the United States. But only a handful of stocks capture the attention of media, analysts, and investors. These tend to be the mega-cap tech stocks that dominate the market and account for the majority of its gains and losses. These companies include: apple (Nasdaq:AAPL) have a greater impact on market direction than lesser-watched tech stocks.
Naturally, the most influential stocks get all the attention, but that also means there are plenty of great tech stocks out there that aren't getting the attention they deserve. This is unfortunate, because many of these ignored stocks have quietly risen and outperformed the returns seen in the overall market. Finding these hidden gems could bring big benefits to your portfolio.
Here are three under-the-radar tech stocks that could create millionaires.
Applied Materials (AMAT)
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Applied Materials (Nasdaq:Amato) has received little of the attention it deserves. NVIDIA (Nasdaq:NVDA) uses parts from the microchip equipment maker. But the company and its stock receive only a fraction of the media attention its customers get. That's mainly because Applied Materials has been around since 1967 and is considered a Silicon Valley founder.
Some of Applied Materials' equipment is so old that it's on display in the Smithsonian Institution. Despite its age, Applied Materials is still doing well, and its stock price is responding accordingly. Applied Materials recently reported second-quarter earnings of $2.09 per share, beating analysts' consensus estimate of $1.99 per share. Revenue of $6.65 billion beat Wall Street expectations of $6.54 billion.
Strong operating results and a bullish future outlook have kept AMAT's stock price rising: Over the past 12 months, Applied Materials' shares have risen 67%.
Palo Alto Networks (PANW)
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Looking for some under-the-radar cybersecurity stocks? Palo Alto Networks (Nasdaq:Pan WThe company's shares are up 18% this year, far behind the gains of its competitors. Crowdstrike (Nasdaq:CRWD) shares rose 57%. Palo Alto Networks' big problem is that the company has repeatedly missed Wall Street expectations.
Just recently, Palo Alto Networks announced that its quarterly revenue fell short of analysts' expectations, causing its stock price to fall by about 10%. The company's third-quarter revenue was $2.33 billion, below the average analyst estimate of $2.34 billion. U.S. analysts see the disappointing revenue as a sign of declining corporate spending on cybersecurity solutions, which is a headwind for the company.
Despite the short-term challenges, 38 Wall Street analysts covering the company rate Palo Alto Networks shares a “strong buy” and see future upside.
Analog Devices (ADI)
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Like Applied Materials, Analog Devices (Nasdaq:Analog Devices) is a semiconductor company that flies under the radar of most investors, but is still performing well. ADI shares are up nearly 20% so far in 2024. Over the past five years, the stock has more than doubled. And like Applied Materials, Analog Devices continues to post strong quarterly results that support its stock price.
In May of this year, Analog Devices reported second-quarter EPS of $1.40, beating analysts' average estimate of $1.26. Revenue was $2.16 billion, beating expectations of $2.11 billion. The company, which makes semiconductors used in data conversion and signal processing, attributed the strong performance to increased orders and demand for its products, particularly in the automotive and industrial sectors.
Looking ahead, Analog Devices raised its guidance for the second quarter of this year, saying it now expects revenue of $2.27 billion, plus or minus $100 million. Analysts had expected third-quarter revenue of $2.16 billion. Analog Devices shares also pay a quarterly dividend of 92 cents a share, giving the company a dividend yield of 1.60%.
As of the publication date of this article, Joel Bagrol held long positions in AMAT and NVDA. Opinions expressed in this article are those of the author and follow InvestorPlace.com's publication guidelines.
On the date of publication, the editor in charge did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
