Here are seven high-octane tech stocks to buy in May: These companies are on a fast pace of growth thanks to strong fundamentals and innovative business models that promise long-term profits for investors.
On the rise S&P 500 and Nasdaq As the index generally indicates robust market conditions, investors should look for tech stocks that can take advantage of these trends. The three companies highlighted in this article stand out for their ability to overcome challenges and capitalize on broader market opportunities.
The strengths of these companies, including accelerating revenue growth and profitability, suggest they are well positioned to thrive. Investors should consider these high-potential stocks rather than sticking to broad ETFs, especially as they predict the AI boom will drive big advancements in the tech sector for some time to come.
So here are seven high-octane tech stocks to buy this month.
High-octane tech stocks to buy: Coinbase (COIN)
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Coinbase (Nasdaq:coin) has been particularly benefiting from the surge in cryptocurrency prices. Bitcoin (BTC-USDThe company's return to profitability and the growing popularity of cryptocurrency trading position it well for future growth.
Coinbase shares have risen by nearly 300%, confirming the company's strong position in the digital asset market. The approval of a Bitcoin spot ETF has supported this growth.
In the first quarter of 2024, Coinbase reported significant financial improvement, with revenue increasing 122% from the same period in 2023 to $1.64 billion, and net income reaching $1.18 billion, in contrast to a loss the previous year.
Coinbase remains optimistic about the future: the company expects institutional investment in Bitcoin to continue and is hopeful that favorable macroeconomic conditions and regulatory developments will support the long-term adoption of the cryptocurrency.
COIN is one of my top picks for the year and I believe the company's potential is only just beginning to be seen.
Meta Platform (META)
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Meta Platform (Nasdaq:Meta) has shown particularly remarkable growth, increasing 25% year-on-year (Year-on-year change) Fourth-quarter revenue rose by $40.11 billion as the company focuses on improving efficiency, cutting costs and strengthening its AI technology.
This strong performance was driven by a positive shift in advertising prices and strong growth in online commerce advertising. Higher advertising prices marked the first return to growth since the fourth quarter of 2021, fueled by significant contributions from China-based advertisers.
The company plans capex of $30-37 billion in 2024, primarily in AI and non-AI hardware and data centers. The investments are intended to support long-term AI research and product development efforts. The growth is supported by the successful implementation of cost control strategies and increased monetization efforts through features such as Reels and WhatsApp Channels.
We recommend META as a stock to watch as it may be one of the more undervalued names in the stock market for active investors.
High-octane tech stock to buy: Qualcomm (QCOM)
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Qualcomm (Nasdaq:QCOM) plays a key role in the expansion of 5G networks and mobile technology. Despite the recent slowdown in mobile phone sales, the company has a strong position in the 5G market and a solid dividend yield, making it an attractive long-term investment.
For the second quarter of 2024, Qualcomm reported better than analysts' expectations, with revenue of $9.4 billion and non-GAAP EPS of $2.44. The growth was driven by increased sales of mobile phones and automotive chips. Although gross margins declined slightly, the company's financial performance remains strong.
Looking to the future, Qualcomm has set ambitious growth goals. The company expects its QCT division to achieve a mid-teen compound annual growth rate (CAGR) and maintain operating margins of more than 30% through fiscal year 2024. Additionally, Qualcomm expects its automotive division's revenue to grow to approximately $3.5 billion in five years and $8 billion in 10 years.
Advanced Micro Devices (AMD)
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Advanced Micro Devices (Nasdaq:AmAMD continues to grow its market share in the semiconductor industry thanks to strong performance in the data center and client segments. In the first quarter of 2024, AMD reported revenue of $5.5 billion, up 2% year over year. The company also achieved non-GAAP gross margins of 52% and net income of $123 million.
Looking ahead, AMD has an optimistic outlook for 2024, expecting second-quarter revenue to reach approximately $5.7 billion, representing 6% growth year-over-year. This positive forecast is driven by increasing demand for the company's high-performance computing products.
The company's focus on edge AI with its Ryzen product line puts it in a good position to dominate this emerging market, with CEO Lisa Su predicting the AI accelerator market will reach $400 billion by 2027, which would represent nearly 300% growth from this year.
AMD is a great alternative to: NVIDIA (Nasdaq:NVDAThat's because the company's valuation is much lower than that of the microchip giants.
High-Oct Tech Stocks to Buy: Shopify (SHOP)
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Shopify (New York Stock Exchange:shop) remains a leader among e-commerce platforms, driven by strong revenue growth and recent profitability.
In the fourth quarter of 2023, Shopify reported that its revenue grew 24% to $2.1 billion. The company also achieved free cash flow of $905 million, compared to negative free cash flow of $186 million a year ago, which marked a significant turnaround.
Shopify expects first quarter 2024 revenue growth to be in the low 20s percent year over year, which translates to mid- to high-20s percent growth after accounting for the impact of the sale of its logistics business. First quarter gross margin is expected to increase approximately 150 basis points compared to fourth quarter 2023.
SHOP is one of my favorite stocks for investors looking for tech stocks to capitalize on. Despite these positive metrics, Shopify shares fell after it provided weaker than expected free cash flow guidance for 2024. I believe SHOP should be on investors' radar for the long term.
Coupang (CPNG)
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Coupang (New York Stock Exchange:CPNG) is expanding into new areas like travel and food and beverage. Despite a big decline from its IPO price, analysts are forecasting solid earnings and sales growth, and their average expected price target of $26.67 suggests a 19.2% upside potential from the current price.
Coupang's diverse services include grocery delivery Rocket Fresh, restaurant ordering and delivery Coupang Eats, and online content streaming Coupang Play. These services, supported by over 100 fulfillment centers across Korea, have significantly increased customer engagement.
Financially, Coupang has consistently reported positive cash flow. Over the past four quarters, the company has achieved operating cash flow of $2.6 billion and free cash flow of $1.9 billion. This positive financial performance is further highlighted by gross profit increasing 27% year over year to $1.6 billion.
CPNGs may be a good option for investors looking to diversify their portfolios outside the U.S. because they are essentially Amazon (Nasdaq:Amazon)of.
Lee Auto (LI)
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Lee Auto (Nasdaq:LeeChinese EV maker () showed impressive growth, with sales increasing 271% last quarter. Tesla (Nasdaq:TSLAThe company plans to launch the 2023 EV hybrid in China in October 2023, and its hybrid EVs have captured a large market share in China. The company delivered 80,400 vehicles in the first quarter of 2024.
Additionally, the company is evolving its autonomous driving technology and plans to roll out AD Max 3.0 with full-scenario autonomous driving capabilities and enhanced safety systems.
Financially, Li Auto has consistently reported positive cash flow, with free cash flow of $1.8 billion in the third quarter of 2023. The company also achieved gross margins of 25.3% and adjusted EBITDA margins of 3.9%.
Chinese brand EVs like Li's are likely to continue to do well despite President Biden's recent tariffs on these companies. Asia is quickly becoming a market hotspot and we feel it will continue to grow in the future.
As of the date of publication, Matthew Farley does not hold (either directly or indirectly) any positions in the securities mentioned in this article. Opinions expressed are those of the author and follow InvestorPlace.com's publication guidelines.
