A low stock price isn’t always a bad thing: it’s like a clearance sale at your favorite store.
Just because a stock is cheap doesn’t mean it’s a failure. Sometimes the company had a bad quarter or maybe there’s a market panic that’s unrelated to its performance. In some cases, the long-term opportunities available to a small company aren’t recognized by Wall Street. For savvy investors, a low stock price can be a chance to buy a solid company at a discount.
So while others are fleeing, you might be getting a bargain. Remember, it’s all about buying low and selling high, not following the crowd. Speaking of which, here are two top tech stocks that are really low.
Both of these stocks are actually good values that are betting on the current boom in artificial intelligence (AI). Buying a few of these cheap stocks today should serve you well in the long run — and stubs are really affordable.
SoundHound AI: $3.93 per share
AI-Based Voice Control Expert AI SoundHound (NASDAQ: SOUN) The company has had its ups and downs in recent times, but its long-term potential remains promising. Specializing in voice and conversational intelligence technologies, this small company is well positioned to thrive as demand for these services grows.
There’s reason to be optimistic. The company has a large long-term order book worth $682 million, giving it a clear path to future revenue. If you ignore this crucial metric, SoundHound AI looks quite expensive given its $50.8 million in outstanding sales. That would be a mistake in the long run.
Additionally, strategic moves such as paying down its long-term debt and acquiring key assets of the Allset online ordering platform demonstrate SoundHound AI’s commitment to growth and innovation. And don’t forget that the order book is growing by leaps and bounds. The first quarter figure is 80% higher than the same period last year. In other words, SoundHound AI has built a strong and growing pipeline of long-term contracts that will translate into real revenue streams over the next few years.
With a solid $180 million cash reserve and no debt, SoundHound AI is well-positioned to seize new opportunities. The company isn’t profitable yet, and its valuation ratios may seem high, but its massive (and growing) order book and a series of strategic initiatives point to a bright future. At just $3.93 per share, SoundHound AI offers an attractive investment opportunity if you’re willing to take a chance on this innovative AI player.
UiPath: $12.96 per share
Robotic Process Automation (RPA) Specialist Access path (NYSE: PATH) had a tough year, with its stock down 48% in 2024. Despite this negative sentiment from Wall Street, the company remains a key player in RPA, integrating AI technologies into its service offerings.
RPA is a software technology that automates repetitive and routine tasks usually performed by humans, improving efficiency and accuracy. Despite its name, it rarely uses actual robots. While not strictly an AI company, UiPath uses AI to enhance its software capabilities, such as data mining and understanding legal documents.
UiPath’s recent stock price drop is largely due to a mixed first-quarter earnings report. While earnings and revenue beat analyst consensus targets, the company’s annualized revenue renewal rate (ARR) hit the low end of its forecast, at $1.51 billion. Additionally, UiPath cut its full-year ARR guidance to $1.66 billion from $1.73 billion. That’s a poor read on the automation expert’s contract-based recurring revenue stream.
The unexpected resignation of CEO Rob Enslin, replaced by co-founder Daniel Dines, further unsettled investors, sending the stock price down 34% in a single day. Executive shakeups are rarely good news, though I don’t mind a company founder taking the wheel again.
However, the sale seems overblown. UiPath’s long-term outlook remains strong, with the global RPA market expected to grow from $3 billion in 2023 to $31 billion by 2030. UiPath is well positioned to capture a significant share of this growing market, starting with just $1.35 billion in revenue. As you can see from UiPath’s 45% share of the current RPA market revenue opportunity, I’m talking about an established leader in this growing sector.
UiPath’s fundamentals are strong. The company has a solid $1.9 billion cash reserve with no debt, allowing management to make strategic investments or acquisitions to accelerate revenue growth. Additionally, its free cash flow jumped 39% year over year to $101.3 million in the first quarter of 2024. UiPath is delivering cash by the truckload.
Given the current low valuation and significant market opportunity, UiPath presents an attractive investment opportunity. For investors willing to absorb some volatility initially, the potential for long-term gains makes UiPath a tech stock to consider today.
Should You Invest $1,000 in SoundHound AI Right Now?
Before you buy SoundHound AI stock, consider this:
THE Motley Fool, Securities Advisor The team of analysts has just identified what they believe to be the 10 best stocks Investors Should Buy Now…and SoundHound AI Wasn’t One of Them. These 10 Stocks Could Deliver Monstrous Returns in the Years to Come.
Consider when Nvidia I made this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $786,046!*
Securities Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building advice, regular analyst updates and two new stock picks each month. Securities Advisor the service has more than quadrupled the return of the S&P 500 since 2002*.
See all 10 actions »
*Stock Advisor returns as of July 2, 2024
Anders Bylund holds positions at SoundHound AI. The Motley Fool holds positions at and recommends UiPath. The Motley Fool has a disclosure policy.
2 Top Tech Stocks Under $20 Per Share was originally published by The Motley Fool
