These Underrated Tech Stocks Get Little Attention Despite Their Long-Term Gains for Shareholders
Source: 98 Studio / Shutterstock.com
There are over 3,500 publicly traded companies in the United States today. Yet a handful of stocks garner all the attention from media, analysts, and investors. These are typically the mega-cap technology stocks that dominate the market and are responsible for the majority of its gains and losses. The spotlight tends to fall on companies like Apple (NASDAQ:AAPL) because they have a lot of influence over the direction of the market, unlike some under-the-radar tech stocks.
While it makes sense that the most influential stocks get the most attention, it also means that many blue-chip tech stocks are flying under the radar. That’s disappointing because many of these overlooked stocks are quietly rising and outpacing the returns seen in the broader market. Spotting these hidden gems can add big gains to a portfolio.
Here are three little-known tech stocks that have the potential to create millionaires.
Applied Materials (AMAT)
Source: michelmond / Shutterstock.com
Applied materials (NASDAQ:AMAT) does not get as much attention as it deserves. Companies such as Nvidia (NASDAQ:NVDA) use the microprocessor hardware maker’s components. Yet the company and its stock receive only a fraction of the media attention its customers get. This is largely because Applied Materials has been in business since 1967 and is considered the founding father of Silicon Valley.
Some of Applied Materials’ equipment is so old it’s housed in the Smithsonian Museum. Despite its age, Applied Materials continues to post strong financial results, and its stock is responding. For its fiscal second quarter, Applied Materials recently reported EPS of $2.09, which beat analysts’ consensus estimates of $1.99 per share. Revenue totaled $6.65 billion, topping Wall Street’s forecast of $6.54 billion.
Good results and optimistic forecasts continue to drive AMAT’s share price higher. Over the past 12 months, Applied Materials’ share price has increased by 67%.
Palo Alto Networks (PANW)
Source: Sundry Photography / Shutterstock.com
For under-the-radar cybersecurity action, watch Palo Alto Networks (NASDAQ:PANW). The company’s shares are up 18% this year, but they lag far behind gains seen in rivals such as Crowd strike (NASDAQ:CRWD), whose stock price has gained 57%. Palo Alto Networks’ big problem is that the company has repeatedly missed Wall Street forecasts.
More recently, Palo Alto Networks reported quarterly billings that fell short of analysts’ estimates, sending its stock down nearly 10%. The company’s fiscal third quarter billings were $2.33 billion, below analysts’ average estimate of $2.34 billion. U.S. analysts see the disappointing billings figure as a sign that companies are cutting back on cybersecurity solutions, which is creating headwinds.
Despite the short-term challenges, 38 Wall Street analysts who cover the company rate Palo Alto Networks stock as a “strong buy” and expect future gains.
Analog Devices (ADI)
Source: sdecoret / Shutterstock.com
As the materials applied, Analog devices (NASDAQ:ADI) is a semiconductor company whose stock is under the radar for most investors but is outperforming. So far in 2024, ADI stock is up nearly 20%. Over the past five years, the stock price has more than doubled. Additionally, like Applied Materials, Analog Devices continues to post strong quarterly results that support its stock price.
In May, Analog Devices reported earnings of $1.40 per share for its fiscal second quarter, beating analysts’ forecasts of $1.26. Revenue was $2.16 billion, topping expectations of $2.11 billion. The company, which makes semiconductors used in data conversion and signal processing, attributed the strong results to increased orders and demand for its products, particularly in the automotive and industrial sectors.
Analog Devices raised its forecast for the second quarter of the year, calling for revenue of $2.27 billion, plus or minus $100 million. Analysts had expected revenue of $2.16 billion for the fiscal third quarter. ADI stock also pays a quarterly dividend of 92 cents, giving it a yield of 1.60%.
As of the date of publication, Joel Baglole held long positions in AMAT and NVDA. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
As of the date of publication, the responsible editor did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
