The technology industry is one that has long garnered investor interest, and for good reason. Technological innovation has changed the way we do just about everything.
While the dot com days are well behind us, technological innovation hasn’t stopped. As new technologies continue to emerge, opportunities are popping up in the space left and right.
Here are a few highly undervalued tech stocks that are presenting hard-to-ignore opportunities:
Roku (ROKU): A Battered Stock Creating A Compelling Opportunity
Roku has become a leading brand in the television boxes and dongles industry, controlling a 39% share of the market. It’s closest competitor is Amazon (AMZN), which controls about 30% of the boxes and dongles market.
Nonetheless, September proved to be a rough month after Comcast announced that it would be offering free streaming boxes for its internet customers. Since boxes and dongles represent such a large portion of the company’s revenues, investors fear that a free option would cut down on sales, leading to declining performance.
Nonetheless, these fears are likely overblown, and for multiple reasons. First and foremost, there are a few caveats that come with getting the free streaming video box from Comcast. Customers must have the company’s xFi Advanced Gateway modem for the streaming Flex box to work.
Not to mention, the customers that have cable packages will likely have to change them. To qualify for the new box, customers must cancel existing premium channels and repurchase them, adding to the cost of adoption. So, I don’t believe that the free Flex box from Comcast will have any meaningful impact on Roku sales.
On top of that, Roku has started a transition of monetizing its ecosystem through ad revenue. This is a smart move, and the timing couldn’t be more perfect. After all, even if we saw a moderate slowing in the growth of Roku dongle and box sales, a new stream of ad revenue would offset the declines.
All in all, with overblown fears leading to tremendous declines as of late, Roku is presenting an opportunity that should not be ignored.
Summit Wireless (WISA): The Roku Of Home Sound
Roku largely revolutionized the video streaming space. With the ability to plug in a box and connect apps, allowing for streaming entertainment, consumers flooded to this new option, driven by simplicity and user-friendliness.
However, as the way we consume video content has changed, the way we hear the audio associated with this content seems to be stuck in the stone ages. However, Summit Wireless (WISA) is leading the charge in the evolution of home sound.
Until very recently, if consumers wanted to enjoy high-quality immersive sound, they had to purchase the system, drill holes and run wires, or hire an expert to install the system. Ultimately, the convoluted, expensive process led the average household to avoid investing in immersive sound.
Summit Wireless’ patented technology is changing the game. With WiSA enabled devices and WiSA Ready sound systems, consumers now have the ability to set up an immersive sound experience in a matter of minutes and at a reasonable price.
Importantly, the company’s patented technology nearly eliminates latency, an issue that makes Bluetooth surround systems less practical than you might think. In fact, the lack of latency has led to an incredible rise of adoption.
Today, the company boasts 60+ brands in the WiSA membership, 7 of which are television manufacturers. Not to mention LG will be making all of its OLED and NanoCell televisions WiSA Ready ahead, making the WiSA logo, the only third party logo outside of HDMI that will be seen on the edge of these high-end televisions.
With rapid growth taking place, and brands like LG, Harman (a Samsung Division), Klipsch, Savant, Enclave Audio, Axiim and several others including WiSA compatibility in their newest product lines, tremendous growth is likely ahead, making this an opportunity that’s hard to ignore.
The bottom line here is simple. Summit Wireless is the owner and the technology behind the rapidly growing industry interoperability standard WiSA. Unfortunately, the stock has been oversold. Their technology and WiSA is being built into products by LG, Kkipsch, Harman by Samsung and many more. Specifically, LG’s OLED and Nano-cell TVs have been certified WiSA Ready. LG will ship between 7-10 million TVs this year worldwide. Beginning this month, WiSA certified speakers will be available at retail to attach with the LG TVs.
With the LG/WiSA products having been delayed for 6 months, the stock sold off 80%. Now that products are arriving at retail, I believe that the stock will soon begin an upward recovery!
Nvidia (NVDA): A Front Runner In AI
Artificial Intelligence is a hot topic of conversation these days. The technology is driving driverless cars, predicting movement in the stock market, and changing the way we find information with personal assistants built into cell phones.
Although the space is too young to say who the long-term leader might be, Nvidia seems to be well ahead of its competition. For me, a big part of the value in Nvidia has to do with the value of its Cuda Software.
Analysts at RBC Capital estimate that more than a million engineers are currently using the software to drive their development. Considering that the software provides a user-friendly platform centered around high-speed computing for the AI space, this user base is only likely to grow.
It’s also worth mentioning that Nvidia is a big player in the gaming space. The company’s GeForce product is starting to roll out on Android devices. Not to mention that its drivers, processors and all-out gaming computers are considered the top of the line in the gaming space.
Unfortunately, the stock has seen some pressure over the last six months. However, with the company’s advancements in artificial intelligence and leadership in high-end gaming hardware, the company has a very bright future ahead.
Splunk (SPLK): A Data-Driven Company Presenting A Compelling Opportunity
Big data is a very big thing these days. Data is making AI possible, it’s making advertising more effective, it’s changing how we predict storms, save on energy, and more. However, data means absolutely nothing if the data can’t be turned into solutions. That’s where Splung (SPLK) comes in.
Splunk produces software for searching, monitoring and analyzing machine-generated big data. So, the company has essentially built a business around turning data into answers through a web-style interface.
The company provides a Machine Learning Toolkit that acts as a guided workbench. Through the Toolkit, data can be used to create and test flexible models that can handle just about any use case you throw at it.
Importantly, the company’s products can be applied seamlessly to real-time machine data. This real-time capability improves troubleshooting, enhances marketing, and can provide answers for its users that were previously unavailable.
Perhaps, that’s why analysts have an average rating of “Strong Buy” with an average price target represents a potential upside of more than 25%. These analysts are onto something and this stock is well worth watching.
Micron Technology (MU): A Highly Valuable Portfolio In Memory
No, I’m not talking about human memory here. Micron Technology’s (MU) claim to fame is in its DRAM/NAND memory portfolio. As mentioned above, all future trends in technology seem to surround data, an area in which Micron is perfectly positioned.
Due to incredible advancements in artificial intelligence, augmented reality, virtual reality and autonomous driving, significantly higher memory capabilities are a must today and ahead. This is exactly what Micron Technology’s NAND and DRAM products are built around.
Importantly, we may be looking at a great entry point. The month of October hasn’t been a great month for the stock, leading many to make the undervalued argument. Not to mention, analysts seem to carry a positive opinion on the stock.
At the moment, analysts are rating MU with an average rating of “Moderate Buy.” The average price target on the stock sits at $55.23, representing a potential upside of more than 23%.
As technological innovation leads to cars that speak to each other, computers that can answer questions like never before, and virtual reality experiences only seen in movies in the past, the demand for stronger options in memory will only grow. Micron Technology is on the leading edge of innovation in this space, making it a stock that’s hard to ignore.
Technology is an interesting space that is known for creating incredible opportunities for investors. While the dot com era is far behind us, technological innovation continues to reshape how we do just about anything. Those leading the charge in innovation within the various niches of tech are likely to become long-term household names, generating compelling profits for investors. In my view, the stocks above represent these types of opportunities.
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Disclosure – Alpha Stock News is not an investment advisor or broker dealer. CNA Finance, parent company to Alpha Stock News has a monetary relationship with Summit Wireless.