Tech stocks have been a remarkably slow performer in 2022. The Technology Solutions Sector SPDR ETF (XLK), a technology-focused exchange-traded fund, is down 28.4% and the S&P 500 is down 7.8%. this year to December 22.
Wall Street analysts forecast the fall in technology stocks to continue this year. They expect prices to rise sharply in 2023 as companies struggle to maintain profitability and the Federal Reserve ends its hike.
The expected revival of the sector is due to the ongoing digital transformation and the impressive long-term growth prospects of technology companies such as DecisionPoint Systems DPSI, Airgain AIRG and Kaleyra KLR . The rapid adoption of cloud computing and the integration of AI and machine learning are key drivers of growth.
In addition, the growing demand for e-commerce, contactless drone delivery, and digital payments shows the urgency of developing 5G networks.
Meanwhile, blockchain, IoT, smartphones, autonomous vehicles, storage solutions, AR/VR and wearables, network and connectivity solutions: Wi-Fi as well as integrated Wi-Fi/Bluetooth SOCs and the need for high-speed data. speed in networks and Information centers offer great opportunities for growth.
Despite the challenges of the current recession, there are still plenty of reasons to be pessimistic about the future of the tech sector. The META meta-platform, Amazon AMZN, Microsoft and Alphabet are already working to cut costs and protect margins to weather what big banks and economists see as an impending recession. The cuts included thousands of tech workers laid off in recent weeks, including layoffs at Meta and Amazon.
While a downsizing strategy can damage an employer's reputation and employee morale, it's important to consider the often necessary need for lean businesses to stay afloat during tough times.
our choices
Given the benefits above, we selected three tech stocks that have strong fundamentals and are well positioned for growth in 2023. The full list of today's #1 Zacks stocks can be found here.
According to the methodology developed by Zacks, stocks with such a perfect match offer solid investment opportunities.
While these stocks are trading below $10 and may be more volatile than their more expensive counterparts, strong earnings estimates and a positive valuation for the latter suggest near-term momentum.
In addition, these stocks have an average broker rating (ABR) of <=2. ABR shows the calculated average and future potential of the security on a scale of 1 to 5 (strong sell to strong buy).
The following graph shows the evolution of the prices of our three selections since the beginning of the year.
Performance since the beginning of the year
Image Source: Zacks Investment Research
DecisionPoint offers enterprise mobility and radio frequency identification technologies. Revenue performance is driven by broad-based strength across multiple industries amid global supply chain disruption. In addition, the company's strong relationships with OEMs and dealers are striking.
Integrations resulting from acquisitions can improve DecisionPoint performance. The company completed two acquisitions, Advanced Mobile Group and Boston Technologies, in early 2022. These acquisitions will strengthen the company's position in the lucrative mail order and drop shipping industries.
Additionally, in October 2022, the company completed the rebrand from Exten Data Solutions to DecisionPoint Systems. The company was acquired by DecisionPoint Systems in December 2020. The acquisition helps DecisionPoint expand its regional presence in the Rocky Mountain and Southwestern regions of the United States. The group of government and professional services is expanding. ExtenData's mobile tracking supply management platform has brought a new SaaS-based subscription revenue stream to DecisionPoint.
DecisionPoint has a rank no. 1 zacks and a VGM score and is currently trading at $8.08 and has a 2-day ABR, indicating a 19.4% year-over-year increase.
Caleira provides mobile communication services to financial institutions, e-commerce players, OTT players, software companies, logistics service providers, healthcare providers, retailers, and other large organizations around the world. With its proprietary platform and powerful APIs, it manages integrated multi-channel communication services including messaging, IM and rich messaging, video, push notifications, email, voice and chatbots in more than 190 countries at all levels. 1 US carrier
Caleira has a Zacks Rank of #2 and a VGM Score of A. It is currently trading at 68 cents and has an ABR of 2, indicating a 39.8% YoY gain over the past 30 days.
Ergen offers integrated wireless solutions in the form of antenna products. These products are equipped to meet the critical communication needs of the design process and work environment in the corporate, automotive, and consumer markets.
Ideal for OEMs and designer manufacturers, aftermarkets, chip vendors, service providers, value-added resellers, and software developers around the world, customizable antennas solve both indoor and outdoor communication challenges.
AirGain has a Zacks ranking of #2 and has a VGM score that is currently trading at $6.45 and has an ABR of 2.0 days indicating 14.1% year-over-year growth.
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Amazon.com, Inc. (AMZN) - Free Stock Research Report
DecisionPoint Systems Inc. (DPSI) - Free Stock Research Report
Airgain Inc (AIRG): Free Inventory Analysis Report
Kalera, Inc. (KLR): Free Stock Research Report
Meta Platforms, Inc. (META) - Free Stock Research Report
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