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While the debate over the possibility of a recession grabs business headlines, investors may still want to look ahead and buy breakout tech stocks. These businesses have experienced some of the most groundbreaking innovations of our time, fostering potentially permanent relevance.
Fundamentally, the tech stocks to buy benefit from the natural progression of human society. After all, businesses will continue to get bigger and stronger whether or not a recession actually occurs. In some ways, then, particular tech stocks may be safer than you initially think.
On the technology front, several breakout tech stocks worth buying suffered big losses last year. While the deficit presents short-term challenges, buying flagging tech stocks now could yield big gains later in the long run. If you’re willing to weather the storm, here are some of the best innovative companies.
Intuitive Surgery $259.72
Rockwell Automation $290.54
NuScale Power $10.88
Source: Ralf Liebhold/Shutterstock
The support of most breakthrough technology stocks related to semiconductors, ASML (NASDAQ:ASML) may not be a household name. However, it plays an invaluable role in the wider field of innovation. Specifically, the company specializes in extreme ultraviolet (EUV) lithography, making machines that print designs on silicon wafers. ASML enjoys a monopoly in this area and cannot be replaced.
To be fair, potential investors won’t get a great deal on ASML stock right now. Business Rated Fair Valuation based on Gurufocus.com’s proprietary calculation of Fair Market Value (FMV). That said, the company has a solid balance sheet and strong operating attributes.
For example, its three-year revenue growth rate of 23.8% outperformed nearly 80% of its peers. On top of that, ASML has a net profit margin of 25.91%. This statistic is higher than 87% of industry players. Perhaps most importantly, Wall Street analysts view ASML as a consensus and unanimous Strong Buy. ASML is easily one of the tech stocks to buy as hedge fund sentiment is very bullish.
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Although perhaps best known for its video games and blockchain-centric graphics processing units, Nvidia (NASDAQ:Nvidia) to demonstrate its power in several relevant sectors. One of them centers on autonomous driving. Through research and development in advanced sensors, artificial intelligence, and machine learning protocols, Nvidia is slowly making autonomous mobility a reality.
According to Strategic Market Research, the global autonomous vehicle market will be valued at $25.14 billion in 2021. Experts predict that this segment will reach USD 196.97 billion by 2030, with a compound annual growth rate (CAGR) of 25.7%. Based on Gurufocus.com’s proprietary FMV calculations, it estimates that NVDA is a moderately undervalued investment. Objectively speaking, the company has an Altman Z-score of 17.09, indicating enormous balance sheet resilience. Additionally, Nvidia is benefiting from excellent revenue and earnings metrics.
Currently, Wall Street analysts rate NVDA a consensus Strong Buy. Even better, hedge fund sentiment was overwhelmingly positive making it one of the best breakthrough tech stocks to buy .
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A steady hand in the field of innovation, Microsoft (NASDAQ:Microsoft Corporation) is one of the breakout tech stocks to buy in almost any situation. However, the software (and hardware) giant has been flexing its muscles lately.Specifically, Microsoft’s commitment to open artificial intelligencethe company responsible for chatbot platform ChatGPT.
There are concerns that ChatGPT will disrupt businesses related to search engines, and anything involving online tutoring services. I haven’t mentioned names here, but you can follow the above link for more information. Either way, the possibility that Microsoft could end up merging into the broader Internet search ecosystem has made its rivals suspicious.
Another factor driving MSFT’s growth centers on its overall value proposition. With a strong balance sheet, consistent growth, and an extremely profitable business, Microsoft is a compelling idea to buy among tech stocks. Currently, Wall Street analysts rate MSFT a consensus Strong Buy. Likewise, hedge fund sentiment was very positive.
Intuitive Surgery (ISRG)
Easily one of the most innovative tech stocks in the broader healthcare industry, intuitive surgery (NASDAQ:ISRG) is known worldwide for its da Vinci robotic surgical system. Intuitive provides countless opportunities for superior patient outcomes and helps improve the accuracy of medical procedures. Likewise, its minimally invasive approach may result in reduced hospital stays, resulting in cost savings.
According to Grand View Research, the global medical robotics system market will reach $16.1 billion in 2021. Experts expect the segment to grow at a double-digit CAGR to reach $76.4 billion in annual revenue. Given that ISRG shares have fallen more than 14% over the past year, this volatility could provide a long-term discount opportunity.
ISRG is rated Moderately Undervalued, based on Gurufocus.com’s proprietary FMV calculations. Objectively speaking, the company offers an overall value proposition. First, it has zero debt on its books, making it incredibly flexible. Second, it boasts stellar operating statistics, such as double-digit revenue growth and industry-disrupting profitability metrics.
Not surprisingly, ISRG has a unanimous Strong Buy. That’s because, over the long run, you won’t find too many great tech stocks to buy.
On the face of it, tax and accounting software providers, intuition (NASDAQ:Ying Tu) doesn’t sound like one of the innovative tech stocks to buy. However, I’ve been bashing INTU for its impact on the gig economy.
Essentially, expectations for work have changed due to the pivot to remote work during the coronavirus pandemic. However, businesses have started calling back employees, ending the work-from-home experiment. Of course, worker bees generally don’t like this. Personally, I believe most people will conform because the gig lifestyle is haphazard unless truly talented.
Still, many would give up their suits and ties for any job they could find. However, gig workers (better known as independent contractors) must file a “business” tax return. Long story short, they are much more complicated than filing employee taxes. So Intuit can help make it very relevant. Also, a great bonus is that Wall Street analysts rate INTU a consensus Strong Buy. You already know my opinion. It’s easily one of the best tech stocks around.
Rockwell Automation (Korea)
From buying unintuitive tech stocks to easily identifiable tech stocks, Rockwell Automation (New York Stock Exchange:skirt) deserves additional consideration. As the name suggests, Rockwell specializes in industrial automation solutions. South Korea, while very important, also ran into some pitfalls last year. South Korea, however, is up more than 8% so far this year.
It has a good chance of going higher in the chart. According to Grand View Research, the global industrial automation and control systems market size reached a valuation of USD 172.26 billion. Experts there predict that the sector will grow at a CAGR of 10.5% to reach $377.25 billion in revenue by 2030. Naturally, Rockwell will be a major beneficiary, making it one of the tech stocks to buy.
To be fair, this isn’t the best deal. However, investors should take encouragement from its healthy balance sheet and growth metrics. Additionally, Rockwell’s net margin of 13.6% is better than most of its peers. Finally, hedge fund sentiment on South Korea rates is positive, which suggests you should be watching it closely.
NuScale Power Supplies (SMRs)
Source: T. Schneider / Shutterstock.com
Summarizing this list of tech stocks to buy is one of my favorite topics of discussion, NuScale power supply (New York Stock Exchange:Single NMR). NuScale is a nuclear energy solutions provider focused on small modular reactors (SMRs). While NuScale itself wasn’t a completely new innovation, it effectively opened up the commercial viability of the platform in the US. Given the energy crisis we’re grappling with, SMR could head higher in the next few years.
Now, SMRs are notable because they essentially represent a decentralized network of small nuclear facilities. The framework enables NuScale to build nuclear power facilities closer to sources of energy demand. In addition, the SMR includes advanced safety protocols to provide operational assurance for nearby residents.
For an ambitious company, NuScale’s financials aren’t strong. That said, the company has no debt on its books, which is rare for a newly public company.
While analysts are generally optimistic about SMR, tip ranking, no Wall Street expert has weighed in on the stock in the past three months. However, for those who like to buy low-key tech stocks, this could be a good thing.
On launch day, Josh Enomoto Do not have (directly or indirectly) any position in securities mentioned herein. The views expressed in this article are those of the author and governed by InvestorPlace.com Publishing Guidelines.
Josh Enomoto is a former senior business analyst at Sony Electronics where he helped broker major contracts with Fortune Global 500 companies. Over the past few years, he has provided unique and important insights into the investment market and various other industries including legal, construction management and healthcare.
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