In this piece, we will take a look at the 13 most promising tech stocks according to analysts. If you want to skip our coverage of the latest developments in the technology industry, then you can skip the introduction and take a look at the 5 Most Promising Tech Stocks According to Analysts.
The technology industry is arguably the one of the largest and most important in the world. Tech powers up millions of gadgets everyday and has a presence in both industries and personal use. Its rise has also been over a short time period when compared to other big sectors such as crude oil.
2023 has also been the year of tech stocks in an environment plagued by rapid interest rate hikes by the Federal Reserve. The year started out with widespread uncertainty about the future of the stock market and the economy, since record high inflation had spurred the Fed to rapidly increase interest rates. Investors were worried that excessive tightening would tip the economy into a recession, and they adjusted their bets accordingly by taking money out of risky technology stocks and into safer assets such as the U.S. dollar and gold.
However, the massive popularity of ChatGPT, the world's first generative artificial intelligence model made available for public use, flipped the conversation. Suddenly, no one wanted to miss out on the potential of A.I. to disrupt the world just like the smartphone had a little over a decade ago. This optimism was reflected in big technology stocks, as Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), and Meta Platforms, Inc. (NASDAQ:META) all soaring.
Now, with the year coming to an end, the technology industry of today has come quite far from where it stood at the start of the year. While A.I. has been the talk of the town, several other sectors have also injected fervor amongst investors. One report that often lists emerging technology trends before they make it to the public sphere is the Gartner Strategic Technology Trends Report. For 2023, this list shares more technology trends than just A.I. For instance, one sector that Gartner believes carries the potential to transform how businesses deal with risk is the Digital Immune System. This rather interesting sector is a self evaluating software that monitors a firm's broader software environment to make sure any bug or security related downtimes do not affect customer experience.
Apart from the Digitial Immune System, also included are artificial intelligence and the metaverse which we've talked about in a lot of detail (you can check out 12 Best Artificial Intelligence (AI) Stocks To Buy According to Hedge Funds and 11 Most Promising Metaverse Stocks To Buy According To Hedge Funds). These are met by technology sectors called Superapps and Industry Cloud Platforms. Both are already offered by several companies, and their popularity also depends on geography. When it comes to Superapps, they are more common in Asia. Two of the most popular Superapps in Asia are offered by Tencent Holdings Limited (OTCMKTS:TCEHY) and Grab Holdings Limited (NASDAQ:GRAB). These allow users a one stop shop for all of their needs such as booking transportation, ordering groceries, or sending money. A Superapp being a hot technology is really unintuitive since the significant computational power offered by even a mid tier smartphone today is put to good use by allowing the user to do nearly everything with their device.
So, with 2023 heading to a close, we decided to take a look at the most promising technology stocks according to analysts. Some notable picks are SoundHound AI, Inc. (NASDAQ:SOUN), AST SpaceMobile, Inc. (NASDAQ:ASTS), and Aehr Test Systems (NASDAQ:AEHR).
13 Most Promising Tech Stocks According to Analysts
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Our Methodology
To make our list of the most promising technology stocks according to analysts, we ranked all technology companies with a market capitalization greater than $300 million by the average analyst share price percentage upside. Out of these, the stocks with the highest upside were chosen. For these stocks we have also mentioned hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
13 Most Promising Tech Stocks According to Analysts
Shoals Technologies Group, Inc. (NASDAQ:SHLS) is a renewable energy technology company that makes and sells equipment used in solar, battery, and other power generation systems. A well diversified business model that sees the firm target several high growth sectors at once has helped it on the financial front. Shoals Technologies Group, Inc. (NASDAQ:SHLS) has beaten analyst EPS estimates in all its four latest quarters, and the shares are rated Buy on average with an average share price target of $25.47.
33 out of the 910 hedge funds part of Insider Monkey's database had held a stake in Shoals Technologies Group, Inc. (NASDAQ:SHLS) as of September 2023 end. Out of these, the firm's biggest hedge fund shareholder is Todd J. Cantor's Encompass Capital Advisors as it owns 4.4 million shares that are worth $80.3 million.
Along with AST SpaceMobile, Inc. (NASDAQ:ASTS), SoundHound AI, Inc. (NASDAQ:SOUN), and Aehr Test Systems (NASDAQ:AEHR), Shoals Technologies Group, Inc. (NASDAQ:SHLS) is a promising technology stock according to analysts.
Stem, Inc. (NYSE:STEM) provides hardware and software products that are used in energy storage systems. Despite the considerable hype that the firm has generated with its A.I. energy products, unlike Shoals Technologies Group, Inc. (NASDAQ:SHLS), it has struggled to meet analyst estimates when it comes to bottom line profits. However, Stem, Inc. (NYSE:STEM)'s third quarter earnings saw it tout a strong $676 million in bookings, adding to the 34% annual revenue growth which it exhibited during the quarter.
For the same third quarter, 16 out of the 910 hedge funds covered by Insider Monkey's database were the firm's shareholders. Stem, Inc. (NYSE:STEM)'s largest investor in our database is Jos Shaver's Electron Capital Partners due to its $21.1 million investment.
Vimeo, Inc. (NASDAQ:VMEO) is a collaborative software as a service (SaaS) company that enables users to work and contribute remotely. The growth in remote work following the global shift in the wake of the coronavirus pandemic has boded well for the company. It has beaten analyst EPS estimates in all four of its latest quarters and maintained momentum despite the departure of its top executive in August.
Insider Monkey compiled and analyzed data from 910 hedge fund SEC filings covering 2023's third quarter. This revealed that 28 were Vimeo, Inc. (NASDAQ:VMEO)'s investors, out of which Joshua Kushner's Thrive Capital held the largest stake worth $20.7 million.
Xperi Inc. (NYSE:XPER) is a hardware company that provides entertainment subscription services as well as hardware products. It is headquartered in San Jose, California, and its shares have been quite turbulent this year. After the market peaked during H1 2023, Xperi Inc. (NYSE:XPER)'s shares proceeded to tanked 37% by October 2023 close. However, the shares have gained 24% since then, due to a massive rise in value in the aftermath of its third quarter results. Year to date, the stock is up a respectable 20%.
As of Q3 2023 end, 14 out of the 910 hedge funds tracked by Insider Monkey had invested in Xperi Inc. (NYSE:XPER).
Materialise NV (NASDAQ:MTLS) is an additive manufacturing and 3D printing company that provides 3D engineering, manufacturing, and software services to customers on several continents. The firm's shares are rated Strong Buy on average, with the only coverage during 2023 coming from Lake Street. JPMorgan last rated the shares in October 2022 when it cut the share price target to $16 from an earlier $28. Materialise NV (NASDAQ:MTLS)'s financial performance saw it grow revenue 3.2% annually during its third quarter, with net profit jumping by a strong 143%.
By the end of this year's third quarter, six out of the 910 hedge funds covered by Insider Monkey's research had bought and owned the firm's shares. Materialise NV (NASDAQ:MTLS)'s biggest hedge fund shareholder in our database is Catherine D. Wood's ARK Investment Management courtesy of its $9.5 million investment.
EchoStar Corporation (NASDAQ:SATS) is a satellite company whose subsidiaries are among the largest satellite internet broadband internet providers in the U.S. However, the subsidiaries HughsNet and EchoStar are facing breakneck competition from SpaceX's Starlink low Earth orbit (LEO) internet constellation, whose lower distance from the surface provides for faster and cheaper internet coverage in densely and non densely populated areas.
After digging through 910 hedge fund portfolios for 2023's third quarter, Insider Monkey discovered 25 EchoStar Corporation (NASDAQ:SATS) shareholders. David Alexander Witkin's Beryl Capital Management was the biggest investor among these since it owned 2.1 million shares that are worth $36 million.
Aviat Networks, Inc. (NASDAQ:AVNW) is a networking hardware provider that caters to the needs of government agencies and companies alike. Amidst a corporate borrowing environment marred with high interest rates, the firm took the plunge in December 2023 when it expanded its operational scale by acquiring a wireless transportation business.
As of September 2023 end, 17 out of the 910 hedge funds part of Insider Monkey's research had invested in the firm. Aviat Networks, Inc. (NASDAQ:AVNW)'s largest hedge fund shareholder is Chuck Royce's Royce & Associates due to its $20.1 million investment.
Bitdeer Technologies Group (NASDAQ:BTDR) is a Singaporean cryptocurrency company that mines and sells Bitcoin whose digital operations allow it to have a presence in 200 countries. A product of the special purpose acquisition company (SPAC) mania after the COVID 19 pandemic, its shares have only recently returned to the pre merger levels after hopes of lower interest rates regenerated investor appetite for riskier assets and securities.
During Q3 2023, just two out of the 910 hedge funds covered by Insider Monkey's survey had bought and owned Bitdeer Technologies Group (NASDAQ:BTDR)'s shares.
SoundHound AI, Inc. (NASDAQ:SOUN), Bitdeer Technologies Group (NASDAQ:BTDR), AST SpaceMobile, Inc. (NASDAQ:ASTS), and Aehr Test Systems (NASDAQ:AEHR) are some promising tech stocks according to analysts.
