The Magnificent 7 stocks – Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), Tesla (NASDAQ:TSLA) and Nvidia (NASDAQ:NVDA) – have been the darlings of Wall Street for the past few years. And for good reason – they have dominated their markets and delivered outstanding returns for investors. However, their meteoric rise has pushed their valuations into the stratosphere. As an investor, I believe it’s prudent to take some chips off the table and redeploy that capital into other promising tech stocks that have not yet received their time in the spotlight.
I will highlight seven terrific tech stocks that have been executing at a high level, but have mostly flown under the radar on Wall Street. Many of these stocks have the potential to generate triple-digit returns over the coming years. The best part? Most of these stocks can still be scooped up at reasonable valuations before the herd catches on. Let’s take a look!
Priority Technology (PRTH)
As a payments technology company, Priority Technology (NASDAQ:PRTH) is well-positioned to benefit from the inevitable rebound in lending and borrowing once interest rates are cut. The entire fintech space remains depressed from the post-pandemic cooldown, but companies like PRTH that partner with banks or facilitate lending have huge upside when activity picks back up.
Priority is already seeing promising progress on the financial front. Revenue grew 14% year-over-year in Q3 to $189 million, and the company is getting close to breakeven profitability. While any profits right now may not be sustained, analysts expect Priority to hit its stride in 2025 with solid earnings growth. Importantly, the company’s balance sheet is healthy enough to fund losses until profitability scales.
Yes, Priority’s hefty debt load of $623 million is a concern with rising rates. But as rates inevitably fall, payments on this debt will decrease considerably, leading to much stronger profitability and a higher stock price. I’m bullish on Priority Technology’s ability to thrive as fintech rebounds. The company has an excellent payment platform and lending exposure to capitalize on renewed borrowing activity.
Futu Holdings (FUTU)
Futu Holdings (NASDAQ:FUTU) has performed remarkably well as a digitalized brokerage platform, despite the recent market downturn. While the financial industry is still reeling from the post-pandemic hangover, companies like Futu will bounce back strongly once headwinds clear.
Case in point – Futu achieved a stunning 36% dollarized revenue growth in Q3 to $338 million, with net margins of 46%. The company continues growing its user base rapidly, even amid weakness in the Chinese market. Investors are returning in droves, with the S&P 500 hitting new highs and the Nasdaq poised to follow. When the Chinese market finally wakes up, I expect Futu’s growth to accelerate tremendously.
The stock has traded sideways for more than three years after its parabolic surge. But this consolidation sets the stage for an upside breakout as market sentiment improves. Futu has proven its resilience and ability to rapidly monetize its user base. Once China stimulates its economy, the company should see user growth re-ignite.
In short, the company is firmly profitable, with margins expanding, and its growth story is far from over. Futu still has substantial room for international growth, and the ability to cross-selling financial products beyond stock trading. I’m bullish on this long-term compounder.
RELX (RELX)
RELX (NYSE:RELX), a global analytics company, is firing on all cylinders with double-digit sales growth. The stock has surged 42% over the past year as fundamentals accelerated, but I think the company still has room to run as a premium quality business.
Specifically, RELX’s Exhibitions and Risk businesses have achieved stellar top-line growth of 32% and 8%, respectively, in the first nine months of 2023. Meanwhile, the company’s Scientific, Technical & Medical, and Legal divisions saw more modest but steady growth of 4%-6%.
RELX’s Exhibitions and Risk units will likely drive near-term gains as RELX continues leveraging its unrivaled data assets. However, all four business lines have strong competitive positions that enable pricing power and reinvestment into new verticals.
The company’s valuation looks rich at first glance. But for a high-quality compounder like RELX, growth investors are wise to pay up. RELX consistently delivers organic growth with 19%-plus net margins and rising cash flows. As analytics adoption increases across industries, RELX has an open runway for expansion.
TechTarget (TTGT)
TechTarget (NASDAQ:TTGT) operates an expansive network comprised of over 220 digital brands offering IT purchase intent data, research, and marketing services. Though shares currently sit around 70% off 2021 highs, the company’s recent combination with Informa’s digital business drastically expands TechTarget’s total addressable market by more than 10x.
Beyond merger benefits, the company continues to execute well, with double-digit earnings and revenue growth pace expected again in 2024. Compared to richly-valued SaaS peers, TechTarget’s growth suggests upside from reasonable sub-20x earnings multiples. Pro forma estimates call for the combined entity to generate over $500 million in 2024 sales, expanding to exceed $1 billion in annual revenue within five years on 35%+ EBITDA margins. This consolidation also brings 50 million unique visitors.
If TechTarget can successfully harness merged assets to drive engagement with IT decision-makers, immense shareholder value could be unlocked, given the integral role purchase intent data plays in capturing trillion-dollar global IT spending.
Bumble (BMBL)
Claiming the #2 spot for U.S. dating app downloads behind Tinder in 2023, Bumble (NASDAQ:BMBL) faces near-term headwinds like slowing user growth and leadership changes. However, the company’s long-term growth story remains intact. Bumble ranked ahead of Hinge. And its financials are strong, with high gross margins and double-digit revenue growth.
Still, Bumble must effectively manage costs and continue scaling its user base amid a competitive online dating market. Recent stock dilution also weighs on the company’s share price. However, I see a compelling bargain for long-term investors.
Revenue growth should average around 12% annually this decade. More importantly, Bumble’s earnings per share are expected to grow ffom 27 cents in 2023 to more than $1.45 in 2028. I believe Bumble deserves a higher premium, with profitability inflecting higher as online dating becomes normalized.
Challenges exist, but Bumble retains leadership in a secular growth industry. The path forward is clear – drive monetization and engagement through new features while optimizing marketing costs. I’m bullish on Bumble regaining momentum and delivering substantial upside from current depressed levels.
Opera (OPRA)
Delivering a unique web browser infused with messaging, crypto, and AI capabilities, Opera (NASDAQ:OPRA) continues to gain share by targeting younger demographics—especially gamers. Last quarter, Opera beat guidance, with sales up 20% year-over-year to $103 million on surging profitability metrics. New Opera GX Cloud subscriptions also recently launched.
Despite executing well into a $53 billion browser software market, the stock trades at a 58% discount to highs. It trades around 13-times forward earnings—presenting a compelling rebound opportunity as gamers plus smartphone users present adoption upside.
By integrating differentiated functionality like Twitch streaming and Discord messaging support, Opera’s ability to carve out enduring browser niche share seems continually underestimated to me. If conversion and monetization of its base exceeding 350 million users ramps successfully, material share price appreciation could follow over the long-term.
QuickLogic (QUIK)
As a small-cap semiconductor outfit developing embedded FPGA and edge AI solutions targeting high-potential markets like IoT and robotics, QuickLogic (NASDAQ:QUIK) finds itself strategically aligned with surging AI adoption trends. With earnings per share potentially tripling next year amid a nearly 100% revenue growth pace, the stock likely warrants a higher premium than the 36-times earnings multiple 2024 projections imply.
QuickLogic’s strengths in facilitating optimized AI inferencing on power-constrained endpoints perfectly position the company to enable the proliferation of AI use cases where data privacy and real-time responsiveness prove critical—a vital need in automation. With shares up over 131% in the past year on rapid adoption traction, I believe this undercovered name still seems significantly underestimated by the Street.
If the relentless focus on expanding its embedded FPGA IP capabilities boosts QuickLogic’s design win pipeline as projected entering 2024, immense shareholder value could be created given the immense TAM pursuing low-power AI innovation.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.