The 3 Best Tech Stocks to Buy in December
The holidays aren’t usually hot for tech stocks, except for well-known eCommerce companies like Amazon (NASDAQ:AMZN). However, that represents a buying opportunity for investors. Shoppers seek consumer discretionary and similar stocks for their holiday portfolio and leave quality tech stocks aside. This is making way for the best tech stocks to buy.
What’s more, 2024 is positioned to be a great year for tech stocks as economic pressure subsides. Likewise, the “best in class” tech companies made it through recent turbulence with only minor bruises. The losers among tech stocks either didn’t make it or are beaten down enough not to matter. Picking solid tech stocks for your portfolio today is easier than ever. Just look to ones that made it through 2022 intact. Better yet, some of those tech stocks remain undervalued as they haven’t caught up to broader market trends, although there’s little downside potential still present.
Fabrinet (FN)
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Fabrinet (NYSE:FN) is one of the best tech stocks to buy today, but one that’s critically overlooked in light of its importance to artificial intelligence. Supplying Nvidia (NASDAQ:NVDA) among other big-name tech stocks, Fabrinet manufactures and supplies companies with critical components for a range of tech applications. While its product scope is expansive, Fabrinet’s optical cable sector is particularly hot.
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The company makes ultra-high-speed fiber optic cabling that helps computers and hardware stacks communicate at more than 800 GB per second, which is more than 800 times faster than your typical household WiFi connection. Fabrinet supplies the cabling to Nvidia and other AI-centric companies to facilitate massive data transfers quickly. This portion of Fabrinet’s business comprises $500 million of its current revenue, with analysts projecting the operational income to more than double over the next few years.
Fabrinet shares spiked in August but have remained fairly flat since then. That represents a buying opportunity for investors seeking to continue AI’s winning streak in 2024.
PayPal (PYPL)
PayPal (NASDAQ:PYPL) hasn’t started riding the Santa Rally wave, as shares of the fintech stock remain about 10% below its mid-summer highs. However, though bearish sentiment abounds for this tech stock, there aren’t many material factors making PayPal a bad bet.
In the short term, PayPal stands to gain mightily from the growing buy now, pay later (BNPL) trend. The payment option lets users split expensive product costs into multiple smaller payments over a period of weeks or months. BNPL effectively acts as a very short-term loan, including interest, and holiday shoppers are hot on deferring costs for later. Some companies, like Affirm (NASDAQ:AFRM) built their entire operational model on the concept. However, PayPal remains the undisputed leader of BNPL.
From a longer-term perspective, PayPal remains the dominant payment processor online with 40% of the total market share. Payment processing tends to be a sticky enterprise. Customers offering or relying on a specific option don’t usually jump ship. This means PayPal has the distinct advantage as a first mover in the space. Existing customers tend to stick around. Despite its strength, shares trade at just 12 times earnings.
eBay (EBAY)
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eBay (NASDAQ:EBAY) stands to gain from two December trends: holiday shopping and New Year minimalism. The former, holiday shopping, clearly benefits eBay as a platform where customers can buy unique, rare, or one-of-a-kind items otherwise unavailable on popular eCommerce sites. However, the latter, New Year minimalism, isn’t usually top-of-mind. That’s although eBay’s January sales stats tend to spike in Q1 as people try to cut down on clutter by selling old and unwanted stuff.
eBay’s recent performance isn’t great and shares are about 50% below their 2021 highs. Despite the stock suppression, eBay stands to gain from renewed consumer confidence as inflation fades and recession fears abate. If the company can post a solid holiday sales report, shares of the eCommerce tech stock should shoot up substantially in 2023.
eBay’s AI tools should further accelerate its sales rate, too, as users can quickly and easily create listings en masse. If you’re willing to bet a bit on this top tech stock to buy, eBay could be the perfect stock to hold through 2024. This one easily earned its spot on our list of the best tech stocks to buy.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.
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