The 3 Most Undervalued Tech Stocks to Buy Now: August 2023
The personal consumption expenditures (PCE) price index advanced 2.6% in Q2 2023, which is down from 4.1% in the first. Core PCE inflation demonstrates a persistent decline, and it excludes unpredictable fluctuations in food and energy costs for a more refined gauge to asses. Economists have highlighted heightened worker productivity levels, with Dean Baker from the Center for Economic and Policy Research noting a 2.5% expansion in the value of non-farm businesses. This expansion in GDP subsequently fosters increased investment rates due to a rise in consumer product consumption, and these three undervalued technology stocks are what consumers are missing. These stocks have high long-term growth potential through partnerships and key product offerings in the industry.
Luminar Technologies (LAZR)
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Luminar Technologies (NASDAQ:LAZR) is a leading provider of LiDAR solutions for highway vehicle autonomy and assisted driving. LAZR stock is up 46% YTD. 11 analysts predict the 12-month price forecasts for LAZR to have a median target of $12.00, with a high estimate of $20, or a minimum 88.68% upside.
The automotive technologies market share is expected to grow at a 10.68% CAGR to $51.8 million from 2021 to 2026. The demand for LiDAR solutions and autonomous driving boosts growth for the automotive industry.
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Luminar reported Q2 2023 revenue of $16.20 million which grew 63.08% YoY. Revenue growth is at 102.94% CAGR which is 1484.16% greater than the sector median of 6.5%. The company is uniquely positioned to score deals with other original equipment manufacturers (OEMs) compared to its competitors.
Luminar is in the automotive technology industry, executing the rapid development of LiDAR solutions to complete autonomous driving vehicles from companies. Luminar has recently partnered with Plus, a global provider of fully autonomous driving solutions, to advance automated driving and safety systems for commercial vehicle manufacturers. This company will be the exclusive provider of long-range lidar for PlusDrive, assisting software for commercial vehicle OEMs. This is a unique business value for the future of automated driving systems, and Luminar is constantly innovating this at the forefront of its industry.
Given Luminar’s key partnerships in producing autonomous systems in the forward-looking LiDAR market, LAZR is one of the most underrated tech stocks for growth-oriented investors.
Accenture (ACN)
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Accenture (NYSE:ACN) is an Irish-American corporation that advises and solves business problems through IT SaaS and consultants. Accenture was rated within the top 250 Fortune Global 500 company rankings.
The company boasts strong financials. $16.5 billion in Q2 revenue has beaten analyst expectations by $81.4 million and is predicted to grow at a 10.2%. Strong profitability indicators include a 15.3% EBIT margin and a $9.9 billion cash from operations well beyond sector medians. Lastly, management makes intelligent investments through a 13.9% levered FCF margin, 30.6% ROCE, and a 22.3% ROTC.
Accenture has gained vital partnerships this year that bolster its IT services. One of which is with Google Cloud to integrate security-focused generative AI into its cybersecurity services for cloud-to-cloud security. Accenture also announced collaborations with AWS, Microsoft, and Google to meet customer demand for AI-related services, such as releasing model training platforms and business function optimization.
Additionally, Accenture has acquired Strongbow Consulting to improve its Technology Strategy and Advisory division in North America. Moreover, Accenture has also acquired Nextira, a cloud-based service company with offerings in AI, ML, and data analytics, allowing Accenture to improve its cloud services. Lastly, Accenture acquired Objectivity, a company specializing in cloud and platform engineering, to further improve its cloud and platform modeling services for consumers.
Yahoo! Finance has 21 analysts predicting a 12-month price target of $293.00 to $380.00, with a mean price of $337.95. ACN is a technology stock to buy in August because of its strong financials, key partnerships, and more mentioned above.
Lam Research (LRCX)
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Lam Research (NASDAQ:LRCX) is a leading supplier of equipment and services to the semiconductor industry. LRCX stock is up 25.72% YTD. Yahoo! Finance reports 23 analysts having a 12-month mean price target of $671.22, spanning from $309.00 to $800.00.
The global semiconductor market is forecasted to grow at a 12.2% CAGR from $573.44 billion in 2022 to $1,380.79 billion by 2029.
Owning one of the most advanced and standard chip technologies gives Lam Research a monopoly. Partnering with renowned institutions such as IIT and FRC, Lam Research products are costly to improve. In the first quarter of 2023, Lam Research reported revenue of $3.87 billion, net income of $814 million, and a levered FCF margin of 22.29%. These income metrics are all high and growing YoY, driving profitability for the company in the long term.
Despite facing inflation, Lam Research’s growth prospects are vital as it is still a robust contender due to its microcontroller advancements. Its consistent pursuit of improvement in emerging areas, such as its current focus on the ALTUS Product Family to form features such as contacts, vias, and plugs, showcases dedication to staying updated for consumers. Lam Research also showcases the potential to grow in different regions, as the company recently expanded into India to advance India’s semiconductor workforce. In turn, this will be a winner in the long term, as more of an international consumer base will be using Lam Research’s products and services.
LRCX is highly undervalued and stands out in today’s market. With a bright future, LRCX is a solid option for those seeking long-term investments for the reasons mentioned above.
On the date of publication, Michael Que did not have (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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.
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