The tech sector has left a bad taste in investors’ mouths this year as a 13-year bull run has not ended. Since last November, the market has started to turn from previously high-flying tech stocks to more defensive consumer-oriented ones, heavy on technology. Nasad 100 It’s off more than 25% by 2022. It’s been in official bear market territory since at least May.
Although the index has rallied a few times since then, investors are reluctant to buy any cheap tech stocks that are relevant to the direction the economy is headed. Again, this could be wrong.
You may not find the absolute lowest price to buy right now, but that’s a game of chance, not skill, and waiting for the perfect price, and losing it when the market turns, will hurt your returns. Over the past 20 years until the end of 2021, the stock market has risen by an average of 9.5% per year, but missing just 10 of the best days means your returns will be cut in half, to just 5.3% per year.
Many quality technology companies are now selling at prices and prices not seen in years. The following pair of growth tech stocks will also reward patient investors with impressive returns in the coming years to help mitigate future market downturns.
The market doesn’t like semiconductor giants. Intel (INTC 1.39%) The stock has tumbled 43 percent this year as it struggles to bring new chip technology to market. It is investing jointly with Brookfield Infrastructure Partners Up to $30 billion worth of new manufacturing facilities. And spending more than $100 billion globally on new factories — which could consume most of Intel’s free cash flow until they come online — may be worrying the market.
The recent inflation report did not help matters either; Because the price of everything but a gallon of gas was much higher than expected last month. That means the Federal Reserve will keep its foot on the interest rate pedal, paying another 75 basis points when it next meets. Higher interest rates will increase the cost of capital for tech companies using new financing to grow, creating more uncertainty in the tech industry.
Intel, however, has been trading at more than 15 years of revenue and sales. This is too cheap to ignore. The service it’s building with Brookfield is expected to generate $15 billion in cumulative revenue over the next few years. With a dividend yield of 5% at recent prices, this semiconductor stock should be considered one to buy and hold for years.
Nivea (NVDA 2.08%) It’s not a stock you’ll find on many hit lists this year, or, as the stock has been doing poorly, down 55% this year and 62% from last November’s peak.
Like Intel, the gaming chip maker has been suffering from the general economic crisis and reports of persistent inflation, but from the world of cryptocurrencies, there were concerns about what the outcome would be. EthereumA successful merger will soon be available for sale.
Navia chips were often used to perform the verification during the working period, but integration will now be the stakeholders performing stock verification, and the Navia chips may not be the ones used for this purpose. That’s why the chipmaker’s gaming business has been strong for so long. People weren’t just playing video games, many were often verifying Ethereum transactions.
However, Nvidia still has a big growth runway ahead of it from its data center business, which recently overtook gaming as the company’s biggest revenue generator. Second-quarter revenue reached $3.8 billion, a 61 percent increase over last year. And as businesses continue to move their data to the cloud and need data centers to store it, they’ll see NVIDIA sales continue to climb.
Nvidia’s dividend yields a modest 0.1%, and its multiples aren’t as historically low as Intel’s, but with Wall Street still expecting the chipmaker to grow earnings 23% over the next five years, the stock is discounted enough. Make it one to buy and hold for a long time.
Rich Duprey has no position in the mentioned stocks. He has positions in the Motley Fool and recommends Ethereum, Intel and Nvidia. Motley Fool recommends shares of Brookfield Infra Partners LP and Brookfield Infrastructure Partners and recommends the following options: long Jan 2023 $57.50 calls on Intel and short Jan 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policy.