The technology sector surged in 2024, fueled by advancements in Artificial Intelligence (AI), quantum computing, network technology, and other innovations. As we look ahead, rapid and groundbreaking developments are set to unfold, promising another extraordinary year of progress and transformation in the industry.
Amid this backdrop, investors could scoop up shares of fundamentally stable technology stocks, Nokia Oyj (NOK), Xerox Holdings Corporation (XRX), and Gilat Satellite Networks Ltd. (GILT). All three stocks are valued at less than $10 and offer ample opportunities to capitalize on the growth prospect of the technology industry.
AI unquestionably emerged as the most popular tech advancement last year, and its momentum shows no signs of slowing down. In the coming years, AI is poised to make significant contributions to the economy, driving efficiency, cost-effectiveness, and innovation across businesses and industries.
As President-elect Trump prepares to take office, discussions around AI regulations and its usage are gaining momentum. With a forward-looking stance on AI, anticipated government investments in advancing this technology could lead to significant growth, unlocking vast potential and driving innovation across the sector.
Coupled with an already announced $100 million investment in accelerating research and development in AI technologies focused on sustainable semiconductor materials by the Biden Administration, these investments reflect the government’s commitment to innovation and highlight the potential of the tech industry.
Apart from AI, the sector has also made significant advancements in quantum computing, enabling fast solutions to complex problems, 5G technology that offers faster -than-ever connectivity solutions for businesses, as well as edge computing that enhances data processing efficiency.
So, let us dive deep into the fundamentals of three undervalued tech stocks, starting with #3.
Stock #3: Nokia Oyj (NOK)
Based in Espoo, Finland, NOK delivers mobile, fixed, and cloud network solutions. It offers fiber and copper-based access infrastructure, in-home Wi-Fi solutions, IP networking solutions, and more. The company operates through four segments: Network Infrastructure; Mobile Networks; Cloud and Network Services; and Nokia Technologies.
On January 3, 2025, NOK announced the conclusion of the sale of Alcatel Submarine Networks (ASN), a leading submarine networks business, to the French State, represented by the Agence des participations de l'Etat. This move enables Nokia to sharpen its focus on core markets, channeling its Network Infrastructure portfolio toward growth opportunities.
On December 20, 2024, NOK achieved a groundbreaking milestone by implementing quantum-safe IPsec network cryptography for mobile subscribers in partnership with Turkcell, a leading digital operator in Türkiye.
The innovation reinforces NOK’s leadership in the networking industry and fortifies mobile networks against future quantum computing threats, ensuring enhanced security for tomorrow's challenges.
In terms of forward non-GAAP P/E, NOK is trading at 12.49x, 51.1% lower than the industry average of 25.54x. Likewise, the stock’s forward Price/Book and forward Price/Cash flow multiples of 1.09 and 10.58 are 74.8% and 50.7% lower than their respective industry averages of 4.30x and 21.45x.
For the fiscal third quarter that ended September 30, 2024, NOK’s net sales came in at €4.33 billion ($4.48 billion). Its operating profit increased 3.8% year-over-year to €246 million ($254.83 million).
Additionally, the company’s profit and EPS for the period rose 31.6% and 50% from the prior year’s quarter to €175 million ($181.28 million) and €0.03, respectively.
Analysts expect NOK’s revenue for the fiscal year that ended December 2024 to come in at $19.84 billion. Its EPS for the same period is expected to increase 12.7% year-over-year to $0.36.
Shares of NOK have surged 18.4% over the past six months and 34.5% over the past year to close the last trading session at $4.56.
NOK’s POWR Ratings reflect its strong fundamentals. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
NOK has an A grade for Value and a B for Growth and Momentum. Within the B-rated Technology - Communication/Networking industry, NOK is ranked #6 out of 45 stocks.
In addition to the POWR Rating highlighted above, you can check NOK’s ratings for Stability, Sentiment, and Quality here.
Stock #2: Xerox Holdings Corporation (XRX)
XRX is a workplace technology company that integrates hardware, services, and software for enterprises. It functions through two segments: Print and Other; and FITTLE. The company offers document systems, solutions, IT and software products and services, workplace solutions, and more.
On December 23, 2024, XRX announced an agreement to acquire Lexmark International, Inc., from Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre for a transaction value of $1.5 billion. The acquisition strengthens the company’s capabilities in advancing the print industry and positions XRX to drive long-term profitable growth and serve its clients.
On November 14, 2024, XRX announced to be an official global partner of Aston Martin Aramco Formula One® Team. The multiyear partnership could enhance the company’s global reach in empowering businesses to accelerate their digital transformation journey with cutting-edge solutions.
In terms of forward non-GAAP P/E, XRX is trading at 7.58x, 70.3% lower than the industry average of 25.54x. Additionally, its forward EV/Sales and forward Price/Sales multiples of 0.68 and 0.17 are 81.2% and 95.1% lower than the industry averages of 3.49x and 3.36x, respectively.
For the fiscal 2024 third quarter that ended September 30, XRX’s total revenues came in at $1.53 billion. Its adjusted operating income increased 17.6% year-over-year to $80 million. Moreover, XRX’s adjusted net income and adjusted EPS amounted to $34 million and $0.25, respectively.
Street expects XRX’s revenue and EPS for the fiscal year ending December 2025 to increase 2.8% and 12.2% year-over-year to $6.36 billion and $1.22, respectively.
XRX’s shares surged marginally intraday to close the last trading session at $8.41.
XRX’s robust prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
XRX has a B grade for Growth, Value, and Momentum. It is ranked #30 out of 78 stocks within the Technology - Services industry.
To access XRX’s Quality, Stability, and Sentiment ratings, click here.
Stock #1: Gilat Satellite Networks Ltd. (GILT)
With its headquarters in Petah Tikva, Israel, GILT provides satellite-based broadband communication solutions. The company has three segments: Satellite Networks; Integrated Solutions; and Network Infrastructure and Services. Its portfolio includes cloud-based satellite network platforms, amplifiers, modems, transceivers, and more.
On December 30, 2024, GILT secured over $18 million in orders for IFC solutions. Aimed for Gilat SkyEdge platforms, related services and SSPAs, these orders could enhance the company’s market presence in equipping service providers with the scalability and performance and boost its revenue.
On October 30, 2024, GILT received contracts valued at approximately $5 million from multiple U.S. based defense organizations. These contracts bolster GILT’s offerings, mainly its cutting-edge SATCOM technology in meeting the stringent requirements of mission-critical defense operations.
In terms of forward non-GAAP P/E, GILT is trading at 13.41x, which is 47.5% lower than the industry average of 25.54x. The stock’s forward Price/Sales ratio of 1.12x is 66.6% below the industry average of 3.36x. Also, its forward EV/EBITDA multiple of 5.81 is 62.7% lower compared to the industry average of 15.59x.
For the fiscal 2024 third quarter that ended September 30, GILT’s revenues increased 16.7% year-over-year to $74.61 million. Its non-GAAP gross profit rose 2.7% from the year-ago value to $28.44 million. The company’s non-GAAP operating income grew 22.6% from the prior year’s quarter to $8.27 million.
Additionally, non-GAAP net income and non-GAAP EPS increased 19.4% and 16.7% year-over-year to $8.14 million and $0.14, respectively.
The consensus revenue and EPS estimates of $82.74 million and $0.17 for the fiscal fourth quarter that ended December 2024 exhibit a year-over-year rise of 9.4% and 183.3%, respectively.
GILT’s shares have surged 32.4% over the past three months and 50.2% over the past six months to close the last trading session at $6.70.
GILT’s sound fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
GILT has an A grade for Sentiment and a B for Growth, Value, and Momentum. GILT has topped the 45-stock Technology - Communication/Networking industry.
Click here to access GILT’s ratings for Stability and Quality.
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NOK shares . Year-to-date, NOK has gained 2.93%, versus a 1.58% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
3 Affordable Tech Stocks with Big Upside in 2025 StockNews.com
