The technology industry is undergoing a rapid revolution to meet changing consumer demands. Enterprises are increasingly adopting digital technologies like cloud, data analytics, AI, and IoT to streamline processes and enhance efficiency. Further, the shift to remote work and surge in e-commerce led to robust demand for advanced tech solutions.
Given the industry’s rosy prospects, it could be wise to watch fundamentally strong tech stocks GigaCloud Technology Inc. (GCT), International Money Express, Inc. (IMXI), and AudioCodes Ltd. (AUDC) for a profitable portfolio in May.
With the rising adoption and investments in Generative AI (GenAI), global tech spending will likely remain robust and exceed previous levels. Gartner forecasts worldwide IT spending to total $5.06 trillion in 2024, reflecting an uptick of 8% from 2023. It also indicates an increase from the previous forecast of 6.8% growth.
Moreover, Gartner predicts IT services spending will increase 9.7% year-over-year to $1.52 trillion this year, and spending in other segments like devices and software will rise rapidly. Global IT services spending is further anticipated to hit a staggering $2 trillion by 2028, driven by financial services and manufacturing, managed services, and cybersecurity.
Increasing IT spending, growing adoption of SaaS, and rising cloud applications represent strong demand for tech services. With this, the IT services market is anticipated to grow at a CAGR of 8.4% during the forecast period (2024-2029), reaching $1.81 trillion by 2029. Trends like AI, 5G, blockchain, and IoT will likely fuel the market growth.
Further, government initiatives, increasing scalability, technological advancements, and product innovations poise the global optical communication systems and networking market for significant growth. The market size is projected to grow to $56.22 billion by 2030, expanding at a CAGR of 8.6%.
Moreover, investors’ interest in tech stocks is evident from the Technology Select Sector SPDR ETF’s (XLK) 14.5% returns over the past six months.
Given these encouraging trends, let’s delve deeper into the fundamentals of top tech stocks: GCT, IMXI, and AUDC.
GigaCloud Technology Inc. (GCT)
GCT provides end-to-end B2B e-commerce solutions for large parcel merchandise internationally. The company offers GigaCloud Marketplace, which integrates product discovery, payments, and logistics tools into one easy-to-use platform.
On April 4, 2024, GCT launched its industry-first service, “Branding-as-a-Service” or “BaaS,” which is designed to enhance the competitiveness of furniture suppliers, where the GigaCloud BaaS Program provides sellers access to a renowned furniture brand and allows them to offer high-quality products that resonate with consumers.
The company’s new offering will help drive the industry forward, bringing resources and products from various parties together to drive collective success.
On February 27, GCT announced that suppliers from new product origins in Colombia, Mexico, and Turkey joined its B2B e-commerce platform, GigaCloud Marketplace. This addition further diversifies the platform’s product offerings and optimizes global supply chain management.
GCT’s total revenues increased 96.5% year-over-year to $251.08 million for the first quarter that ended March 31, 2024. The company’s gross profit grew 125% from the year-ago value to $66.55 million. Its net income came in at $27.19 million, or $0.66 per ordinary share, indicating growth of 70.6% and 69.2% from the prior year’s quarter, respectively.
In addition, the company’s adjusted EBITDA rose 73.8% year-over-year to $34.50 million. Its total assets were $977.61 million as of March 31, 2024, versus $846.91 million as of December 31, 2023.
As per the business outlook for the second quarter of 2024, GCT expects its total revenues to be between $265 million and $280 million.
Street expects GCT’s revenue and EPS for the second quarter (ending June 2024) to increase 76.8% and 60% year-over-year to $270.70 million and $0.72, respectively.
Shares of GCT have surged 19.6% over the past month and 644.1% over the past year to close the last trading session at $39.14.
GCT’s solid prospects are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Growth, Momentum, Sentiment, and Quality. Within the Technology - Services industry, GCT is ranked #29 out of 77 stocks.
Click here to access additional ratings of GCT for Sentiment, Momentum, Quality, Growth, and Stability.
International Money Express, Inc. (IMXI)
IMXI operates as an omnichannel money remittance services company internationally. It offers remittance services and online payment options. The company also provides services by sending and paying agents and company-operated stores and through online and Internet-enabled mobile devices.
On April 9, IMXI announced the official relocation of its headquarters to the Datran Center in Miami-Dade, Florida. The move marks a key milestone for IMXI, representing its commitment to growth, and its expanding presence in South Florida.
On April 2, IMXI and FXC Intelligence, a premier source of data and insights for international payments, announced their strategic alliance. Under the partnership, FXC Intelligence will provide IMXI with its top-tier data through a pricing platform. This collaboration represents a significant step in enhancing global money transfer operations with cutting-edge data intelligence.
For the first quarter that ended March 31, 2024, IMXI’s total revenues increased 3.5% year-over-year to $150.41 million. Its operating income grew 4% from the year-ago value to $19.50 million. The company’s adjusted net income and EPS came in at $14.67 million and $0.43, up 3.5% and 13.2% from the prior year’s quarter, respectively.
In addition, the company’s adjusted EBITDA increased 5.5% year-over-year to $25.41 million, and net free cash generated during the period was $3.96 million.
According to the second-quarter 2024 guidance, IMXI expects revenue of $171.50 million to $176.80 million and adjusted EPS between $0.54 and $0.58. Also, the company’s adjusted EBITDA is expected to range from $31.70 million to $32.7 million.
For the full year 2024, IMXI expects revenue of $681 million - $701.8 million, and its adjusted EBITDA is expected to be between $124 million and $127.7 million.
Analysts expect IMXI’s revenue and EPS for the second quarter (ending June 2024) to increase 3.4% and 11.8% year-over-year to $174.88 million and $0.56, respectively. Moreover, the company has topped the consensus EPS estimates in three of the trailing four quarters.
IMXI’s shares have gained 2.5% over the past six months to close the last trading session at $20.02.
IMXI’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Sentiment. Within the Technology - Services industry, IMXI is ranked #20 among 77 stocks.
In addition to the POWR Ratings we’ve stated above, we also have IMXI ratings for Quality, Momentum, Growth, Value, and Stability. Get all IMXI ratings here.
AudioCodes Ltd. (AUDC)
Headquartered in Lod, Israel, AUDC offers advanced communications software, products, and productivity solutions for the digital workplace globally. The company provides solutions, products, and services for unified communications, contact centers, hosted business services, Voice.AI, and service provider businesses.
On March 25, AUDC and Tata Tele Business Services (TTBS) collaborated to deliver integrated voice calling for Microsoft teams under its Smartflo UCaaS (Unified Communication as a Service) product line. Under the collaboration, TTBS will use AUDC’s Live Platform for Microsoft Teams to provide Smartflo UCaaS.
The strategic collaboration with TTBS showcases AUDC's commitment to expand its presence and reach in the fast-growing Indian enterprise market. Its AudioCodes Live Platform and Voca solutions will simplify and accelerate the adoption of Microsoft Teams.
On March 13, AUDC announced that Voca Conversational Interaction Center (Voca CIC) is now an omnichannel contact center for Microsoft Teams supporting email and webchat in a one-screen Microsoft Teams contact center built in Azure. Adding omnichannel to Voca CIC further empowers AudioCodes Live, offering a complete calling and contact center for Microsoft Teams.
AUDC’s total revenues for the first quarter that ended March 31, 2024, increased 1.5% from the prior year’s quarter to $60.08 million, and its gross profit grew 5.8% from the year-ago value to $38.67 million. The company’s non-GAAP net income and non-GAAP EPS came in at $5.22 million and $0.17, up 94.7% and 112.5% from the prior year’s quarter, respectively.
Further, the company’s total current assets stood at $144.42 million as of March 31, 2024, compared to $142.66 million as of December 31, 2023.
Analysts expect AUDC’s EPS for the fiscal year (ending December 2024) to increase 16.2% year-over-year to $0.89, and its revenue is estimated to increase marginally year-over-year to $245.08 million for the current year. Moreover, the company surpassed the consensus EPS estimates in three of the trailing four quarters.
AUDC’s stock has plunged marginally over the past six months to close the last trading session at $9.88.
AUDC’s POWR Ratings reflect this robust outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
AUDC has a B grade for Value, Growth, and Quality. It has topped among the 47 stocks in the Technology – Communication/Networking industry.
Click here to access additional AUDC ratings for Sentiment, Momentum, and Stability.Top of Form
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GCT shares were trading at $36.68 per share on Thursday morning, down $2.46 (-6.29%). Year-to-date, GCT has gained 100.49%, versus a 9.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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