The thriving global technology industry is driven by widespread cloud adoption and pandemic-accelerated digital transformation. Against this scenario, investors could consider investing in top tech stocks Alps Alpine Co., Ltd. (APELY), Outbrain Inc. (OB), and Quantum Corporation (QMCO) for this week's gains.
The growth in the tech sector, fueled by breakthroughs in generative AI, sparked a significant tech rally last year. A whopping 38.7% increase in the NASDAQ Composite over the past year indicates significant growth and positive performance in the tech sector. This suggests confidence from investors and reflects optimism about the future of technology companies.
Moreover, cloud computing services, particularly from major players, are instrumental in setting the stage for an anticipated $800 billion spending wave on AI initiatives over the next decade.
On top of it, Wedbush analyst Dan Ives believes that tech will have a dominant year in 2024 and have the biggest transformation in 30 years as companies push investments in AI and integrate digital transformation across business models.
In addition, the tech hardware is staring at some hefty prospects. The global consumer electronics market is propelled by smartphone proliferation and technological advancements, notably in smart devices. Smartphones dominate revenue, while tablets show robust growth with innovation, and desktops decline due to a shift towards portable devices.
The global consumer electronics market is expected to grow at a CAGR of 6.6% from 2023 to 2030.
Furthermore, the global Device as a Service (DaaS) market gains momentum through subscription models, embracing cloud adoption and pandemic-driven advantages like timely upgrades and scalability alignment. The global DaaS market is anticipated to expand at a CAGR of 29.1% from 2023 to 2030.
Considering these conducive trends, let’s examine the fundamentals of the three tech stock picks.
Alps Alpine Co., Ltd. (APELY)
Based in Tokyo, Japan, APELY is a global electronic components manufacturer offering TACT switches and sensors for consumer, industrial, and automotive markets, along with related services. The company products include worker monitoring systems and customized automotive solutions.
On November 23, 2023, APELY released the AirInput™ Panel 15.6-Inch Wide X-Y Type, integrating touchless and touch input through advanced capacitive sensing. Designed for hygiene-sensitive environments, the panel offers intuitive mid-air control and proximity sensing, with plans for further product expansion in medical systems and non-contact switches.
During the second quarter, which ended September 29, 2023, APELY reported net sales of ￥475 billion ($3.30 billion), up 4.6% year-over-year. The company's operating income and profit attributable to owners of parent stood at ￥10.60 billion ($73.57 million) and ￥6.70 billion ($46.50 million), respectively.
As of September 2023, its total assets amounted to ￥786.60 billion ($5.46 billion), compared to its assets of ￥736.90 billion ($5.11 billion) as of March 2023.
Street expects APELY’s revenue and EPS to grow 57.7% and 66.6% year-over-year to $6.72 billion and $1.37, respectively, for the fiscal year ending March 2024. The company surpassed the revenue estimates in each of the trailing four quarters, which is remarkable.
APELY’s shares have gained 1.6% over the past three months to close the last trading session at $16.82.
APELY’s POWR Ratings reflect its positive prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
APELY has an A grade for Value and a B for Momentum and Stability. Within the B-rated Technology - Electronics industry, it is ranked #9 among 41 stocks.
In addition to the POWR Ratings stated above, one can access APELY’s additional Growth, Sentiment, and Quality ratings here.
Outbrain Inc. (OB)
OB globally operates a recommendation platform, Outbrain Engage, offering media partners data-driven recommendations and ad solutions. The platform includes a dashboard for content management and supports diverse ad formats, enabling effective content monetization.
On September 26, 2023, OB and DoubleVerify Holdings, Inc (DV) partnered to integrate DV's pre-bid tools into OB's Onyx platform, bolstering brand suitability and fraud prevention for impactful advertising. Onyx is set to leverage DV Marketplace Suite to optimize supply quality, ensuring a trusted environment for advertisers.
In the third quarter ended September 30, 2023, OB’s revenue grew marginally from the previous-year quarter to $230.01 million. The company's adjusted net income and net income per share amounted to $272 million and $0.01, respectively, compared to its prior-year quarter's adjusted net loss and net loss per share of $5.50 billion and $0.10. Moreover, its adjusted EBITDA increased 508.1% year-over-year to $10.25 million.
OB’s revenue is expected to grow 5.8% year-over-year to $994.13 million for the fiscal year ending December 2024. Its EPS for the same year is expected to be $0.08.
The stock has gained 3.8% over the past year and 4.1% over the past month to close the last trading session at $4.11.
OB’s POWR Ratings reflect this sound outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has an A grade for Growth and Value and a B for Sentiment. Within the Technology - Services industry, it is ranked #13 of 77 stocks.
Click here for OB’s additional Momentum, Stability, and Quality ratings.
Quantum Corporation (QMCO)
QMCO globally delivers storage solutions like Myriad All-Flash and StorNext Hybrid Flash/Disk Software for video and unstructured data management. With services including customer support and Quantum-as-a-Service, the company also engages in partnerships for comprehensive video surveillance data solutions.
On December 12, 2023, MR Datentechnik, a German IT solutions provider, implemented QMCO's ActiveScale™ for the MR S3 Storage Service, achieving rapid growth and surpassing two-year targets in under a year.
The service offers scalable and cost-effective data storage with seamless S3 compatibility, leveraging ActiveScale's stability and automation for streamlined customer onboarding and future service expansion.
During the fiscal first quarter, which ended June 30, 2023, QMCO reported a total revenue of $91.79 million. The company generated non-GAAP gross profit and adjusted EBITDA of $35.18 million and $771 thousand, up 2.1% and 122.8% year-over-year, respectively. Its non-GAAP operating costs decreased 2.3% from the previous-year quarter to $35.45 million.
For the full fiscal year 2024, the company anticipates revenues of $360 million, with adjusted EBITDA expected to be approximately $17 million.
Analysts expect QMCO’s revenue to grow 4.7% year-over-year to $373.57 million for the fiscal year ending March 2025. Its EPS for the same period is expected to be $0.08.
QMCO’s shares have gained 11.8% over the past month to close the last trading session at $0.31.
QMCO’s robust outlook is reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
It has a B grade for Value. Within the B-rated Technology - Hardware industry, it is ranked #16 among 39 stocks.
To see QMCO’s additional POWR Ratings for Growth, Momentum, Stability, Sentiment, and Quality, click here.
What To Do Next?
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APELY shares were trading at $17.47 per share on Friday afternoon, up $0.65 (+3.87%). Year-to-date, APELY has gained 3.07%, versus a -1.63% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
3 Top-Rated Tech Stocks to Buy Poised for New Year Gains This Week StockNews.com
