Technology stocks got off to a bumpy start due to investors’ concerns over looming interest rate hikes this year. However, the industry is expected to benefit from the increased adoption of hybrid work structures worldwide and digitization across most industries. According to IDC, global spending on digital transformation is expected to reach $2.80 trillion in 2025, more than double the amount allocated in 2020.
The technology industry is evolving rapidly, with companies diving into emerging spaces like the 5G, quantum computing, artificial intelligence, and metaverse. IDC projects that the technology industry is on pace to exceed $5.30 trillion in 2022.
Given the solid long-term growth prospects of the industry, we think under-$10 tech stocks Nokia Corporation (NOK), ASE Technology Holding Company Limited ADR (ASX), LG Display Company Limited ADR (LPL), and GoPro, Incorporation - (GPRO) could be ideal additions to your watchlist.
Nokia Corporation (NOK)
Headquartered in Espoo, Finland, NOK is a leading mobile and fixed network solutions provider worldwide. The company operates through four segments: Mobile Networks; Network Infrastructure; Cloud and Network Services; and Nokia Technologies.
On January 27, NOK and Nordic Semiconductor announced that companies purchasing IoT hardware from Nordic will now be able to acquire licenses to Nokia’s industry-leading portfolio of cellular patents, simplifying the Standard Essential Patent (SEP) licensing process in the IoT space. “The move will support the future growth of cellular IoT and ensure that consumers benefit from an even greater range of connected products and services,” Jenni Lukander, President of Nokia Technologies, said.
This month, NOK also announced its partnership with Tele2 to deploy 5G RAN in Estonia, Latvia, and Lithuania in a long-term deal. This deal marks 25 years of continuous cooperation with Tele2 in the Baltic region and should enable NOK to strengthen its footing in the fast-growing 5G space.
NOK’s net sales increased 1.9% year-over-year to €5.40 billion ($6.12 billion) in the third fiscal quarter. Its operating profit stood at €502 million ($569.19 million), up 43.4% from the prior-year quarter, while profit for the period increased 78.2% year-over-year to €351 million ($397.98 million). Also, its EPS increased 100% from its year-ago value to €0.06.
The consensus revenue estimate of $26.10 billion for the fiscal period ending December 2022 indicates an increase of 3.3% year-over-year. NOK’s EPS is expected to come in at $0.41 for the same period, indicating a rise of 2.4% year-over-year. Moreover, NOK has surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive.
NOK shares have gained 32.9% over the past nine months and 1.3% over the past five days to close its last trading session at $5.58.
NOK’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting. NOK is rated B in Value and Sentiment. Within the Technology-Communication/Networking industry, it is ranked #11 of 56 stocks.
In addition to the POWR Ratings grades highlighted, you can see the NOK’s Growth, Momentum, Stability, and Quality ratings here.
ASE Technology Holding Company Limited. ADR (ASX)
Headquartered in Kaohsiung, Taiwan, ASX is a leading provider of semiconductors packaging and testing and electronic manufacturing services worldwide. The company offers advanced chip-scale, quad flat, stacked die solutions across multiple package types and copper and silver wire bonding solutions.
In November, ASX achieved the best overall performance on the Dow Jones Sustainability Indices (DJSI) - Semiconductors and Semiconductor Equipment Industry Group for the sixth consecutive year. This achievement recognizes ASX’s outstanding performance in sustainability in tandem with growth and innovation in a competitive global industry.
Last month, ASX announced a Sale and Purchase Agreement with Beijing Wise Road Asset Management Co., Ltd. in which ASX will sell shares and equity interests in its subsidiaries, GAPT Holding Limited and ASE (Kun Shan) Inc. and expects to realize a tax effected gain of approximately $630 million from the transaction. The company expects this transaction to help improve its overall competitive edge by optimizing its strategy and resource allocation in China while further enhancing its investment in advanced technology development and expanding its leading-edge capacities within Taiwan.
ASX’s total net revenues increased 22.3% year-over-year to NT$150.67 billion ($5.43 billion) in the fiscal third quarter ended September 30. Its operating income grew 101.6% from the year-ago value to NT$18.43 billion ($664.06 million), while its gross profit improved 56.1% year-over-year to NT$30.78 billion ($1.11 billion). Its earnings per ADS increased 119% from its year-ago value to $0.23.
Street expects the company’s revenue to increase 12.7% year-over-year to $5.98 billion in the fiscal fourth-quarter ending December 2021. The consensus EPS estimate of $0.23 indicates a rise of 40.9% year-over-year in the same period.
The stock gained marginally intraday to close its last trading session at $7.09.
It’s no surprise ASX has an overall rating of B, which translates to Buy in our proprietary rating system. ASX is rated an A in Value and B in Momentum & Sentiment. In the A-rated Semiconductor & Wireless Chip industry, it is ranked #47 among the 100 stocks.
Click here to see the ASX’s Growth, Stability, and Quality ratings.
LG Display Company Limited ADR (LPL)
Headquartered in Seoul, South Korea, LPL is a leading manufacturer and designer of thin-film transistor liquid crystal display (TFT-LCD) and organic light-emitting diode (OLED) technology-based display panels. The display panels are primarily used in televisions, notebook computers, desktop automotive displays.
This month, LPL announced its collaboration with Brelyon, a pioneer in hardware and software technologies, to integrate LG Display’s P-OLED technology into its ultra-immersive, virtual monitors. The companies aim to offer a solution that far supersedes anything the world of monitors has seen before. This category of displays should enhance LPL’s product portfolio.
In December, LPL revealed their next upgrade of OLED TV technology, OLED EX. “With our new OLED EX technology, we aim to provide even more innovative, high-end customer experiences through the evolution of our OLED technology, algorithms, and designs,” said Dr. Oh Chang-ho, Executive Vice President & Head of the TV Business Unit at LG Display.
LPL’s net sales increased 7.2% year-over-year to ₩7.22 trillion ($6.02 billion) in the fiscal third quarter ended September 30. Its operating profit stood at ₩528.90 billion ($441.46 million), up 221.8% from the prior-year quarter. Its total comprehensive income increased 1,056.1% year-over-year to ₩850.91 billion ($710.23 million). Also, its EPS increased 688.2% from its year-ago value to ₩670.
Analysts expect the company’s revenue to increase marginally year-over-year to $25 billion for the fiscal period ending December 2022. In addition, its EPS is expected to grow 32.5% per annum over the next five years.
Over the past three months, the stock has gained 13.3% to close its last trading session at $8.80.
LPL’s POWR Ratings reflect its solid fundamentals. The company has an overall rating of B, which translates to Buy in our proprietary rating system. LPL is rated an A in Value and B in Stability & Sentiment. In the Technology-Electronics industry, it is ranked #4 out of the 45 stocks.
In addition to the POWR Ratings grades highlighted, you can see the LPL’s Growth, Momentum & Quality ratings here.
GoPro, Incorporation (GPRO)
GPRO develops and sells cameras, drones, and mountable and wearable accessories worldwide. It offers cloud-connected HERO7 & HERO8 waterproof cameras and MAX, a 360-degree waterproof camera. It also provides cloud-based storage solutions and enables subscribers to access, edit, and share content.
Last month. GPRO launched its new innovative downloadable camera update for its flagship HERO10 Black, enabling new creative features and recording options. The continued up-gradation demonstrates its prowess and helps it thrive in the competitive space.
Last month, GPRO announced the availability of the Enduro battery at GoPro.com, which features revolutionary technology that improves the camera performance of HERO10 and HERO9 Black in cold temperatures while extending recording times in moderate temperatures. The popularity of HERO cameras should, in turn, create high demand for the performance booster Enduro batteries.
GPRO’s revenue increased 12.9% year-over-year to $316.67 million in the fiscal third quarter ended September 30. Its non-GAAP operating income grew 75.8% from the year-ago value to $58.80 million, while its non-GAAP net income improved 78.2% year-over-year to $55.32 million. Its non-GAAP EPS increased 70% from its year-ago value to $0.34.
The consensus revenue estimate of $235.49 million for the fiscal quarter ending March 2022 indicates an increase of 15.6% year-over-year. GPRO’s EPS is expected to come in at $0.07 in the same period, indicating a rise of 138.8% year-over-year. Also, GPRO beat Street EPS estimates in each of the trailing four quarters.
GPRO shares have declined marginally intraday to close its last trading session at $8.47.
According to the POWR Ratings, GPRO is rated B in Value and Quality. It is ranked #21 of 48 stocks in the Technology-Hardware industry. Get GPRO’s Growth, Momentum, Stability, and Sentiment ratings here.
What To Do Next?
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NOK shares were unchanged in after-hours trading Thursday. Year-to-date, NOK has declined -10.13%, versus a -9.20% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
4 Top-Rated Tech Stocks Under $10 to Add to Your Watchlist StockNews.com
