Technology stocks aren’t looking so good on Thursday, as the threat of a prolonged U.S.-China trade war rattled the sector and led to a mass exodus of capital from equities as a whole.
Despite the sudden drop in market values, technology stocks remain one of the most promising in terms of ROI. As MarketWatch recently reported, investors looking to get a leg up on emerging technologies such as artificial intelligence, automation and the internet of things (IOT) should keep track of the following three companies: Five9 Inc. (NASDAQ: FIVN), PTC Inc. (NASDAQ: PTC), and Qorvo Inc. (NASDAQ: QRVO).
- Market Cap: $3 billion
- Revenue Growth: 28.7% (2018)
- Free Cash Flow: $7.21 million
In terms of game-changing technologies, cloud computing has very few comparables. Five9 utilizes the cloud and artificial intelligence to help automate customer support. The company boasts more than 2,000 clients worldwide, including BlueCross BlueShield, Fitbit, Expedia, Siemens, and Citrix.
Demand for AI-powered solutions has helped Five9 become one of the fastest-growing companies in the emerging tech landscape. Between 2014 and 2018, the company grew its sales by a whopping 8,200%. Flexibility and a large addressable market suggest Five9 is on track for exponential growth.
Five9’s stock price has had a roller coaster 2019, netting a return of more than 12%. The stock peaked near $56 in March before undergoing a broad correction.
- Market Cap: $9.8 billion
- Revenue Growth: 2% (2018)
- Free Cash Flow: $209 million
Back in 2015, I wrote a whitepaper on automation being the next wave of intelligent industrialization. After all, the manufacturing sector is ripe for disruption with industrial robotics and advanced computer systems changing the way goods are produced.
PTC helps manufacturers capitalize on the technology revolution by providing them with design solutions that can be incorporated into their industrial robots and automation processes. The company generated more than $1.2 billion in revenue in 2018 and has grown its sales in each of the past nine years. PTC has a diverse array of clients from all major sectors of the economy, including energy, aerospace, and automotive.
The stock peaked above $100 in April but has fallen sharply ever since. Investors betting on automation may be inclined to buy PTC on discount.
- Market Cap: $7.1 billion
- Revenue Growth: 4% (2019)
- Free Cash Flow: $589.4 million
The age of hyper-connectivity is upon us, and this means the internet of things (IOT) is about to take a giant leap forward. Semiconductor companies will play an important role in this revolution.
Enter Qorvo, an innovative RF solutions provider for advanced wireless devices and communications. The company is coming off a stellar quarter of earnings and revenue growth that trounced analysts’ expectations. The earnings call triggered a sharp rise in QRVO stock, which had previously peaked north of $78 back in April.
The company’s stock price has been in sharp retreat for the better part of a week amid escalating U.S.-China trade tensions. As a primary supplier for Huawei, Qorvo was hit hard by news that the U.S. government was barring domestic companies from working with the Chinese telecommunications giant. The Department of Commerce has since granted domestic companies a 90-day extension to continue working with Huawei.
Artificial intelligence, automation, and IOT present tangible opportunities for investors looking for high ROI. The aforementioned companies provide a good mix of value, innovation, and established use cases for investors looking to tap into the emerging tech landscape.
Disclaimer: Author holds no investment position in Five9, PTC, or Qorvo.