Hold Tight! These 3 High-Growth Tech Stocks Still Have Potential

Stocks to buy

Strategic decisions in tech investments can yield remarkable gains. As investors, we should know this firsthand.

The Nasdaq-100, up by over 30% since January, maintains its lead in this year’s market rally. Indeed, second-quarter results from major tech companies have boosted the index and analysts’ outlook on tech stocks. The growth sector is booming, spanning mega-cap tech to emerging areas like artificial intelligence, electric vehicles, and space tech. Investors can still tap into this trend with affordable tech stocks.

Alongside the buzz around AI and other high-growth tech capabilities, here are three high-growth tech stocks with strong post-earnings potential.

Alibaba (BABA)

Source: zhu difeng / Shutterstock.com

Alibaba (NYSE:BABA) successfully navigates China’s AI sector with innovation, as seen in Tongyi Qianwen’s launch. While facing challenges, plans to split into six new business groups show adaptability and long-term potential.

The company is a prominent player in machine learning, developing a machine learning platform to adapt to enterprise clients’ data-driven needs. Analysts mostly rate BABA stock as a buy, with an average price target of $141.19, suggesting a 60% upside. With a forward multiple under 10 (at the time of writing), Alibaba offers growth potential at an attractive valuation.

The head of Alibaba’s cloud division now leads its AI lab in Zhejiang province, likely enhancing long-term value for BABA stock despite recent challenges. 

Baidu (BIDU)

Source: monticello / Shutterstock.com

Baidu (NASDAQ:BIDU), often called the Google (NASDAQ:GOOG,NASDAQ:GOOGL) of China, boasts the largest search engine in the second-largest economy. While not initially recognized as a high-potential AI stock, it qualifies due to a recent lack of interest from American investors in Chinese securities. Despite a 5% gain in the past year, BIDU’s potential is overlooked, attributed in part to China’s gradual economic recovery and investor uncertainty.

Baidu’s market cap is $52 billion, notably smaller than Alphabet. Yet, it’s a vital internet search platform in China, compensating for Google’s absence there. As the sixth global and top Chinese website, Baidu offers value, projecting 13% earnings growth.

Moreover, the company’s overlooked potential makes it an AI gem. At a forward multiple under 15, it’s cheaper than most in its industry. Many analysts have rated the stock as a strong buy, with an average price target of $180.35. This price target suggests a 40% upside.

Jd.com (JD)

Source: testing / Shutterstock.com

JD.com (NASDAQ:JD), a Chinese e-commerce giant, isn’t an obvious high-growth pick due to its recent 42% stock decline. Chinese economic recovery concerns have impacted its performance, offering a potential discount for patient investors.

That said, JD.com has entered China’s AI race with a language model. Its e-commerce business provides valuable data for AI development. Most analysts rate JD as a strong buy with an average target price of $61,59, offering over 80% upside potential. The stock’s undervaluation is evident, with a low forward multiple of 11 times earnings.

China’s top e-commerce firm presents a more secure option amid regulatory concerns. Unlike Alibaba, JD.com has avoided regulatory scrutiny. Although JD stock had declined, recent positive momentum suggests a turnaround. Net revenue increased by 7.6% year-over-year in the most recent quarter.

On the date of publication, Chris MacDonald has a LONG position in BABA, JD, BIDU. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

Articles You May Like

Your Two Minute Earnings Preview for Alcoa (AA) Stock
Home Run Investor – Introduction
Screening for Stocks to Short
Realogy (RLGY), Kemet (KEM) and Ultra Clean (UCTT) post Blowout Reports
This Week’s Hidden Gems: (CAMT)(PATK)