Here are seven high-octane tech stocks to buy for May. These companies are on pace for rapid growth thanks to strong fundamentals and innovative business models that promise long-term gains for investors.
Given the rising S&P 500 and Nasdaq indices, which generally signal robust market conditions, investors should look for tech stocks that can capitalize on these trends. The three companies discussed in this article stand out due to their ability to overcome challenges and leverage broader market opportunities.
Their strengths, including accelerating revenue growth and profitability, indicate that they are well-positioned to thrive. Instead of sticking to a broad-based ETF, investors should consider these high-potential names, especially since I predict the AI boom will drive significant advancements in the tech sector for some time to come.
So here are seven high-octane tech stocks to buy for this month.
High-Octane Tech Stocks to Buy: Coinbase (COIN)
Coinbase (NASDAQ:COIN) has benefited from the surge in cryptocurrency prices, particularly Bitcoin (BTC-USD). The company’s return to profitability and the increasing popularity of crypto transactions position it well for future growth.
Coinbase’s stock price increased by approximately 300%, underscoring its strong position in the digital asset market. The approval of Bitcoin spot ETFs supports this growth.
In the first quarter of 2024, Coinbase reported significant financial improvements with revenue reaching $1.64 billion, up 122% from the same period in 2023, and a net income of $1.18 billion, a stark contrast to the loss reported in the previous year.
Coinbase’s future outlook remains optimistic. The company forecasts continued institutional investment in Bitcoin and anticipates favorable macroeconomic conditions and regulatory advancements, which are expected to support long-term adoption of cryptocurrencies.
COIN is one of my top picks for this year and I think we’ve only started to see the potential of the company.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) has demonstrated impressive growth, particularly with a 25% year-over-year (YOY) increase in Q4 revenue, reaching $40.11 billion. The company is focusing on efficiency, scaling back costs, and enhancing AI technologies.
This strong performance is attributed to a positive shift in ad pricing growth and robust online commerce advertising. The increase in ad pricing marks a return to growth for the first time since Q4 2021, bolstered by significant contributions from China-based advertisers.
The company plans to invest $30-37 billion in capital expenditures for 2024, primarily in AI and non-AI hardware, and data centers. This investment is aimed at supporting its long-term AI research and product development efforts. This growth is supported by the successful implementation of cost management strategies and increased monetization efforts through features like Reels and WhatsApp Channels.
META could be one of those undervalued picks in the stock market for aggressive investors, which is why I recommend it as one to watch.
High-Octane Tech Stocks to Buy: Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) plays a critical role in the expansion of 5G networks and mobile technology. Despite a recent slowdown in mobile phone sales, the company’s strong position in the 5G market and a robust dividend yield make it an attractive long-term investment.
In the second fiscal quarter of 2024, Qualcomm reported strong financial results, with revenues reaching $9.4 billion and non-GAAP EPS of $2.44, surpassing analyst expectations. This growth was driven by increased sales in handset and automotive chips. Despite a slight decline in gross margins, the company’s financial performance remains solid.
Looking ahead, Qualcomm has set ambitious growth targets. The company expects its QCT segment to achieve mid-teens compound annual growth rates (CAGR) and maintain operating margins above 30% by fiscal 2024. Additionally, Qualcomm projects automotive revenues to grow to approximately $3.5 billion in five years and $8 billion in ten years.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) continues to gain market share in the semiconductor industry with strong performance in its Data Center and Client segments. In the first quarter of 2024, AMD reported revenue of $5.5 billion, marking a 2% YOY increase. The company also achieved a non-GAAP gross margin of 52% and a net income of $123 million.
Looking ahead, AMD has set an optimistic outlook for 2024, expecting revenue to reach approximately $5.7 billion in the second quarter, representing a 6% YOY growth. This positive projection is driven by increased demand for its high-performance computing products.
The company’s focus on edge AI with its Ryzen line positions it well to dominate in this emerging market. CEO Lisa Su has projected the AI accelerator market to reach $400 billion by 2027, nearly 300% growth from this year.
AMD is a great alternative to the likes of Nvidia (NASDAQ:NVDA), as it has a far lower valuation than the microchip giant.
High-Octane Tech Stocks to Buy: Shopify (SHOP)
Shopify (NYSE:SHOP) remains a leader in e-commerce platforms, with significant revenue growth and recent profitability.
In Q4 2023, Shopify reported a 24% increase in revenue, reaching $2.1 billion. The company also achieved a free cash flow of $905 million, compared to a negative free cash flow of $186 million the previous year. This marked a significant turnaround.
For the first quarter of 2024, Shopify projects revenue growth at a low-twenties percentage rate on a YOY basis. This translates into a mid-to-high-twenties growth rate when adjusted for the impact of selling its logistics businesses. Gross margin for Q1 is on track to increase by approximately 150 basis points compared to Q4 2023.
SHOP is one of my favorite picks for investors seeking one of those high-octane tech stocks for gains. Despite these positive indicators, Shopify’s stock experienced a decline due to lower-than-expected free cash flow guidance for 2024. I still think that long-term SHOP should be on investors’ radars.
Coupang (CPNG)
Coupang (NYSE:CPNG) is expanding into new verticals like travel and dining. Despite a significant drop from its IPO price, analysts forecast strong earnings and revenue growth, with a projected stock price target averaging $26.67, suggesting a potential upside of 19.2% from the current price.
Coupang’s diversified services include Rocket Fresh for grocery delivery, Coupang Eats for restaurant ordering and delivery, and Coupang Play for online content streaming. These offerings have significantly boosted customer engagement, supported by over 100 fulfillment centers across South Korea.
Financially, Coupang has consistently reported positive cash flows. In the last four quarters, the company achieved an operating cash flow of $2.6 billion and free cash flow of $1.9 billion. This positive financial performance is further highlighted by a 27% YOY increase in gross profits to $1.6 billion.
CPNG could be a good pick for investors who want to diversify their portfolios outside of the United States, as CPNG is essentially the Amazon (NASDAQ:AMZN) of South Korea.
Li Auto (LI)
Li Auto (NASDAQ:LI), a Chinese EV manufacturer, has shown impressive growth, with revenue increasing by 271% last quarter. It outsold Tesla (NASDAQ:TSLA) in China for October 2023, and its hybrid EVs are gaining significant market share in China. The company delivered 80,400 vehicles in Q1 2024.
Additionally, the company is advancing its autonomous driving technology, with plans to roll out AD Max 3.0, featuring full-scenario autonomous driving capabilities and enhanced safety systems.
Financially, Li Auto has consistently reported positive cash flows, with Q3 2023 showing a free cash flow of $1.8 billion. The company also achieved a gross profit margin of 25.3% and an adjusted EBITDA margin of 3.9%.
Chinese-brand EVs like Li will likely continue to perform strongly, even despite Biden’s recent tariffs on these companies. Asia is fast becoming the hotspot for the market, and I feel that this will continue to grow in the future.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.