Tech stocks are among the most viable segments within the equities market. One could make the argument that the broader narrative is permanently relevant: modern societies will constantly push for bigger, better and more efficient ones. That said, it’s also been quite clear that betting on the usual suspects presents high risks. Basically, you don’t want to be left holding the bag.
Granted, no surefire mechanism exists to avoid this risk factor. And sometimes, the top innovators can keep rising higher. Still, with valuations reaching nosebleed levels for certain enterprises, it may be prudent to consider the less-heralded companies. They might not be as exciting to investors but over the intermediate term, they may offer superior performance.
Plus, some of the most promising ideas could really blossom into something special over the long run. If you can handle the heat – and have a bit of contrarianism flowing through your veins – these are the tech stocks to consider.
Let’s get right into the mix of tech stocks with Beam Global (NASDAQ:BEEM). Falling under the solar industry, Beam has implications in new-energy applications, such as providing charging infrastructure for electric vehicles. For contrarian speculators, BEEM stock is attractive for its valuation. Right now, shares trade hands at 1.21x trailing-year sales.
Rather than comparing the underlying enterprise to other companies in the field, it may be more instructive to consider the recent historical context. In the period between the first quarter of 2023 to Q1 2024, the average price-to-sales (PS) ratio stood at 3.1X. Therefore, if the market supported such a premium in the recent past, BEEM stock could conceivably rise to its prior valuation.
That theory becomes even more attractive when considering analysts’ projections. By the end of the current fiscal year, experts believe sales will hit $79.2 million. If so, that would be up 17.6% from last year’s print of $67.35 million. Further, fiscal 2025 revenue could soar to $111.66 million, a 41% increase. Given the sector relevancy and the company-specific forecast, BEEM ranks among the tech stocks to gamble on.
Ouster (OUST)
Miso Robotics 'ROAR' technology displayed on computer monitor.
Conducting business in the electronic components space, Ouster (NYSE:OUST) provides lidar sensors for multiple industries. These include automotive, industrial, robotics and smart infrastructure. It also offers software solutions that support the underlying sensors. Now, unlike Beam Global, OUST stock isn’t exactly traded at a discount to sales.
Indeed, there is a criticism that on paper, Ouster appears overpriced. Right now, shares trade hands at 6.15x trailing-year revenue. In the past year, this metric sat at 2.98%. However, the reality is that in the past six months, shares have been flying higher. Considering that in Q2 of last year, the PS ratio was 2.07x. In Q1 of this year, the metric shot up to 3.53x.
However, context matters. Analysts anticipate that by the end of this year, sales may rise to $116.39 million. That’s up nearly 40% from the prior year’s tally of $83.28 million. Also, fiscal 2025 revenue might ping at $176.52 million, up 51.7%. And the high-side estimate is targeting $210 million.
Translation? OUST is one of the hot tech stocks that could get hotter.
C3.ai (AI)
C3.ai (AI) logo on a smartphone with computer screen showing graph in background, symbolizing AI stock
Source: shutterstock.com/Below the Sky
Operating in the application software industry, C3.ai (NYSE:AI) represents one of the rising stars in the field of artificial intelligence. Through its proprietary platform – which is an application development and runtime environment ecosystem – C3.ai’s enterprise-level clients enjoy turnkey applications supported by digital intelligence. It’s a groundbreaking innovation and it continues to attract eyeballs.
Interestingly, despite the relevance and fanfare, AI stock comes in at a relatively reasonable valuation. Again, I’m not comparing C3.ai to other software application companies. Rather, in the past year, the market accepted a sales multiple of 10.67x. Right now, AI stock trades hands at 10.66x sales.
Granted, that’s a premium relative to recent valuations. In Q4 2023, the PS ratio sat at 9.96x. And in Q1 of this year, it was 8.89x. Still, the market seems to accept a 10x average with few qualms.
Here’s the spicy part. Analysts on average anticipate current fiscal year sales to hit $383.39 million, up 23.4% from last year. And 365 days later, revenue may rise again to $467.14 million or 21.8% up. Thus, it may be one of the tech stocks to consider.
Sea Ltd (SE)
a visual representation of the internet connections crisscrossing the sky above a city
Source: Shutterstock
Based in Singapore, Sea Ltd (NYSE:SE) ranks among the most compelling tech stocks to speculate on. For one thing, the company is tied to the burgeoning Southeast Asia internet economy. Many experts believe the ecosystem could be worth $1 trillion eventually. Second, Sea is a multivariate enterprise. It features business units tied to digital entertainment, e-commerce and financial technology/services (fintech).
Such a digital brand would be relevant practically anywhere. That it’s tied to a powerhouse emerging region is truly enticing. What’s more, there could be significant growth ahead. Right now, shares trade hands at 2.79x sales. Now, in the past year, the average sat at 2.56x. So, SE stock trades at a modest premium, relatively speaking.
However, in Q1 of last year, Sea had a PS ratio of 3.88. Not only that, analysts anticipate robust growth in the next two years. Fiscal 2024 sales may land at $15.43 billion, up 18.1% from the prior year. And in fiscal 2025, the top line might expand to $17.65 billion, up 14.4%.
If you can handle the volatility risk, SE represents one of the most compelling tech stocks.
SiTime (SITM)
Automatic Pick and Place machine quickly installs Components on Generic Circuit Board. Electronics and Circuit board Manufacturing. Bright Environment, semiconductor stocks, chip stocks
Source: IM Imagery / Shutterstock.com
Falling under the semiconductor industry, SiTime (NASDAQ:SITM) designs, develops and sells silicon timing systems solutions in Taiwan, Hong Kong, the U.S., Singapore and other international markets. Primarily, SiTime provides resonators and clock-integrated circuits, along with various types of oscillators. Essentially, it’s an important stagehand of the tech enterprise.
While SiTime may not be a household name, its products are integrated in various applications: communications, data centers, automotive, industrial, Internet of Things (or IoT), mobile, and even aerospace and defense. It’s super relevant as you might imagine. And yes, admittedly, it trades for a rich premium.
Right now, shares trade hands at nearly 24x sales. In the past year, the metric sat at 13.13x. So, that is a risk – I’m not going to shy away from it. Why bother with SITM, you ask? Two words: analysts’ projections.
Over the next two years, SiTime should see significant business expansion. By the end of fiscal 2024, sales could rise to $180.25 million, up 25.2% from last year. And in fiscal 2025, revenue could soar to $234.03 million, up 29.8%.
Ehang (EH)
An image of an orange eVTOL sitting on a helipad, the ocean in the background. best flying car stocks
Source: Chesky / Shutterstock
Operating in the aerospace and defense field, Ehang (NASDAQ:EH) operates as an autonomous aerial vehicle (or AAV) technology platform company. American investors know the platform better as vertical takeoff and landing (VTOL) aircraft. Whatever you want to call it, Ehang is one of the emerging entities in the air mobility space.
Fundamentally, the industry offers relevance in terms of economic productivity and emissions mitigation. Further, these air taxis are much quieter than helicopters, thus alleviating the inconveniences of urban living. There’s no denying that EH stock and its ilk are promising. However, the concern right now is the valuation. Presently, EH trades at a whopping 36.63x sales.
So, is there a caveat? Yes. Air mobility is a new industry so there’s bound to be wild valuations. However, that also opens the door for potentially wild returns. By the end of fiscal 2024, analysts anticipate that sales could hit $56.71 million. That doesn’t sound like much nominally. However, it’s up 242.9% from last year.
By 2025, revenue could rise again to $114.9 million. The high-side estimate is almost $118 million. Suddenly, the valuation starts to look a bit more reasonable, making EH one of the tech stocks to consider.
Jumia Technologies (JMIA)
Jumia (JMIA) logo on a cellphone with a flower
Source: farzand01 / Shutterstock.com
Arguably the most questionable, riskiest and promising idea on this list of tech stocks, Jumia Technologies (NYSE:JMIA) is for speculators. JMIA stock is unique in the sense that it’s one of the rare few opportunities for retail investors to quickly and conveniently invest in a frontier market. I’m not really sure there are that many other primarily Africa-focused enterprises available.
By providing a marketplace that connects sellers with customers (along with a supporting logistics chain), Jumia can help nations in the African continent become digitally connected with the rest of the global economy. Obviously, a massive opportunity exists and JMIA stock has been screaming higher this year. Since January, shares have gained almost 300%.
Now, growing pains exist. Shares trade at 6.9x sales, which is relatively steep. At the same time, analysts are calling for fiscal 2024 sales to land at $201.92 million. That’s up 8.3% from last year’s print of $186.4 million. Combined with the company mitigating losses per share in recent quarters, JMIA could rank among the tech stocks to gamble on.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
