- The rise in the stock market due to the AI boom shows no signs of slowing down.
- In the current climate, I used the InvestingPro Stock Screener to find cheap and undervalued companies with significant upside potential.
- Therefore, investors should consider adding PayPal, Zoom Video Communications, and Twilio to their portfolios.
In the dynamic world of technology investing, finding opportunities with significant upside potential is a priority for many investors.
Using the power of InvestingPro Stock Screener – Available for just $9/month -, I've identified three attractive tech stocks with strong upside potential thanks to strong fundamentals, promising growth prospects, and cheap valuations.
Source: InvestingPro
For investors seeking exposure to a dynamic technology sector, PayPal (NASDAQ:), Zoom, and Twilio (NYSE:) offer attractive investment opportunities with the potential for significant returns in the coming months.
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Let's take a look at what each company is doing, what tailwinds they're enjoying, and how they're leveraging AI technology to drive revenue growth and sales.
1.Paypal
PayPal has faced significant headwinds over the past year, with the stock having lost about 23% in the past 12 months amid concerns about increased competition in the digital payments industry from Apple (NASDAQ:), Google (NASDAQ:), Block and others. % fell. (NYSE:), and Affirm (NASDAQ:).
Source: InvestingPro
However, beneath the surface, PayPal reveals resilient strengths and characteristics that make it an attractive option in the current market environment. With its user-friendly interface and global reach, the company has become synonymous with digital payments, facilitating millions of transactions every day across borders and currencies.
In fact, PayPal's profits, revenue, and total payments have all continued to grow in recent quarters despite the uncertainty. Additionally, the mobile payment processing giant's move to newer revenue streams, such as the proliferation of buy now, pay later (BNPL) options, is providing significant diversification benefits.
Source: InvestingPro
As seen above, InvestingPro paints a mostly positive picture of PayPal's financial health, highlighting its solid profitability outlook and attractive valuation. ProTips also notes that management has been aggressively buying back stock in recent months.
It should be noted that PYPL stock is highly undervalued, with a potential upside of 40.7% from Thursday's closing price of $58.50, according to InvestingPro's quantitative model.
That would move the stock closer to its fair value of $82.30.
Source: InvestingPro
At its current valuation, the San Jose, California-based fintech leader has a market capitalization of $62.7 billion.
2.Zoom video communication
Widely seen as one of the biggest winners of the coronavirus pandemic, Zoom Video Communications (NASDAQ:) has seen demand for its cloud-based video conferencing and collaboration solutions as more employees return to the office. Its popularity is declining as the number of
Source: InvestingPro
Nevertheless, growth prospects for video conferencing companies remain strong despite recent headwinds as hybrid work continues to shape the future of the business world.
With its user-friendly platform and robust features, Zoom continues to be one of the leading solutions for remote work, virtual meetings, and online events. Additionally, the company has leveraged artificial intelligence to offer AI-powered features designed to attract new customers in a competitive market environment.
Source: InvestingPro
As ProTips points out above, Zoom has several tailwinds, with the stock expected to rise in the coming months, with highlights including consistently increasing earnings per share and impressive gross margins. This includes things like ratios, strong balance sheets, etc.
With that in mind, now might be a good time to buy the stock, as ZM is currently trading at a cheap valuation and is expected to rise 38.7% over the next 12 months, according to the InvestingPro model. .
Such a move would boost Zoom's stock price to $92.98 from last night's closing price of $67.03.
Source: InvestingPro
At its current valuation, the San Jose, California-based video conferencing specialist has a market capitalization of $20.6 billion.
3. Twilio
Twilio is a cloud communications platform that allows developers to integrate voice, messaging, and video functionality into their applications. Stocks have fallen below their highs of the past year on concerns that growth will slow significantly in the near term.
Source: InvestingPro
However, Twilio's dominant market presence and cheap valuation may make it a promising prospect for long-term investors. Twilio is widely recognized as one of the leading companies in the communications platform-as-a-service (CPaaS) space, joining major companies such as Uber (NYSE:), Airbnb, DoorDash (NASDAQ:), eBay (NASDAQ:), and Instacart. is named. (NASDAQ:), whose customers include Reddit.
With an API-driven approach, Twilio enables developers to build customized communication solutions that enhance customer engagement and drive business outcomes. Additionally, Twilio has introduced AI-powered chatbots and virtual assistants to its services to provide advanced customer engagement solutions.
Source: InvestingPro
As mentioned above, ProTips highlights a number of favorable factors that are poised to propel Twilio's upward trajectory, including a strong profitability outlook and solid financial position. It also points to Twilio's management's aggressive stock buyback efforts in recent months.
According to InvestingPro Insights, the average 'fair value' price target for TWLO stock implies an upside of 37.5% over the next 12 months, as cutting-edge AI-driven customer engagement solutions drive future growth.
Such a move would push the stock price up to $84.06 from Thursday's closing price of $61.15.
Source: InvestingPro
At its current valuation, the San Francisco, California-based cloud communications software and services provider has a market capitalization of $11.1 billion.
To stay on top of market trends and what they mean for your trading, be sure to check out InvestingPro. As with any investment, it is important to do extensive research before making a decision.
InvestingPro helps investors make informed decisions by providing comprehensive analysis of undervalued stocks with significant upside potential in the market.
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Disclosure: As of this writing, I am long the S&P 500 and Nasdaq 100 via SPDR. S&P 500 ETF (SPY), and Invesco QQQ Trust ETF (QQQ). I am also long Technology Select Sector SPDR ETF (NYSE:).
I regularly rebalance my portfolio of individual stocks and ETFs based on an ongoing risk assessment of both the macroeconomic environment and corporate finances.
The views expressed in this article are solely those of the author and should not be taken as investment advice.
