- These tech stocks are fantastic opportunities for July 2023 and beyond.
- Qualcomm (QCOM): The mobile communications chip leader could emerge as a leading AI stock.
- Taiwan Semiconductor Manufacturing (TSM): TSM is the dominant player in a fast-growing industry.
- nCino (NCNO): The bank software company could be a takeover target.
The year 2023 has been a massive time for the market’s top tech stocks. The Nasdaq posted record gains for the first half of the year as investors came rushing into both the mega-cap tech titans and newer winners in fields such as artificial intelligence (AI).
After such huge gains, is it too late to buy high-potential tech stocks? Not at all. Investors just need to be a little pickier to ensure they don’t overpay for growth stocks going forward.
The good news is that there are still some solid tech stocks to buy at fair prices. These are three great ones to own for July 2023 and beyond.
Qualcomm (NASDAQ:QCOM) is a leading semiconductor company focused on the mobile communications space. The company rose to prominence by developing key intellectual property and patents for technologies such as 3G and 4G.
Qualcomm continues to collect billions of dollars in royalties from those innovations. However, the business has branched out in recent years. Qualcomm now designs its own chip ecosystems, such as Snapdragon, for smartphones and tablets.
The latest move is in AI. Qualcomm has been developing mobile chips capable of delivering AI solutions for specific use cases, such as vehicles. Qualcomm has focused on power efficiency, and its AI-enabled chips have outperformed Nvidia (NASDAQ:NVDA) in some recent tests.
Unlike many AI stocks, Qualcomm is still selling at a bargain valuation. Qualcomm goes for 15 times forward earnings today and even offers a 2.6% dividend yield.
Taiwan Semiconductor Manufacturing (TSM)
Taiwan Semiconductor Manufacturing (NYSE:TSM) is the world’s dominant semiconductor foundry company.
In 2022, it grew its market share from 53.1% to 55.5%, and analysts expect further market share gains in 2023. Simply put, TSM has built a massive competitive moat around its business, having the best plants, employees and know-how to dominate the industry.
That places TSM at the center of the current semiconductor boom. All the companies that don’t own their own fabs have to outsource production to firms like TSM. And the company is now getting more than 55% of all those dollars. The overall foundry market grew a blistering 27.9% in 2022, and TSM’s share of that is increasing — it’s the winning formula for outsized profit and share price gains.
You might expect TSM stock to be at a nosebleed multiple, given the great news. And yet, shares still go for a downright reasonable 21 times forward earnings.
Given the geopolitical concerns around Taiwan, investors have been reticent to bid up TSM stock. But with the firm’s increasingly monopoly-like industry position and its growing investments in Arizona, Taiwan Semiconductor is more prepared to deal with political adversity than investors give it credit for.
nCino (NASDAQ:NCNO) is a software-as-a-service company that provides cloud banking solutions. Its software is, in effect, a bank operating system, helping underwrite loans, manage risk, deal with accounting functions and so on.
The company is unique in that it began as the information technology unit of a large regional bank building mission-critical solutions for that specific entity. After developing it, leadership realized that these solutions could be useful across the whole banking industry. That makes nCino different in that it was built by an actual bank to address the specific issues that its employees faced.
nCino has found a wide audience for its product, generating $408 million in revenue by the end of January. Shares are still down by more than half from their peak amid the slowdown in the banking sector this year. However, change could be coming, as nCino has put itself up for sale, which could lead to a juicy takeover premium.
This post originally appeared at InvestorPlace.
On the date of publication, Ian Bezek held a long position in NCNO and QCOM stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.