3 Cheap Tech Stocks to Buy Now- May 2024

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One of the hottest sectors in the U.S. economy is the tech sector and it has an impact on the overall market sentiment. When tech companies report strong earnings, we see the market rally and it takes several other stocks higher. Driven by the growing demand and penetration of artificial intelligence across industries, now is an ideal time to invest in tech stocks. Yes, stocks like Nvidia (NASDAQ:NVDA) are too expensive to buy right now but there are several cheap tech stocks you can buy and wait for them to turn into multi-baggers. I’ve picked three cheap tech stocks that have the potential to rally in the near future and could reap significant returns if you hold on to them. Let’s dive into these stocks to buy this month.

Oracle (ORCL)

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Trading at $116, Oracle (NYSE:ORCL) stock is up 12% year-to-date and 19% in the past 12 months. A legacy software company, Oracle has locked in several partnerships that will drive growth over the next three years. It has reported a double-digit growth in the cloud business and is looking at expanding its cloud services globally. 

Having signed partnerships with Microsoft (NASDAQ:MSFT), Palantir Technologies (NYSE:PLTR), and Nvidia, there is no stopping the momentum of Oracle. In the third-quarter results, it saw a 25% year-over-year jump in cloud services revenue to hit $5 billion. The growing demand for cloud infrastructure has brought Oracle to the limelight.

Its outstanding performance obligations stood at $80 billion, up 29% YOY and this number is very impressive as it shows that the company has a solid backlog. About 43% of the remaining performance obligations will be recognized as revenue in the next 12 months. This shows that the cloud demand is robust and as companies transition to cloud, it will see business grow. 

The stock is trading much lower than other tech companies, like Microsoft or Nvidia, and this is an opportunity to buy and hold Oracle stock. Patient investors will reap significant gains if they hold on to the stock. One thing to remember is that Oracle took time to reach this success and it didn’t happen overnight. It’s a multibagger stock that could become an AI leader.

Palantir Technologies (PLTR)

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One of my favorite tech stocks, Palantir Technologies, was once known as a government favorite and was criticized for focusing solely on government contracts.

However, things have now changed and the company saw a 27% growth in commercial revenue to $299 million. This growth was driven by a 40% jump in U.S. commercial revenue. It added 41 new customers in the commercial segment and the revenue jumped 16% in the government side of the business.

The company raised the full-year outlook to a revenue range of $2.67 billion to $2.68 billion and revised the operating income forecast from $868 million to $880 million. However, investors weren’t happy with the lower-than-expected quarter guidance and this led to a drop in PLTR stock. For the second quarter, it guided for revenue in the range of $649 to $653 million. 

One solid reason to buy this tech stock is its Artificial Intelligence Platform (AIP) which has been driving revenue. It has a lot of potential and has successfully converted several leads into clients.

With the recent dip, PLTR stock is trading at $20 but is up 24% YTD. There is ample space for the company to grow and its strong history, solid fundamentals, and enviable clientele make it one of the best cheap tech stocks to own. 

Amazon (AMZN)

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Selling at $188, Amazon (NASDAQ:AMZN) stock is up 25% YTD but it looks highly undervalued to me. Buying it below $200 is the best investment decision you can make. The company is no longer restricted to an e-commerce business and has a diversified umbrella of several products and services. Currently, Amazon is leading the cloud market share, followed by Microsoft. It holds a 31% market share right now. 

Driven by steady innovation and revenue growth, Amazon reported impressive first-quarter results where Amazon Web Services sales grew 17% YOY. The net sales hit $143.3 billion, up 13% YOY out of which $25 billion was AWS sales.

The company is investing $1.3 billion in France to support the growing generative AI opportunity in the region. It has also opened a new region in Canada and created the AWS European Sovereign Cloud for European businesses. 

Its advertising business is also growing at a rapid rate and saw a revenue of $11.8 billion, up 24% YOY. The operating income soared 200% YOY and AWS accounted for 62% of the operating profit.

Overall, Amazon is a solid business with massive upside potential, driven by AWS. Looking at the long-term picture, AMZN stock looks cheap right now and you will never regret owning it.

On the date of publication, Vandita Jadeja did not hold (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.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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