In this piece, we will take a look at the ten best emerging tech stocks to buy now. For more stocks, head on over to 5 Best Emerging Tech Stocks to Buy Now.
Technology is one of the biggest and most consequential industries in existence today. This is due to the fact that not only have technology companies changed the way in which humans live their daily lives, but they have also transformed business processes. A handful of examples for the latter include big data analytics, artificial intelligence, enterprise resource planning, and robotics. These technologies enable companies to scoop out insights from large datasets, plan their future operations, manage resources, and optimize production for peak profitability.
Therefore, it's unsurprising that the biggest companies these days are technology companies, and several of the world's billionaires also owe their wealth to this industry. For instance, the world's most valuable company in terms of market capitalization is none other than the Cupertino, California consumer technology giant Apple Inc. (NASDAQ:AAPL). Apple's latest market capitalization is $2.61 trillion - accounting for one tenth of the market capitalization of the NASDAQ exchange, which is the second biggest stock exchange in America. The second most valuable firm in the world is Microsoft Corporation (NASDAQ:MSFT) which has a market capitalization of $2.17 trillion, while the fourth most valuable company in the world is Alphabet Inc. (NASDAQ:GOOGL) whose latest market value sits at $1.3 trillion.
However, while Google, Amazon, and Microsoft sit at the top of the technology food chain, there are hundreds of thousands of tech firms in America. According to data from the technology trade association CompTIA, there were at least 585,000 technology firms in America as of December 2022, growing from 557,000 firms in 2021. Millions of people are employed in the sector, with statistics from Janco Associates showing that 4.13 million people were employed as information technology professionals in the U.S. as of April 2023. The Department of Commerce builds on this data as it reveals that employment in high technology sector in America is scattered across clusters, with the biggest of these being in Washington, California, Texas, and a handful of East Coast states. It adds to show that the city of San Jose, California led America for employment growth in high technology jobs from 1979 to 2020, with the city's employment growing by more than 20% on average. At the same time, Washington D.C. is the fastest growing city for these jobs right now, with Commerce Department's data outlining that from the 8% employment growth from 1979 to 1989, the growth has almost doubled to a little below 15% as of 2020. Other notable areas are San Francisco, which continues to grow, and Boston and New York, which have stable growth rates.
At the same time, its ubiquity in modern day living makes the tech sector one of the most valuable in the world. For instance, a research report from The Business Research Company shows that the information technology industry was worth a stunning $8.1 trillion in 2022 and is expected to grow to $8.8 trillion by the end of this year through a compounded annual growth rate (CAGR) of 8.2%. From then onwards, the sector should post a 7.9% CAGR and be worth $11.9 trillion by the end of 2027. The report adds that globally, Asia is the largest hub of information technology, with North America coming in at a second place.
These days, the hottest topic in the technology industry is artificial intelligence. While most people generally associate artificial intelligence with robots that look and behave like humans, in reality, it is a set of complicated mathematical techniques which use probabilities to determine the outcome of an event. The AI mania these days is fueled by the popularity of ChatGPT. ChatGPT has got the press frenzying about whether established industries such as law and computer programming are soon to be a thing of the past as AI takes over the world.
On this front, billionaire Ken Fisher of the hedge fund Fisher Investments shared his opinion on whether artificial intelligence will also help investors make better decisions. In a fresh video, Mr. Fisher shared:
Increasingly it's popular to think that artificial intelligence will be, maybe is, the next big wave in dealing with markets. And other things too. And, in fact, in some things, it will be. But not with markets. As long as I can remember, in my professional career almost fifty years, people have looked for IT tech to provide leading edge capability to outdo others. And sometimes there's breakthroughs that people had that gave them a little burst in that for a little while. Originally, when I was young this was often referred to as a magical black box. The legendary black box that would let you beat the market, beat other people, etc. All that stuff tends to, if it ever works, which usually it doesn't, tends to fade pretty fast. This also feeds into the world of pure quants, who put together formulas and the formulas feeding into the computer would lead them to beat the market or beat others.
With these details in mind, let's take a look at some emerging technology stocks, out of which the top picks are Paysafe Limited (NYSE:PSFE), Stem, Inc. (NYSE:STEM), and, Photronics, Inc. (NASDAQ:PLAB).
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Our Methodology
To compile our list, we first listed thirty tech companies with the highest market capitalization below $1 billion. They were then ranked through hedge fund sentiment generated from Insider Monkey's Q4 2022 survey covering 943 hedge funds, and the top ten emerging technology stocks are listed below.
Conduent Incorporated (NASDAQ:CNDT) is an American company headquartered in Florham Park, New Jersey. It enables different companies, such as transportation, healthcare, and others to run analytics, automate their services, and run operations.
By the end of last year's fourth quarter, 20 of the 943 hedge funds part of Insider Monkey's database had held a stake in Conduent Incorporated (NASDAQ:CNDT). Out of these, the firm's largest investor is Carl Icahn's Icahn Capital LP which owns 38 million shares that are worth $154 million.
Stem, Inc. (NYSE:STEM), Paysafe Limited (NYSE:PSFE), and Photronics, Inc. (NASDAQ:PLAB) are met by Conduent Incorporated (NASDAQ:CNDT) as an emerging technology stock seeing strong hedge fund sentiment.
PAR Technology Corporation (NYSE:PAR) is a software firm based in New Hartford, New York. It enables restaurants and other retail outlets to manage point of sale operations, customer loyalty programs, ordering, and other operations.
20 of the 943 hedge funds surveyed by Insider Monkey had invested in the firm during Q4 2022. PAR Technology Corporation (NYSE:PAR)'s largest hedge fund shareholder is Adam Wyden's ADW Capital which owns 1.6 million shares that are worth $43 million.
Clearfield, Inc. (NASDAQ:CLFD) is a communications equipment company based in Minneapolis, Minnesota. It designs and sells a variety of different technology products such as switches for managing fiber networks and other products to fiber providers.
As part of their December quarter of 2022 investments, 21 of the 943 hedge funds polled by Insider Monkey had held a stake in Clearfield, Inc. (NASDAQ:CLFD). Richard Driehaus's Driehaus Capital is the firm's largest shareholder in our database since it owns 544,014 shares that are worth $51 million.
GoPro, Inc. (NASDAQ:GPRO) is one of the most popular technology companies and one that is a household name. Its wearable cameras are popular among users from all walks of life, and the firm also provides software products to complement the hardware.
21 out of the 943 hedge funds surveyed by Insider Monkey had bought GoPro, Inc. (NASDAQ:GPRO)'s shares during 2022's fourth quarter. Out of these, the firm's largest investor is D. E. Shaw's D E Shaw which owns 3.6 million shares that are worth $18 million.
Benchmark Electronics, Inc. (NYSE:BHE) is a product design and engineering services provider and is based in Tempe, Arizona.
Insider Monkey dug through 943 hedge funds for Q4 2022 and found out that 21 had bought a stake in the company. Benchmark Electronics, Inc. (NYSE:BHE)'s largest hedge fund investor is Israel Englander's Millennium Management which owns 834,063 shares that are worth $22 million.
Paysafe Limited (NYSE:PSFE), Benchmark Electronics, Inc. (NYSE:BHE), Stem, Inc. (NYSE:STEM), and Photronics, Inc. (NASDAQ:PLAB) are some great emerging technology stocks according to hedge funds.
