In this piece, we will take a look at the ten best technology penny stocks to buy. If you want to skip our analysis of the technology industry, then head on over to 5 Best Technology Penny Stocks to Buy.
Technology is one of the biggest industries in the world and one that has been the most consequential to modern day life. Everyday items such as the smartphone have changed the way we live our lives from just a couple of decades back. At the same time, technology has enabled faster decision making and quicker information dissemination globally - contributing to the formation of a global village.
Naturally, this also means that technology companies are some of the biggest in the world both in terms of market capitalization and revenue. Some well known corporate giants which provide products and services related to networking, connectivity, and computing bring in billions of dollars in revenue each year. Some examples include Apple Inc. (NASDAQ:AAPL) which raked in $394 billion in revenue during its latest fiscal year, Microsoft Corporation (NASDAQ:MSFT) $198 billion during the 12 months ending in June 2022, Alphabet Inc. (NASDAQ:GOOG) brought in $282 billion, and Meta Platforms, Inc. (NASDAQ:META) earned $116 billion through net sales.
Due to the massive potential offered by technology, the sector is still expected to continue to grow despite the billions of dollars in revenue that the biggest firms bring in. According to research from Gartner, global information technology spending is slated to sit at a whopping $4.5 trillion this year, marking a 2.4% growth that was hampered by inflation and a tough macroeconomic environment, as it fell short of Gartner's estimates of a 5.1% annual growth. Within the spending estimates for 2023, software takes the largest share, with firms expected to funnel in $2.16 trillion this year.
So what is business software? Well, one major chunk of this spending goes towards enterprise computing platforms such as those offered by Oracle Corporation (NYSE:ORCL). These enable companies to streamline their operations, such as supply chain management, payroll, and human resource management. Other software spending goes to cloud computing platforms offered by Microsoft and Amazon.com, Inc. (NASDAQ:AMZN).
These latter bit of services are among the handful that is climbing up on the hype train surrounding artificial intelligence. Microsoft has made a couple of important announcements in this area. One of these includes a slew of upgrades to the Microsoft Cloud platform for nonprofits. These upgrades introduce an artificial intelligence assistant to manage virtual meetings and draft emails through data gathered from previous customer relationship management (CRM) use cases. Another upgrade focuses on the financial sector, with the technology firm having teamed up with the credit ratings agency Moody's to develop an AI powered tool for consolidating information from multiple sources to generate economic forecasts, credit risks, and reputational assessments.
On the other end of the technology spectrum, firms such as Grab Holdings Limited (NASDAQ:GRAB) are taking their own approach to technology. Grab, which offers a multitude of different applications under a single umbrella, is aiming to completely eradicate food packaging waste from its ecosystem by 2040. The firm has already reduced 23,800 tons of waste to date by encouraging the use of reusable cutlery among other strategies.
Since the world is all about artificial intelligence, the video streaming platform Vimeo, Inc. (NASDAQ:VMEO) is using AI to help creators make videos. Its new suite of tools that use AI will allow video makers to generate video scripts, fine tune videos by automatically removing elements such as a long pause, and use a built in display to easily narrate and keep eye contact with the camera.
Switching gears, there are nearly countless technology stocks that one can pick for investing. While investing should always be done after consulting a qualified professional, it does not hurt to look at the different kinds of stocks on the market. Even though today's piece will look at penny stocks, there are other kinds as well. One such category is cheap technology stocks - belonging to firms that do not have a significant difference between their share price and earnings per share. This indicates that the market does not believe their business model provides a significant upside for growth - but, on the flip side, these firms also tend to be quite stable at maintaining value. If you're interested, some cheap technology stocks that we've identified include Taoping Inc. (NASDAQ:TAOP), Arqit Quantum Inc. (NASDAQ:ARQQ), and CXApp Inc. (NASDAQ:CXAI).
But what if you wanted to look at what billionaires are doing and wanted to earn money through dividends? Well, after sifting through securities filings, some top technology dividend stocks that are popular with billionaires include none other than Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), and Applied Materials, Inc. (NASDAQ:AMAT).
Since there are literally thousands of technology companies, it's difficult to gauge what is going on in the broader industry by looking at a single firm. However, firms such as Accenture plc (NYSE:ACN) which deal in the broader information technology sector can provide valuable insights. Therefore, here's what the firm's management had to say during its latest earnings call:
Finally, moving to the metaverse and the ongoing tech revolution. We’ve talked about the importance of artificial intelligence in building the digital core for our clients. While generative AI has recently burst into the popular imagination, at Accenture, we’ve been working with the technology from its earliest stages and are already applying it at clients. For example, we’re working with a multinational bank to transform how it manages high volumes of post-trade processing e-mails every day. We are leveraging a generative AI solution as it is built to understand the context of e-mails with high accuracy. It automatically routes large numbers of e-mails, daily to relevant teams and draft responses with recommended actions and related information.
With these details in mind, let's take a look at some best technology penny stocks according to hedge funds.
10 Best Technology Penny Stocks to Buy
Our Methodology
To compile our list of the best technology penny stocks, we first narrowed down forty stocks with a share price lesser than $5 and the highest market capitalization among their peers. Then, the number of hedge funds that had invested in their shares as of Q1 2023 courtesy of Insider Monkey's database was determined. Finally, the firms were ranked by hedge fund sentiment and the top ten technology penny stocks are as follows.
GoPro, Inc. (NASDAQ:GPRO) is one of the most popular companies among extreme sports lovers. Its portable and mountable cameras allow users to record real time footage. It also provides a subscription service allowing users to edit and manage their content.
As of 2023's first quarter, 19 of the 943 hedge funds part of Insider Monkey's database had held a stake in GoPro, Inc. (NASDAQ:GPRO). Out of these, the firm's largest shareholder is D. E. Shaw's D E Shaw with a $20 million stake.
Along with Grab Holdings Limited (NASDAQ:GRAB), Vimeo, Inc. (NASDAQ:VMEO), and Marqeta, Inc. (NASDAQ:MQ), GoPro, Inc. (NASDAQ:GPRO) is a hot technology penny stock finding favor from hedge funds.
LivePerson, Inc. (NASDAQ:LPSN) sits right at the heart of today's hottest technology scene, conversational artificial intelligence. It uses this to facilitate the interaction between businesses and customers, and the firm announced in June 2023 that it will help healthcare clinics manage their call volumes.
After digging through 943 hedge fund portfolios for their March quarter of 2023 shareholdings, Insider Monkey discovered that 20 had bought and invested in the firm. Jeffrey Smith's Starboard Value LP is LivePerson, Inc. (NASDAQ:LPSN)'s biggest shareholder through owning $10 million worth of shares.
Aurora Innovation, Inc. (NASDAQ:AUR) is an American firm that is developing a self driving system. This aims to consolidate multiple driving platforms under a single umbrella, and the company announced in June 2023 that it is making its dataset of self driving information available to academics to spur research in the arena.
As of Q1 2023, 21 out of the 943 hedge funds part of Insider Monkey's database had held a stake in Aurora Innovation, Inc. (NASDAQ:AUR).
Nerdy, Inc. (NYSE:NRDY) is a software company headquartered in Saint Louis, Missouri. Its platform allows parents and students to connect with educators. The firm's first quarter results saw it raise its revenue guidance to a high end of $200 million for a 21% midpoint growth.
22 of the 943 hedge funds portfolios studied by Insider Monkey for their March quarter of 2023 shareholdings had invested in Nerdy, Inc. (NYSE:NRDY).
8x8, Inc. (NASDAQ:EGHT) is a software company that provides an application programming interface (API) to businesses and other entities for communications purposes. It's having a good 2023 so far, with several firms deploying its services.
After digging through 943 hedge funds for their Q1 2023 investments, Insider Monkey found out that 23 had held a stake in the company. Daniel Patrick Gibson's Sylebra Capital Management is 8x8, Inc. (NASDAQ:EGHT)'s biggest hedge fund investor since it owns a $60 million stake.
Vimeo, Inc. (NASDAQ:VMEO), 8x8, Inc. (NASDAQ:EGHT), Grab Holdings Limited (NASDAQ:GRAB), and Marqeta, Inc. (NASDAQ:MQ) make it to our list of best technology penny stocks.
