Have $5,000? These 3 Stocks Could Be Bargain Buys for 2024 and Beyond
$5,000 might not seem like a lot of money in the stock market, where single shares of some companies can cost hundreds or thousands of dollars. However, at the end of the second quarter, the value of the average funded account on Robinhood Markets was only $5,773, so smaller retail investors are still scooping up a lot of stocks. That shouldn't be too surprising, since Robinhood's commission-free model and fractional share options make it much easier to build diversified portfolios with just a little cash.
If you have about $5,000 that you're ready to invest, I'd suggest you consider buying these three undervalued tech stocks today: MicroStrategy (NASDAQ: MSTR), Micron Technology (NASDAQ: MU), and HP (NYSE: HPQ).
The Bitcoin play: MicroStrategy
MicroStrategy was once a slow-growth data software provider that was struggling to keep pace with Microsoft and Salesforce. But four years ago, it shifted gears and started hoarding Bitcoin.
As of July 31, MicroStrategy held a whopping 226,500 Bitcoins. Those coins, which it bought for a total cost of $8.3 billion (or an average cost of $36,821 per coin) are now worth $13.8 billion. That's 37% of the company's enterprise value of $37.2 billion as of this writing.
Crypto bulls believe the value of MicroStrategy's Bitcoin holdings will head even higher and offset the slower growth of its software business. It's gradually expanding its higher-growth subscriptions to offset its declining on-site license and support revenues.
Over the next few years, analysts expect MicroStrategy's core software business to barely grow its revenue and rack up more losses. They also anticipate it will take on more debt and issue more shares to fund further Bitcoin purchases.
Its stock might look expensive, trading at 78 times this year's sales. But if we ignore its software business and only focus on its Bitcoin holdings, it could be deeply undervalued if Bitcoin's price skyrockets to $100,000 or even $1 million over the next decade.
The AI play: Micron Technology
Micron is one of the world's top manufacturers of DRAM and NAND memory chips. It isn't the largest company in either market, but it generally produces denser and more power-efficient chips than its top competitors, Samsung and SK Hynix.
The memory market is highly cyclical, and Micron's sales cooled off last year as PC shipments declined and the 5G smartphone upgrade cycle ended. That's why its revenue fell 49% in fiscal 2023 (which ended in September 2023) and it turned unprofitable.
However, over the past year, Micron's growth accelerated as the PC and smartphone markets stabilized and companies upgraded their servers to process the newest AI applications. In fiscal 2024, its revenue jumped 62% and it turned profitable again.
In fiscal 2025, analysts expect its revenue to rise 52% as its adjusted EPS rises nearly sevenfold. Based on that outlook, Micron trades at just 11 times forward earnings -- which makes it a lot cheaper than leading AI chip plays like Nvidia.
The PC play: HP
HP is one of the world's top producers of PCs and printers. Its consumer-facing business experienced a major growth spurt during the pandemic as more people upgraded their hardware to work from home, but some of that growth was offset by the disruption of its commercial-facing businesses. In its fiscal 2022 and fiscal 2023 (which ended last October), HP's revenue declined as its consumer sales fizzled out and macroeconomic headwinds throttled the recovery of its commercial business.
That pressure drove HP to cut costs and buy back more shares to boost its adjusted EPS -- but that figure only grew by 8% in fiscal 2022 and fell by 18% in fiscal 2023. For fiscal 2024, analysts expect its revenue to stay flat as its adjusted EPS grows just 3%. That outlook seems gloomy, but trading at 10 times forward earnings, HP's stock looks undervalued, and its dividend at current share prices offers an attractive forward yield of 3.1%.
Over the next few years, HP's profit growth should accelerate again as it prunes its workforce, streamlines its PC portfolio, launches more subscription-based services, and rolls out new products for the higher-growth hybrid work, gaming, industrial graphics, and 3D printing markets. Therefore, it could be a smart move to buy HP's stock before its next growth cycle begins.
Should you invest $1,000 in MicroStrategy right now?
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, HP, Microsoft, Nvidia, and Salesforce. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Have $5,000? These 3 Stocks Could Be Bargain Buys for 2024 and Beyond was originally published by The Motley Fool