We recently compiled a list of the 10 Best Low Priced Technology Stocks To Buy Now. In this article, we are going to take a look at where Applied Digital Corporation (NASDAQ:APLD) stands against the other low-priced technology stocks.
The Rising Significance of Technology: Is Now the Time to Invest?
The technology sector plays a crucial role in the modern economy, encompassing a wide range of industries. This sector can include businesses involved in electronics, software, artificial intelligence (AI), and information technology, among others. As companies increasingly rely on technological innovations to enhance productivity and efficiency, the technology sector is poised for growth as it becomes essential for both consumers and businesses.
Recent trends indicate a significant shift towards AI, cloud computing, and cybersecurity as key drivers of growth. Enterprise spending in these areas is expected to increase, driving growth in the global tech market.
Generative AI is becoming more important than ever as a vital tool for many organizations, marking a significant shift from experimentation to practical application. According to the latest McKinsey Global Survey on AI, conducted in the first half of 2024, 65% of respondents indicated that their companies are now regularly utilizing generative AI, nearly double the figure from just ten months prior. This surge in adoption reflects a growing belief in the technology’s potential, with 75% of respondents anticipating that generative AI will bring about substantial changes in their industries in the coming years. The overall adoption of AI has also seen a notable increase, rising from around 50% to 72% over the past year.
Technology-oriented stocks are set to achieve another impressive year by the end of 2024, according to U.S. Bank Asset Management. As of mid-December, the S&P 500 Communication Services and Information Technology index has risen over 40% year-to-date, following a remarkable 57% increase in 2023. Although technology stock performance slowed down in the third quarter of 2024, it regained momentum in the fourth quarter. According to Rob Haworth, senior investment strategy director for U.S. Bank Asset Management, corporate investments in artificial intelligence (AI) applications continue to drive this growth, even though the pace of AI spending eased slightly in the third quarter.
Investors are attracted to the tech sector because of its innovative nature. Terry Sandven, chief equity strategist with U.S. Bank Asset Management, emphasizes that technology is crucial for improving speed and efficiency across various industries. While the sector can experience short-term fluctuations, Sandven remains confident about its long-term prospects, as companies seek growth through technology rather than simply hiring more staff. Haworth shares this optimism, noting that technology stocks are central to current economic expansion and benefit significantly from business capital investments. However, he notes that investors still need to be careful in their approach to this sector. While some tech startups achieve great success, others may fail to get off the ground.
Methodology
To compile our list of the 10 best low-priced technology stocks to buy now, we used the Finviz stock screener. We sorted our results based on market capitalization and picked the top 25 technology companies with a share price of under $10 as of December 24, 2024. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 10 best low-priced technology stocks to buy now were then ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Applied Digital Corporation (APLD) The Best Low Priced Technology Stock To Buy Now?
An overhead view of a large-scale data center with rows of servers and blinking lights.
Applied Digital Corporation (NASDAQ:APLD) is a technology company that specializes in designing and operating data centers and cloud services tailored for high-performance computing (HPC) and artificial intelligence (AI). The company focuses on providing advanced infrastructure solutions that are flexible and reliable, essential for supporting the growing demands of the AI revolution. Applied Digital Corporation (NASDAQ:APLD) is one of the best low-priced stocks to invest in.
In September 2024, Applied Digital Corporation (NASDAQ:APLD) secured a significant $160 million in private placement financing from institutional and accredited investors, including NVIDIA. This strategic funding enhances the company’s financial strength and positions it as a leader in the accelerated computing space. With this capital, Applied Digital Corporation (NASDAQ:APLD) aims to scale its transformative data center and GPU cloud solutions.
For its fiscal first quarter of 2025, which ended on August 31, 2024, Applied Digital Corporation (NASDAQ:APLD) reported revenues of $60.7 million, a remarkable 67% increase from the previous year. The Cloud Services Business contributed $25.9 million to this revenue, supported by the addition of two new GPU clusters, bringing the total to six clusters at the end of the quarter. Each cluster contains 1,024 GPUs.
Additionally, on December 17, 2024, Applied Digital Corporation (NASDAQ:APLD) announced a major milestone in developing its HPC data center in Ellendale, North Dakota, with the successful energization of its main substation transformer. This step marks a critical step toward bringing the Ellendale HPC campus fully online and enabling it to support HPC and AI workloads.
Given its strong financial performance, strategic partnerships, and commitment to innovation in cloud services and data center technology, Applied Digital Corporation (NASDAQ:APLD) presents an attractive investment opportunity. The company’s focus on scalable and efficient infrastructure solutions positions it well to capitalize on the growing demand for AI and HPC services in various industries.
Overall, APLD ranks 7th on our list of the best low-priced technology stocks to buy now. While we acknowledge the potential of APLD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APLD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
