Since closing at a record high less than 10 days ago, the benchmark S&P 500 index has been on the back foot. For the moment, it's not looking like a whole lot more than a healthy mid-rally correction. After all, it had logged almost 40% of gains this year so far, and some questions were starting to be asked about the short-term health of the rally.
An increasing reliance on a few heavyweight tech stocks over recent months, sketchy earnings in the past few weeks, and a cyclical shift from large-cap to small-cap have all combined to test the bulls. Yesterday's 2.3% drop for the S&P 500 alone made it its worst day since 2022.
But this is an entry opportunity for those of us on the sidelines who remain bullish on equities through the rest of the year and into 2025. Here are three tech stocks in particular worth considering at a discount.
Toast's Impressive Run Despite Recent Dip
Toast (NYSE: TOST), the restaurant software company, has been on a solid run since markets turned north en masse last November. Though an 8% drop in Wednesday's session wouldn't have made for pleasant viewing, the stock is still up more than 75% in that timeframe.
It's worth noting that only last week, the team at Mizuho raised their rating on Toast stock from Neutral to Outperform. This was interesting timing, as the stock was right on the edge of breaking through the upper end of the range it's been stuck in since bottoming out from 2022's drop.
The team there obviously sees little reason to doubt Toast's ability to achieve this milestone and gave the stock a fresh $33 price target. Thanks to the selloff over the past week, that's pointing to an attractive upside of some 30% from where Toast closed last night.
The Trade Desk Continues to Attract Bullish Analyst Sentiment
Shares of AdTech giant The Trade Desk (NASDAQ: TTD)have been trending upward since the start of 2023. By the start of this week, they'd gained an impressive 150%, and while yesterday's 11.5% drop will have been hard to stomach, several analysts have been weighing in on the Buy side recently.
Morgan Stanley, for example, reiterated its Overweight rating on the stock on Tuesday of this week while boosting its price target to $110. This echoed the note from the Wedbush team on Monday, who did the same.
Last week, Wolfe Research and Oppenheimer reiterated their Outperform ratings, the latter giving The Trade Desk a street-high price target of $120. Considering the stock closed below $90 last night, that's an upside target of more than 30%.
Broadcom: An Attractive Alternative to NVIDIA
To round off the list, we have another computer and technology stock. Broadcom (NASDAQ: AVGO) is known for its semiconductor products and was only this week singled out by Citi as one of the increasingly attractive alternatives to NVIDIA (NASDAQ: NVDA).
This may shed light on Broadcom's multi-year surge, which saw gains exceeding 350% from 2022 through last month, and its recent 20% decline. For those observing from the sidelines, now might be the ideal moment to get involved.
Like with the others on this list, several analysts have been clamoring over each other to call it a screaming buy. This month alone, Oppenheimer, Cantor Fitzgerald, TD Cowen, and Rosenblatt Securities have all reiterated their Buy or Outperform ratings on Broadcom. When it comes to the potential upside, it doesn't get much better; all gave it a price target of $200 or higher, with Rosenblatt's $240 suggesting they're targeting near-term gains of around 60%.
