It has been a rough start to the year for the tech sector, as companies have been hit hard by tariffs, trade tensions with China that have axed the flow of essential rare earth metals to the United States, and more. The benchmark Technology Select Sector SPDR Fund (NYSEARCA: XLK), a broad proxy for the entire sector, has plunged by about 10% year-to-date (YTD) while the S&P 500 has fallen by only 5% overall during the same period.
Investors may find it hard to shake their interest in the tech space. After all, major tech names like NVIDIA Corp. (NASDAQ: NVDA) have in recent years been among the very best-performing U.S. equities.
Even as some investors are turning to defensive plays like utilities names or gold exchange-traded funds (ETFs), there may still be opportunities in the tech space amidst the market turmoil.
One place to look for prospects in tech is in the value bin. Companies whose share prices have been hit especially harderal months may offer more compelling value metrics than other tech firms in the last sev notoriously priced at a premium. Of course, one concern about these value-friendly tech names is whether they have solid fundamentals and a good chance of reversing course.
To make that assessment, investors might turn to Wall Street analysts, looking for companies that have strong ratings or price targets. Below are three tech companies with a combination of compelling value and analyst interest.
Crypto Miner with AI Ambitions Sees Analyst Upgrades Despite 44% YTD Drop
[content-module:Forecast|NASDAQ: HUT]Data center company Hut 8 Corp. (NASDAQ: HUT) is perhaps best known for its cryptocurrency mining operations, but it has a significant business interest in artificial intelligence applications as well. Shares are down about 44% YTD as the company has launched American Bitcoin Corp., a majority-owned subsidiary focused on industrial-scale Bitcoin mining in partnership with Eric Trump and Donald Trump Jr.
The recent selloff of Hut 8 has positioned the firm with a compelling price-to-sales (P/S) ratio of 1.89 and a price-to-book ratio of 2.24. Investors have boosted their short bets on HUT shares by close to 10% in the last month, and the company has short interest of under 14% of the float.
At the same time, analysts are broadly optimistic about Hut 8; indeed, in April alone, analysts from four different institutions either initiated Buy ratings or increased pre-existing ratings of the stock. Hut 8 ends the month with all 13 analyst ratings set at Buy and a consensus price target about 125% above the current share price.
Investors bullish on cryptocurrencies—or data center operations more broadly—may find Hut 8 to be particularly enticing.
Essential Semiconductor Products Near All-Time Low P/E Ratio
[content-module:Forecast|NASDAQ: PLAB]Photronics Inc. (NASDAQ: PLAB) makes photomasks used in the manufacturing of integrated circuits and serves clients throughout the semiconductor industry. Shares have fallen by about 24% YTD as tariff developments have hit the semiconductor space particularly hard. However, Photronics' products remain critical for its semiconductor manufacturer customers.
The declining share price has brought Photronics' price-to-earnings (P/E) ratio to a level near its all-time low. The firm's forward P/E ratio is roughly 7.94. Add to that the fact that analysts expect the share price to nearly double and a Buy rating, and investors may wish to take a closer look at a company poised to thrive when the industry rebounds.
Satellite Firm Positioned Well in Fast-Growing ESA Space
[content-module:Forecast|NASDAQ: GILT]International satellite-based broadband communications tech outfit Gilat Satellite Networks Ltd. (NASDAQ: GILT) has a different share price trajectory than the firms above; GILT stock has risen by about 4% YTD, bucking the broader tech trend. Still, its P/S ratio is a modest 1.18, indicating it may be undervalued.
One reason for the upward motion in GILT shares is the company's recent acquisition of Stellar Blu, which gave it a key advantage in the fast-growing electronically steered antennaich (ESA) space, wh is essential to military and defense applications.
Indeed, Gilat management sees significant top-line growth potential from the defense sector going forward. Analysts from Needham & Co. and William Blair support this expectation, as they've given GILT a Buy rating and a consensus price target almost a third higher than current price levels.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
