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What if I told you there are top-performing tech stocks that can hand you impressive returns for less than $10? When you think of tech stocks, chances are companies like Amazon, Apple, Facebook, Microsoft, and the like come to mind. While these are some of the heavy-hitters, they also tend to be on the pricier side.
Shares of Amazon, for example, are trading at $3,343. Apple and Microsoft are currently trading at $148 and $308 per share, respectively. They might not be as expensive to own as Amazon, but they still cost a pretty penny.
These smaller tech companies just aren't as profitable as those FAANG juggernauts. At least, not yet. And the best way to gauge these smaller stocks' true value is to look at where they are moving in terms of growth.
So today, we're taking a look at three things to find our best tech stocks: the stock trades for less than $10 per share; the stock has positive revenue growth; and the company has a focus on growing sales and marketing, which ties back into revenue.
Based on that criteria, these are the best tech stocks to buy under $10...
Best Tech Stocks Under $10, No. 3: AXT Inc.
AXT Inc. (NASDAQ: AXTI) is a company that designs, manufactures, and distributes the components and materials used in semiconductors. So, while it isn't at the center of the semiconductor industry, it is involved in the manufacturing process. And as semiconductors continue to play a more prominent part of everyday life, AXT will benefit from that.
Back in 2020, the semiconductor materials market was worth about $54.67 billion. By 2026, it's expected to reach $69.81 billion. That's only an annual growth rate of 4.17%. But the broader semiconductor market is expected to reach $573.44 billion by 2022, up from $440.39 billion just two years prior. And as technological advancements increase the need for these products, AXT will continue to play a role in that process.
But what makes this semiconductor materials supplier a solid investment is the growth the company is currently going through. AXT has grown its revenue for five quarters in a row, with its last quarter boasting 52% growth. And since the first quarter of 2020, AXT's diluted earnings per share (EPS) has increased by 1,201%. This, in turn, will raise AXT's share price.
And AXT is expected to build on that growth. For the third quarter, the company forecasts an annual increase in earnings on higher revenue. Quarterly earnings are expected to increase to $0.11 per share by the end of 2021 from $0.08 at the start. Revenue is expected to increase to $35.1 million, up 37.8% from the year prior.
Analysts forecast that AXT could move as high as $20 per share over the next year. If the company manages that kind of growth, you could see returns of roughly 130%.
Not bad for a stock that costs as much as a breakfast sandwich and a cup of coffee.
Best Tech Stocks Under $10, No. 2: Infinera Corp.
Infinera Corp. (NASDAQ: INFN) is revolutionizing how the world connects. It makes devices that can expand high-speed networks without laying more fiber cables.
Since June 2020, Infinera has only managed a 2% quarterly revenue growth year over year. While that might not be as impressive as AXT, Infinera is more of a cyclical stock.
Many of the fiber networks today transfer data at 100G to 200G speeds across long distances and 400G to 600G speeds across shorter distances. But carriers have started testing out 800G connections.
Only three companies offer those 800G upgrades: Infinera, Ciena, and Huawei. Huawei is out of the game because of trade blacklists and sanctions. That leaves Infinera and Ciena for carriers to choose from. So, it's likely that those companies will each get a share of the 800G contracts.
Infinera expects to outpace the growth of the broader optical market and, in turn, grow its revenue at an annual growth of 8% and 12% between 2020 through 2025.
If that happens, Infinera's share price could move as high as $15 - a potential gain of 93% within the next 12 months.
Best Tech Stocks Under $10, No. 1: Nokia Corp.
Nokia Corp. (NYSE: NOK) is a company that needs no introduction. It's been around since 1865, and it gained recent popularity as a meme stock. The company might have struggled a bit over the past five years, but eventually Nokia suspended its dividend in 2019 to free up more cash for 5G expansion.
The company's new CEO, Pekka Lundmark, is focusing on improving its cloud and networks business. And by targeting customers of Huawei, who suffered as a part of the company's blacklisting, Nokia was able to strengthen the 5G side of the business.
And the changes are making a difference.
Nokia's revenue climbed 4%, while adjusted earnings surged 167% year over year in the first half of 2021. By the end of 2021, the company's revenue and earnings are expected to rise 5% and 28%, respectively. And while Nokia hasn't reinstated its dividend yet, it could certainly do so if profits continue to move higher. That could entice some income investors to buy in.
Nokia's revival is just in time for the 5G market to expand. It's a cheap stock that is profitable - and growing. That's a winning combination for tech stocks.
And should Nokia continue to grow its revenue, there's no reason the company couldn't break out past its previous high of $9.79 per share and hit $12 or more - a gain just north of 100%.
While these are all excellent tech stocks under $10, we have one more bonus pick for you.
It's one of our top tech stocks, period. And while it isn't under $10, it could be one of our best plays of them all. It's a winning opportunity you don't want to miss out on.