Goldman Sachs Recommends 5 Undervalued Tech Stocks Every Investor Should Own Instead of Nvidia

Goldman Sachs recently highlighted several cheap tech stocks that investors may want to consider buying following earnings reports. With 92% of S&P 500 companies reporting quarterly results and 79% beating estimates, the information technology sector has seen significant growth. Some of the recommended stocks include Microsoft, Teledyne Technologies, Arista Networks, Toast, and AppLovin.

Teledyne Technologies, despite a disappointing earnings report, is considered a long-term cash-flow compounder with significant growth potential ahead. Analysts believe that growth will accelerate in the second half of 2024 and into 2025, making the stock a compelling buy at current levels. Microsoft, on the other hand, is poised for further upside following its strong earnings report. With a large total addressable market and growing demand for its cloud-based services, the tech giant is seen as one of the most attractive investment opportunities.

Arista Networks has seen a positive first-quarter earnings report, with artificial intelligence taking center stage as a major catalyst for growth. Analysts are confident in the company’s AI position and revenue targets for 2025, leading to an optimistic outlook for the quarters ahead. With improving demand trends and revenue visibility, Arista Networks is expected to beat expectations in the coming months.

Toast, a leader in next-generation restaurant software, impressed analysts with solid results and positive momentum. The company’s growth prospects have been a point of contention since its IPO, but strong EBITDA and continued momentum indicate a bright future. Lastly, AppLovin is expected to continue compounding growth at above-average rates, with opportunities for further expansion in the advertiser space and AI model improvements.

Overall, these underappreciated tech stocks present compelling investment opportunities for those looking to capitalize on the growth potential in the technology sector. Despite market volatility and economic uncertainties, these companies have shown resilience and strong fundamentals that make them attractive buys for long-term investors. By carefully considering the research and insights provided by Goldman Sachs and other analysts, investors can make informed decisions to build a diversified and profitable portfolio in the tech industry.