Every business sector has its leading stocks, and you should make a point of holding at least some exposure to all of them.
If your priority is growth, however, no industry provides as many long-term growth opportunities as the technology sector does. After all, these companies are changing every aspect of our lives for the better.
To this end, here's a look at three tech stocks with serious potential for market-beating gains. All three are a bit off the beaten path, but that's the point. If you can stomach the risk and volatility they're sure to continue dishing out, they could turn as little as $3,000 right now into a small fortune further down the road.
You've likely heard the term "quantum computing," but you've probably not heard much about its commercialization. That's largely because the tech just wasn't yet ready for paying customers.
That's not quite the case any longer, though. IonQ(NYSE: IONQ) has not only figured out how to make quantum computing solutions practical, but it's also selling them! The company booked $6.1 million worth of revenue in its third quarter ending in September and achieved $26.3 million in new bookings in the same three-month stretch. Both are not only up from year-ago levels, but the growth of both numbers is also accelerating.
OK, that's still not a ton of money. However, this isn't a company that's been selling a marketable product for very long. Many prospective customers who may be ready for such powerful solutions are still figuring out how to best integrate them now that they're available.
The market's gelling rather quickly, though, with significant growth right around the corner. An outlook from Precedence Research suggests the quantum computing market will swell from just under $14 billion this year to $125 billion in 2023. That's annualized growth of nearly 37%, jibing with an outlook from Data Bridge Market Research.
And IonQ is poised to capture at least its fair share of this growth. Analysts expect full-year sales growth of nearly 95% for 2023 to be followed by top-line growth of 79% in 2024.
Read between the lines: The world's clearly figuring out it can leverage this young tech to produce meaningful growth; this technology is proving particularly promising in fields like drug development research cybersecurity, and even financial modeling, all of which requires the processing of a great deal of data in a short period of time.
Despite its moniker, Toast(NYSE: TOST) isn't a company that specializes in a simple breakfast food. It's a software company, and a good one. The organization offers the restaurant industry a suite of tools that facilitate more operating efficiency, as well as a better guest experience.
It sounds like a solution to a problem that doesn't exist. The restaurant business isn't what it used to be, though. It's complicated, as well as wildly competitive, particularly now that ordering and even delivery-booking has largely moved online. Restaurants need tech that can keep up and simplify things so restaurant employees can focus on important matters -- like preparing food.
Meanwhile, although costs have always been a key concern in the low-margin restaurant biz, keeping them minimized is an outright requirement for any eatery that wants to survive these tough days. Despite the resumption of pre-pandemic norms, the tens of thousands of restaurants shuttered during the height of the COVID-19 pandemic aren't being reopened. Restaurant industry research firm Technomic says the United States' restaurant landscape will be lucky to simply maintain the number of locales up and running right now in 2024.
This challenge bears out in Toast's past and projected results. With restaurants needing to invest in any and every tool they can to remain competitive, analysts believe this year's sales growth pace of 41% will be followed by top-line growth of 26% next year.
This trajectory puts Toast on track to swing to a profit in 2026 too, which is a bullish catalyst in its own right.
3. Super Micro Computer
Last but not least, take a look at Super Micro Computer(NASDAQ: SMCI) if you've got some capital available to tuck away in a long-term growth prospect.
Just as the name suggests, Super Micro Computer makes a variety of computerized solutions. You won't find this brand of personal computers on the shelves at your nearest Best Buy, however. Its focus is limited to servers, data storage, artificial intelligence (AI) systems, and other enterprise-level technologies.
It's a competitive business, and the company is squaring off against much bigger (and deeper-pocketed) players. Super Micro Computer's clearly got an edge, though. Last fiscal quarter's revenue was up 14% year over year, despite the economic headwinds that are currently blowing, and the analyst community believes its sales growth will accelerate to a pace of 47% for the full-year ending in June. Next year's expected sales growth pace is a slower 27%, but that's still incredibly impressive.
The crazy part of this company's story? Unlike IonQ and Toast, Super Micro Computer is already profitable. It has been for some time, in fact, although the explosion in demand for AI systems and cloud computing solutions is proving a boon for the company's bottom line. Per-share profits are projected to grow from last year's $11.81 to $17.27 this fiscal year to $19.76 per share in fiscal 2025.
And even those numbers may not be optimistic enough. This company's in the habit of topping its profit estimates.
Crazier still is that you can step into this stock as cheaply as you can despite brewing growth for the AI and cloud computing industries. Super Micro Computer shares' current price near $289 is 30% below analysts' consensus target price of $375.20.
Seven of the 11 analysts following his stock, by the way, rate it a strong buy. You may want to take the hint.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Best Buy. The Motley Fool recommends Super Micro Computer and Toast. The Motley Fool has a disclosure policy.