Amidst market uncertainties, investing in companies at the edge of technological innovation offers a strategic advantage. These investments can provide game-changing returns during a market rebound. Here, the focus is on three companies with stability and growth in their respective niches.
The first company has solidified its market presence with impressive revenue gains in the retail and merchandise sectors. A recent legal victory enhancing financial stability further bolsters its fundamental solidity. On the other hand, the second company has capitalized on the rising demand for AI and networking solutions. It is driving substantial revenue growth and margin expansion. Finally, the third company has record-breaking sales and profitability improvements. This points to its leadership in innovative display and control systems for diverse sectors, like live events and transportation.
Each company has solid financial performance and strategic foresight in navigating competitive landscapes and capitalizing on emerging market trends. For sustainable growth and market leadership, these companies have fundamental strengths and growth strategies. With that, these tech stocks to buy present compelling opportunities in today’s market.
Impinj (PI)
Impinj (NASDAQ:PI) leads in endpoint integrated circuits (ICs) and connectivity devices for identifying, locating and authenticating items. In Q1 2024, the company had sharp sequential growth in endpoint IC revenue, totaling $61.5 million. This surpassed expectations and indicated solid demand in the retail apparel and general merchandise sectors.
Additionally, Impinj’s strategic focus on solution deployment in the retail and general merchandise sectors has proven fruitful. A major North American retailer’s acceleration in RAIN tag usage reflects Impinj’s technology’s increasing adoption and scalability. This sector-specific growth, ongoing solution deployments and product expansions mark Impinj’s fundamental capability to capitalize on market leads. Such strategic initiatives are vital in deriving market share gains and boosting the top line over the medium to long term.
Further, Impinj’s legal settlement with NXP Semiconductors (NASDAQ:NXPI) ended a longstanding patent dispute and boosted its financial standing. The one-time $45 million payment and annual licensing fee provide Impinj with added flexibility. This settlement reflects Impinj’s proactive approach to safeguarding its intellectual property rights to solidify its competitive edge.
Overall, Impinj is on the tech stocks to buy list due to its strong market position and recent legal settlement, which boosts growth stability.
Celestica (CLS)
Celestica (NYSE:CLS) leads in design, manufacturing and supply chain solutions across markets. In Q1 2024, the company had a top line of $2.21 billion, surpassing expectations and marking a 20% annual increase. This growth was primarily driven by the Connectivity & Cloud Solutions (CCS) segment, which had a solid 38% revenue increase against Q1 2023. It reflects strong demand in both enterprise and communications end markets.
Moreover, this growth marks continued demand for AI compute products from hyperscaler customers. Similarly, the communications end market also saw a robust 17% revenue boom. A heightened demand for high-performance computing and networking products supports it. Financially, Celestica’s operating margin improved to 6.2% (+1% annually) in Q1 2024, up 1% from the previous year. This is the first time quarterly margins have exceeded 6%. This margin expansion was driven by improved profitability across the CCS and Advanced Technology Solutions (ATS) segments. Hence, the performance emerged from a favorable product mix and enhanced production efficiency.
To summarize, Celestica is on the tech stocks to buy list due to growth in AI compute products, networking solutions and margin expansion.
Daktronics (DAKT)
Daktronics (NASDAQ:DAKT) prevails in electronic scoreboards, programmable display systems and large-screen video displays. The company had a record sales volume of $215.9 million for Q4 fiscal 2024. It is marking a 2.9% increase from the previous year. For fiscal 2024, sales grew by 8.5% to $818.1 million. The company progressively captured a greater share of its serviceable addressable market (SAM). It is particularly prevalent in the live events and transportation sectors.
As a result, gross margin improved to, for the full year, 27.2% from 20.1% in fiscal 2023. This improvement comes from strategic pricing actions, manufacturing efficiencies and stable supply chain operations. Similarly, operating income quadrupled to $87.1 million in 2024. That indicates effective cost management and operational efficiency gains despite higher expenses related to incentive compensation and staffing increases. Finally, the working capital ratio improved to 2.1 to 1 at the end of Q4, up from 1.6 to 1 in Q4 2023. This improvement suggests effective management of inventory levels and receivables.
To conclude, Daktronics is among the top tech stocks to buy because of its record sales volumes and significant margin improvements.
On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.