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Are you eagerly awaiting tech stock buying opportunities in the next bear market?
If so, you may get your wish.
Although technology stocks are unbelievably expensive right now, enough risk factors at play that we may be justified in hoping that their prices will come down.
Interest rates are rising.
Tech companies’ earnings aren’t growing.
An overall sense of panic has emerged, driven by rising treasury yields.
The more of these kinds of factors emerge, the likelier it becomes that we will be gifted with good buying opportunities in the future. In that spirit, here are three technology stocks that will likely be worth buying in the next tech bear market.
Shopify Inc (TSX:SHOP) is a Canadian e-commerce company that currently sells for $71 per share. It previously went as high as $220 per share, but its stock fell during the 2022 tech bear market. Today, SHOP is down 66% from its all-time high – about $219. It’s already cheaper than it was for much of its history. In a new tech bear market, it could fall further still.
How low could Shopify go?
Well, its low during the 2022 tech bear market was $35. If we see a new tech bear market that takes us to the same market levels as were seen in November 2022, then we could visit such a price on Shopify stock.
With that said, SHOP might not take as big a beating this year as it did in 2022. Since the 2022 bear market, SHOP has regained its high growth and has become free cash flow positive. Perhaps the best buying in this stock was in the past.
Kinaxis Inc (TSX:KXS) is a Canadian technology company that develops supply chain management software. What the software does is keep track of vital supply chain components, such as raw inputs, inventory, and equipment. It also keeps track of sales trends, so it can produce useful insights that tell a business owner/manager how much inventory or inputs they need to keep their business running for a given period of time.
Kinaxis is having a very good year this year. In its most recent quarter, it delivered:
- $105 million in revenue, up 26%.
- $63.6 million in gross profit, up 28%.
- A $2.5 million net loss, improved by 3%.
- $-0.09 in diluted EPS, improved by 3%.
- $13.9 million in cash from operations, up 66%.
Alphabet Inc (NASDAQ:GOOG) is a U.S. tech stock that crashed hard in the 2022 tech bear market. That year, the company’s revenue growth stalled out and its earnings growth turned negative. This year, the company’s fortunes turned around, and its stock started climbing again. Much like in 2021, Google is today profitable and growing. In its most recent quarter, it delivered:
- $74.6 billion in revenue, up 7%.
- $18.4 billion in net income, up 15%.
- $1.44 in diluted EPS, up 19%.
- $21.8 billion in operating income, up 12.3%.
Overall, it was a good showing. If Google can keep these results up, it may be a good buy in the next bear market.