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So far, 2022 has not been kind to tech stock investors. Macroeconomic factors like the Russia/Ukraine conflict, persistent supply chain issues, and record inflation have beaten-down tech stocks to a pulp. Even traditionally invincible names like Apple, Google and Amazon are down 40% or more. However, it’s times like these when it’s especially important to look at the bigger picture.

The technology sector has been one of the best performers over the past decade. Additionally, with initiatives like AI, edge computing, and automation, this sector shows little sign of slowing down. For investors with strong conviction, this could actually be a great time to scoop up a handful of beaten-down tech stocks. There are a few four stocks in particular that are trading at heavily discounted prices. Let’s take a look.

Beaten-Down Tech Stocks to Put on Your Watchlist

No. 4 Coinbase (Nasdaq: COIN)

Investing in Coinbase is basically a bet on the future of crypto and the DeFi movement. If you believe that the DeFi movement will eventually take over, then buying Coinbase is a no-brainer. That’s because Coinbase is essentially the only publicly-traded crypto company. Its revenue moves almost directly in line with the crypto markets.

By this point, it’s clear that the cryptocurrency industry moves in waves. Just like most markets, there are long periods of bull markets. This is then almost always followed by bear markets. Basically, the more that people are trading crypto, the more valuable Coinbase becomes. We saw this in 2021 when Coinbase posted total annual revenue of $7.84 billion and a net income of $3.62 billion.

Coinbase is also one of just a few that holds crypto assets on its balance sheet. When these assets grow in value, Coinbase becomes more valuable. However, when they decline in value, so does Coinbase.

Right now, the tide is going out on cryptocurrency. Bitcoin has shed over half of its value over the past couple weeks. Some cryptos, like TerraUSD, have even collapsed altogether. This is why investors are so sour on Coinbase.

However, there’s a good chance to believe that the tide will turn again for crypto. We’ve seen it happen dozens of times over the past decade. When that happens, Coinbase will quickly transition from one of the most beaten-down tech stocks to a highly profitable company.

No. 3 Nvidia (Nasdaq: NVDA)

Nvidia seems to be unfairly lumped in with other beaten down tech stocks. Just like most other tech stocks, it’s down 40% YTD. However, Nvidia has released practically no negative news. In fact, its Q1 2022 report showed 106% year-over-year (YOY) profit growth. It reported a quarterly income of $7.64 billion (+52% YOY) and a net income of $3 billion (+106% YOY).

It’s also not like Nvidia’s market is going anywhere. Nvidia is a global leader in artificial intelligence hardware & software. Its products are mainly used for mobile computing, gaming, and automotive industries. Thanks to initiatives like the metaverse, EVs and 5G, each of these markets is expected to grow at a rapid pace. Due to the size of these markets, Nvidia could have a total addressable market as big as $1 trillion. Now could be an incredibly rare time to scoop up this beaten-down tech stock for just 44 times earnings.

The post These 4 Beaten-Down Tech Stocks Should Pay Off in The Long Run appeared first on Investment U.

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By: Teddy Stavetski
Title: These 4 Beaten-Down Tech Stocks Should Pay Off in The Long Run
Sourced From: investmentu.com/beaten-down-tech-stocks/
Published Date: Tue, 17 May 2022 14:01:20 +0000

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