Finding good stocks even at low prices is not easy. Shares of established companies are often bid by investors for well over $20 a share, and often trade for hundreds of dollars.
However, it’s not impossible to find blue-chip stocks at low prices. Investors willing to be bold can take a chance on promising stocks that perhaps haven’t grown enough or been around long enough to fascinate Wall Street. These are risky companies, but they lay the foundation for long-term success and offer investors more upside potential than typical big-name companies.
These two attractive technology stocks with real potential can be purchased for less than $20 per share.
1. Soundhound AI
Soundhound AI (Thorn 1.09%) The company enters 2024 with rapid growth after posting an 80% year-over-year increase in fourth-quarter revenue to $17 million. The company specializes in managing artificial intelligence (AI) for audio applications such as music and speech recognition, language translation, and voice assistants. The company partners with a variety of automotive and restaurant brands, as well as other consumer companies. snap.
SoundHound invests aggressively in research and development. Management believes that its technology is superior to its competitors and that patents protect its competitive advantage.
The company predicts its addressable market will grow to $160 billion in the second half of the decade due to the rise of connected devices and the further integration of voice AI across many industries. That’s plenty of opportunity for a company with annual sales of just $46 million and a market cap of just $2.75 billion.
Investors should monitor the company’s financial condition over the long term. SoundHound’s aggressive R&D investments have led to debt, and management is issuing stock to raise funds.
SoundHound burned just $14 million last quarter, so it should be able to buy management time with its existing cash. Investors probably don’t want SoundHound to keep racking up debt while wasting money. This is because the company will not be able to repay its debt unless it improves its balance sheet. It’s something to see.
Still, if SoundHound can continue to grow without major financial damage, the long-term benefits may be worth the risk.
2.Ion Q
AI and other demanding technologies are pushing the boundaries of what modern computers can do. ion Q (IONQ -3.15%) is one of the companies developing quantum computing technology, the next generation of computers.
Today’s computers are binary. Fundamentally, everything in a computer language is 1 or 0. Like a light switch, it’s either on or off.
Quantum computing uses quantum mechanics to break that rule. These switches are not on or off, but can be in between, in any number of combinations, like dimmable light switches.
This dramatically speeds up computers’ data processing, which could be a game-changer for AI and other new applications. IonQ has been developing quantum computers since 2015, but is still a very young company with revenue of only $22 million in 2023.
As IonQ’s development progresses, revenue is expected to nearly double to $41 million this year, with bookings of up to $90 million expected. The risk lies in where IonQ ends up landing in the competitive landscape. This $2 billion company is a lottery ticket in this high-potential field.
investment game plan
You may have noticed that both companies have very little revenue. Again, they have the potential to lead in their respective fields, but these are very early investment opportunities. Investors should approach stock prices with caution, as they are likely to fluctuate.
Consider a dollar-cost averaging strategy, where you buy a small amount at a time to average out your position while prices are rising or falling. You can’t set a perfect minimum price, but you won’t overpay for the maximum price.
If these companies can execute and prove themselves over the next few years, it will be a win-win.
Justin Pope has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned. The Motley Fool has a disclosure policy.