Technology stocks recently saw a significant pullback as investors weighed valuation concerns and safer opportunities presented by rising Treasury bond yields . The tech sector has driven impressive gains for the market over the last year, and it’s not unreasonable to take a cautious approach to stock buying amid signs of volatility and uncertainty about how stimulus funds and monetary policy might shake market performance…
On the other hand, investors who identify high-quality growth stocks and seize opportunities created by market turbulence to build their positions should enjoy very strong performance over the long term. With that in mind, read on for a look at three fast-growing tech companies that seem primed for success.
The last year has brought twists, turns, and big pricing swings for shareholders of Impinj (NASDAQ:PI). The specialist in radio-frequency identification (RFID) products had been gaining traction in the retail and airline industries, but demand over the last 12 months has been very uneven as a result of the pandemic.
Now, it looks like some of the headwinds that hindered the company are easing, and customers are starting to increase orders again. Stronger pricing power in the semiconductor space driven by new technology cycles also suggests a more favorable operating backdrop for Impinj.
The company’s RFID tag, sensor, and software technologies allow retailers to track and analyze product trends with a new level of detail. Businesses including Zara and Macy’s already use Impinj’s solutions to keep better track of their inventory, provide product availability info for customers, and determine whether to move goods between in-store and e-commerce channels.
Omnichannel has never been more important for the retail industry, and being able to shift goods to meet consumer demand where it’s happening and predict where demand is heading will become increasingly important. RFID could also see adoption ramp up in industries including healthcare, hospitality, and manufacturing — potentially creating huge growth catalysts for Impinj. With companies just starting to use advanced data analytics, RFID could find new uses in nearly every industry, and Impinj is delivering technologies for a market with explosive possibilities.
2. Himax Technologies
Himax Technologies (NASDAQ:HIMX) is another chip specialist that should benefit from strong demand in the semiconductor space. The company generates most of its revenue from the sale of display drivers, which determine the colors displayed by pixels on television screens, mobile devices, and other hardware.
Himax stock has roughly tripled over the last year, but the company’s market capitalization still sits at roughly $2.5 billion, and it looks like the valuation has room to run . Even after the stock’s impressive rally, shares trade at roughly 12 times this year’s expected earnings and two times expected sales. These levels still look attractive in the context of strong performance for the core business and growth opportunities in new product categories.
The market for display drivers has historically been somewhat cyclical, and that raises questions about what stage in the upcycle Himax’s business is in. While the automotive display market remains pressured and the television market probably won’t be an explosive growth source, the company looks poised to benefit from a strong upgrade cycle in the mobile market. 5G is already driving an uptick in mobile device sales, and the rollout and overall impact of the next-generation technology are in their early stages. The company’s sales surged roughly 57.7% year over year in the fourth quarter, and guidance for sequential growth between 5% and 10% in Q1 suggests momentum for display drivers will continue in the near term.
The company’s engineering and research teams have also spent years working on…
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