With continued remote working trends and digital transformation, the technology sector is expected to grow significantly in the upcoming months. However, given the current market volatility, it could be wise to add quality tech stocks Wipro (WIT) and Nokia (NOK), currently trading under $10. However, not all low-priced stocks in this space are well-positioned to gain. DiDi Global (DIDI) and Katapult Holdings (KPLT) are best avoided because of their bleak near-term prospects.
It’s no surprise that the demand for advanced technology-based products and services increased exponentially amid the COVID-19 pandemic. As the COVID-19 cases continue to rise and several industries are undergoing a digital transformation, the technology industry could keep growing in the foreseeable future.
Yesterday, the tech-heavy Nasdaq fell 2.8% to 14,546.68, marking its worst trading day since March as treasury yields continued to rise and lawmakers in Washington continued their budget stalemate. However, according to Gartner, Inc. (IT) report, governments globally are expected to spend $557.3 billion in 2022 on information technology, representing a 6.5% year-over-year rise.
Given this backdrop, it could be wise to scoop up the shares of fundamentally sound tech stocks Wipro Limited (WIT) and Nokia Corporation (NOK), which are currently trading under $10. However, low-priced stocks in this space DiDi Global Inc. (DIDI) and Katapult Holdings, Inc. (KPLT), are best avoided because of their weak near-term prospects.
Stocks to Buy:
Wipro Limited (WIT)
Based in Bengaluru, India, WIT operates as information technology (IT), consulting, and business process services company worldwide. It operates through three segments: IT Services, IT Products, and India State-Run Enterprise Services (ISRE).
WIT launched the Wipro-Google Cloud Innovation Arena on September 17. This collaboration between Wipro FullStride Cloud Services and Google Cloud is expected to provide in-house technical expertise, ensure seamless cloud adoption, and accelerate innovation to drive business transformation. This could help WIT expand its product and services portfolio.
WIT’s total revenue increased 22.4% year-over-year to $2.46 billion in the quarter ended June 30, 2021. Its gross profit came in at $740 million, up 21% year-over-year. Its profit for the period came in at $436 million, representing a 34.3% year-over-year rise. Its EPS increased 40.8% year-over-year to $0.08.
Analysts expect WIT’s revenue and EPS to increase 21.8% and 11.5% year-over-year to $10.17 billion and $0.29, respectively, in fiscal 2022. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 89.1% to close yesterday’s trading session at $8.83.
WIT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
WIT has an A grade for Stability, and a B grade for Momentum and Quality. Within the Outsourcing – Tech Services industry, it is ranked #6 out of 11 stocks. Click here to see the additional POWR Ratings for Growth, Value, and Sentiment for WIT.
Nokia Corporation (NOK)
Headquartered in Espoo, Finland, NOK offers mobile and fixed network solutions worldwide. The company operates through four segments: Mobile Networks, Network Infrastructure, Cloud and Network Services, and Nokia Technologies.
On September 21, NOK launched…
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