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3 tech stocks to make you the millionaire next door


Federal Reserve officials persist in raising interest rates in the coming months amid inflationary pressures in the United States. This is a crippling headwind for most tech stocks, as their valuations are tied to future growth and therefore become less attractive investments than bonds when rates rise.

The possibility of interest rate hikes pushing the economy into a recession is also making investors more cautious about tech companies that have relied for decades on debt to fund their growth.

As a result, tech executives across the country are trying to balance profitability and growth. Right now, the best tech stocks are those with strong financials and fast-growing markets, which propels the company to grow faster than the economy and ensures the company can fund its growth.

Although macro headwinds persist, here are three winning tech stocks that meet those criteria to make you the millionaire next door.

Rivian (RIVN)

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Rivian (NASDAQ:SHORE) is an electric vehicle company based in the United States, producing SUVs, trucks and vans. It debuted at $78 per share but has since fallen to $14.

A few factors worry investors. First, the business is not profitable, lost $1.35 billion in the last quarter. Second, the supply chain has become a huge issue for many electric vehicle companies. Last year, Rivian had to halve your production target to 25,000 vehicles, due to supply chain issues. However, there are good reasons to believe that Rivian is about to turn around.

Rivian has $12 billion in cash and equivalents. Even at its current burn rate, the company still has about eight quarters before it needs to raise capital. Additionally, Rivian says he expects to see gross profit by 2024, which allows him to avoid LCNRV costs and improve margins. The company is already showing signs of improvement, with the net loss of $1.35 billion last quarter down from $1.59 billion in the same quarter last year.

On the production side, Rivian maintained its 2023 production target of 50,000 vehicles, which is impressive considering a similar electric vehicle business, Lucid (NASDAQ:LCID), lowered its production target due to a difficult supply chain. In fact, there was rumors that Rivian expects to produce 62,000 vehicles in-house this fiscal year. In addition, the delivery time on the site is now 2 weeks, compared to 4 to 16 weeks previously. This suggests that the company has found more efficient delivery methods.

Rivian is currently priced attractively due to these investor concerns and is trading at 3x P/S forward, below Tesla’s 5.3x and Lucid’s 14.83x. Investors can undervalue the stock and miss the huge upside of the company.

Alphabet (GOOG)

GOOG action: letters spelling google

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Google (NASDAQ:GOOGNASDAQ:GOOGL) is a multinational power in its sector. The stock is up 39% year-to-date with a large base of internet users relying on its offerings.

Google is strategically positioned in a growing market as consumers demand data-driven services and businesses are rapidly digitizing. It reported strong quarterly earnings of Revenue growth of 20% YoY, P/E ratio of 27.27, operating margin of 24.92%and a healthy balance sheet combined with low indebtedness and a strong cash reserve.

A notable catalyst for Google’s growth is its likely expansion into the burgeoning metaverse. Google’s vast experience in virtual and augmented reality, digital advertising, and cloud services puts it in an advantageous position to make a significant impact in this space. We’ve seen the company embrace augmented reality technology since its development of Project Iris. The Metaverse is a trillion dollar opportunity that Google has the resources to grow and dominate.

Moreover, Wall Street is bullish. Yahoo finance reports 9 analysts with an average price target of $129.44 with a range of $120 to $145. Notable companies are maintaining their buy rating on GOOG stocks, with no downgrade in sight for this company.

AT&T (T)

AT&T logo on wooden background

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AT&T (NYSE:J) is a giant in the telecommunications and media industry. Even though the stock is down 17% in 2023, there are long-term growth prospects for AT&T. The telecommunications industry is undergoing an unprecedented transformation with 5G driving faster, more reliable, low-latency communications. Growing consumer demand for high-speed Internet and streaming content is also driving the growth of these industries. AT&T is uniquely positioned to capitalize on these trends given its vast network and content assets.

AT&T’s strong financial metrics are a particularly attractive choice for income investors, as the company comes with strong free cash flow, a P/E of 7xand a competitive dividend yield of more than 7%. In addition, revenue growth remains stable, supported by the strong performance of its wireless, broadband and media segments.

A key enabler is AT&T’s strategic evolution in the Internet of Things and edge computing space, which is expected to grow at a rapid pace. 26.1% CAGR through 2030. AT&T’s strong network capabilities, combined with its investment in IOT technologies, have positioned it to deliver robust, industry-specific IOT solutions.

Lately, Wall Street maintains a bullish view for T stock valuation. Yahoo Finance reports that 21 analysts have an average price target of $20.83 with a range of $9 to $28. Notable companies maintained their buy rating on the T-share, with no downgrade in sight for this company.

As of the date of publication, Michael Que had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to select the best long-term sustainable investments.

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