The technology sector has had a tough time this year. Some of the market's favorite names in 2021 have imploded and come within shouting distance of penny stock status. While some of these tech stocks were riding the tide and will never see new highs, others have been unfairly thrown out with the rest and could eventually comeback for a rebound.

Several stocks trading below $20 per share have long-term potential to grow a relatively small investment into a sizable position. These five companies are less proven than your run-of-the-mill blue chip stocks, but could eventually become huge winners. Bold investors can consider these tech stocks as speculative holdings in a diversified portfolio.

1. Upstart Holdings

Fintech company Upstart Holdings (UPST -0.33%) uses artificial intelligence to determine creditworthiness instead of a traditional credit score. Upstart claims that its algorithms can produce 53% fewer defaults at the same approval rate compared to a credit score. Lenders are steadily buying in; Upstart's partner network of banks and credit unions has grown to 83 as of 2022 Q3, from 31 the prior year.

UPST Revenue (TTM) Chart

UPST Revenue (TTM) data by YCharts

However, rapidly rising interest rates have severely disrupted Upstart's performance. The company's revenue and loan volume have declined this year as higher rates discourage consumers from taking loans and make lenders more cautious about extending funding. The stock has fallen 95% from its high; however, the company could rebound when credit markets relax, especially if lenders continue partnering with Upstart.

2. Affirm Holdings

Consumer credit is a massive industry, and Upstart's not the only company seeking to disrupt it. Affirm Holdings (AFRM -2.33%) is another fintech company using technology to improve how consumers borrow money. Affirm's specialty is buy now, pay later. It uses algorithms to rapidly approve consumers on a transaction-by-transaction basis, allowing them to split up a purchase into installments, sometimes interest-free. The company generates revenue by charging merchants fees for sales made on its platform and from interest-bearing loans.

AFRM Revenue (TTM) Chart

AFRM Revenue (TTM) data by YCharts

Affirm's business is also interest rate sensitive, and recession worries have spooked investors. Affirm is partnered with several major retailers, and consumers tightening their wallets would likely impact Affirm. However, the company still has $1.4 billion in cash, so while investors should monitor the upcoming quarters to see how consumers pay back their Affirm loans, the company seems funded well enough to endure the challenges of a weaker economy.

3. SentinelOne

Cybersecurity is one of the most innovative industries because hackers are constantly trying new things to breach companies. SentinelOne (S 0.59%) is a security company that uses artificial intelligence to plot devices' data into stories and identifies and removes suspicious threats. It has received accolades, including being named a leader for endpoint protection by technology consulting firm Gartner.

S Revenue (TTM) Chart

S Revenue (TTM) data by YCharts

SentinelOne is aggressively spending on sales and marketing to grow its business, so it isn't profitable yet. However, you can see above that it's sitting on a $1.2 billion cash hoard and lost just $67 million in cash last quarter. Investors should watch for revenue to grow faster than expenses, but SentinelOne's rapid growth could make the stock a big winner after shares have fallen 68% year to date. Once trading at a scorching price-to-sales (P/S) ratio of more than 100, that multiple has fallen to just 12.

4. Palantir Technologies

Some analysts say data is the new oil, and Palantir Technologies (PLTR 0.30%) develops software solutions that help organizations utilize their data as effectively as possible. Palantir works with several layers of government and private companies to quickly organize large amounts of data and identify trends and other observations that help aid decision-making in real time. This includes work in the most secretive government areas, like the military and intelligence.

PLTR Revenue (TTM) Chart

PLTR Revenue (TTM) data by YCharts

Revenue growth has slowed in recent quarters, helping explain the stock's 61% decline this year. But customer acquisition is still strong, including a 66% year-over-year increase in customer accounts in the third quarter. Palantir's government business is also doing well; it recently renewed its partnership with the Centers for Disease Control with a five-year contract worth $443 million. Palantir's growth could be lumpy because of its contract-based sales cycle, so investors should look for an increasing customer base to indicate that revenue growth will come.

5. Amplitude

Sales used to be a guessing game; companies would try things and judge how well they worked by looking at sales. But Amplitude (AMPL -0.10%) uses data to give companies the insights they need to become more proactive. Amplitude's software can tell a company several things about how users interact with digital products, which can help the company identify potential new products, how to market, and more. Amplitude has a little over 1,900 customers as of the third quarter of 2022.

AMPL Revenue (TTM) Chart

AMPL Revenue (TTM) data by YCharts

Amplitude is yet another young company burning cash, but you can see above that losses are minimal, and the company has plenty of cash. Some new products launched this year could lead to cross-selling opportunities while Amplitude continues acquiring new customers for its core analytics product. The stock has fallen 85% from its high, and its P/S ratio of 6 seems reasonable considering the company's 30% revenue growth and nearly break-even financials.