Investors have, in general, shunned technology stocks over the past year amid high inflation, rising interest rates, and increasing fears of a recession. But that doesn't mean there aren't some great companies out there, poised for an eventual comeback.
Two tech companies that are still growing right now -- but that investors may not have on their radar -- are The Trade Desk (TTD 0.92%) and CrowdStrike (CRWD -0.90%). Here's why investors should consider snatching up some shares of the companies this year.
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1. The Trade Desk
While some investors may already know about The Trade Desk, I think it deserves a spot on this list because the company is far from a household name. For the uninitiated, The Trade Desk is a platform for selling digital ads across the web, mobile devices, and connected TVs.
The Trade Desk is still growing during a time when other companies in the ad business are suffering. For example, the company's fourth-quarter sales increased 24% in the quarter to $491 million, and full-year sales popped 32% to $1.57 billion. Just as impressive is the fact that The Trade Desk's customer retention rate was 95% for the quarter -- making nine consecutive years of that achievement.
The company is also planning ahead for big changes within the ad industry. Businesses are moving away from an old system of online trackers, called cookies, and The Trade Desk is leading the charge. The company helped develop an online identifier called Unified ID 2.0 (UID2) that gives companies the ability to sell targeted ads while also protecting the privacy of online users.
The Washington Post, fuboTV, Amazon Web Services, and other major media companies and advertisers have already adopted UID2, which could help The Trade Desk set itself apart as an innovative leader in the ad industry. That lead matters because the global digital ad market is poised to grow from $567 billion last year to $696 billion in 2024.
2. CrowdStrike
Another solid tech stock that investors may have never heard of before is the cybersecurity company CrowdStrike. Its cloud-based services allow companies to protect computer systems and mobile devices, and even integrate artificial intelligence to search for new online threats.
While many tech stocks are struggling to grow their business right now, CrowdStrike continues to thrive. The company's sales soared 48% to $637.4 million in the fourth quarter, fueled by rising subscription revenue that popped 48% to $405.4 million.
Increasing sales are certainly good to see, and equally important is the fact that the company has a strong cash position. CrowdStrike ended the quarter with $2.7 billion in cash and just $741 million in long-term debt. An increasingly tight financial climate has left many tech companies trying to figure out how they'll raise money, but CrowdStrike, in contrast, has put itself in a very strong financial position.
While it's not a fun prospect to think about, cybersecurity is becoming an even bigger problem every year, which means the amount of money companies are spending to deal with it is estimated to continue increasing. This year, the cybersecurity market will be worth $173 billion, and by 2027 it will grow into an estimated $262 billion market, giving CrowdStrike a massive opportunity to grow into.
Be patient with tech stocks right now
There's a lot of market volatility right now thanks to rising interest rates, high inflation, and the potential threat of a recession. This uncertainty will likely cause some more share price swings in the tech sector as well, but investors should remember to play the long game with these stocks.
Both CrowdStrike and The Trade Desk are growing during a difficult time, and each company's position in its respective market should help them remain very competitive in the years ahead.
