The tech sector often leads investors to stocks that could experience outsize price increases over time. Stocks like Amazon and Netflix are excellent examples of such growth.

Indeed, that reversed beginning in late 2021, as rising interest rates took their toll. Nonetheless, many of the stocks were oversold, paving the way for a likely recovery in names such as MercadoLibre (MELI 0.04%), Shopify (SHOP 5.49%), and Zoom Video Communications (ZM 2.16%).

1. MercadoLibre

MercadoLibre seems unstoppable. The Latin American conglomerate leads its region in the e-commerce and digital payments spaces. Moreover, it has accomplished this by tackling many of the same issues that limited the growth of other companies.

The company facilitated e-commerce in its cash-based markets by launching Mercado Pago, which created products that brought unbanked customers into the fintech world. Mercado Credito also expanded on fintech by offering customer and business loans.

The company also overcame logistics and slow delivery issues by creating Mercado Envios. That segment stores, packs, and ships goods to a client's customers and can sometimes offer same-day or next-day delivery, previously uncommon in Latin America.

Combined, those segments generated $9.4 billion in revenue in 2022, 54% higher than year-ago levels. Although gross merchandise volume surged 21% during that time, the total payment volume growth of 60% drove most of the increase.

Keeping costs and expenses in check also helped MercadoLibre report net income of $482 million in 2022, well above the $83 million earned in 2021.

Furthermore, the stock has logged positive growth over the last 12 months after bouncing back from a huge drop early last year. Despite that surge, a price-to-sales (P/S) ratio of 6 makes it inexpensive by historical standards, likely making it a top stock to buy now.

2. Shopify

Shopify (SHOP 5.49%) became one of the more notable victims of the 2022 bear market. At one point, it had lost more than 85% of its value as investors turned on tech stocks.

Indeed, front-loaded increases in 2020 and 2021 led to slowdowns and declines in 2022. But market researcher Reports and Insights forecasts a compound annual growth rate of 12% for the e-commerce industry through 2030. That indicates industry growth rates should more closely resemble pre-pandemic patterns as the world moves on from the lockdowns.

In fact, Shopify stock has now doubled from its lows as investors sense more opportunity in the company. It won customers with its flexibility, ease of use, and rapid platform.

Moreover, with a rapidly expanding merchant-solutions segment that helps with payments, inventory management, and order fulfillment, it increasingly stands out among software-oriented competitors.

In 2022, revenue of $5.6 billion grew 21% year over year. Still, Shopify suffered rapid increases in costs and expenses as it invested in its business. That and $2.8 billion in unrealized losses led to a 2022 loss of almost $3.5 billion. That was a dramatic turnabout from the $2.9 billion profit in 2021, though investments in itself claim massive amounts of capital, especially when pertaining to the fulfillment network.

Lastly, its P/S ratio now stands at 11. It has fallen from more than 60 two years ago and is low by historical standards. Given that discounted valuation and its growing ecosystem, investors may want to take another look at this software-as-a-service (SaaS) stock.

3. Zoom Video Communications

Admittedly, Zoom might seem like a strange choice. The pandemic darling fell out of favor as users returned more to in-person meetings. And even in instances where online meetings have continued, Microsoft's Teams platform has experienced rapid growth. Such competition appears daunting when Zoom's $20 billion market cap is less than 1% the size of Microsoft's market cap, which now exceeds $2.1 trillion.

However, products such as Zoom IQ for Sales and Zoom Virtual Agent deepened the company's communications ecosystem. Moreover, it facilitates functions such as meeting recordings, taking advantage of OpenAI GPT3 technology to help users find a specific part of a recording quickly.

So powerful is this technology that Cathie Wood of Ark Invest predicted a $1,500 share price for Zoom by 2026. Many analysts doubt Wood's forecast and her bear-case scenario of $700 per share. Nonetheless, since her predictions of exponential growth for Tesla and Bitcoin came to pass, investors have reason to take such a conclusion seriously.

Admittedly, investing in Zoom will require patience. Revenue for fiscal 2023 (ended Jan. 31) came in at $4.4 billion, growing only 7%. And earnings fell more than 90% to $104 million amid increases in income tax and operating expenses. Such numbers do not point to massive growth by themselves.

Still, its stock price has stabilized, and its P/S of 5 is close to record lows and well under the peak sales multiple of 124 in October 2020. This low valuation increases the likelihood that Zoom stock will zoom again if its massive growth returns.