After a tough 2022, tech stocks have made a surprising recovery this year, paced by big tech companies and the perception that many of these stocks were oversold.
Although most economists are still calling for a recession, the worst may have already passed for the sector, which was hit early by cutbacks in enterprise spending. Additionally, layoffs across much of the sector have also helped tech companies slim down and show greater profitability.
If you're looking for some low-priced tech stocks to buy right now, these three fit the bill even if you only have $50 to spend.
Image source: Getty Images.
1. Uber
After a long journey through the doldrums, Uber Technologies (UBER 1.15%) has made a surprising comeback. The company pulled out of markets where it didn't have one of the top two spots in market share, and its delivery business helped carry it through the pandemic, giving it an advantage over rival Lyft.
With the global economy reopening as the pandemic has faded, the mobility business bouncing back, and its cost base slimming down thanks to earlier cost-cutting efforts, the company is finally turning profitable.
Gross bookings in the first quarter grew 19% to $31.4 billion, driving a 29% increase in revenue to $8.8 billion. More importantly, the company reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $761 million and free cash flow of $549 million.
On a generally accepted accounting principles (GAAP) basis, the company still reported an operating loss of $262 million in the quarter due to discrepancies with share-based compensation and other non-cash expenses, but management forecast an expansion in profitability in the second quarter, meaning GAAP profitability shouldn't be far away.
Uber has a huge addressable market in front of it, and if the company can deliver steady growth and improve profitability, the stock should continue moving higher, up from less than $40 a share today.
2. GitLab
GitLab (GTLB 1.99%) specializes in DevSecOps software, providing a single platform for companies to manage, deploy, and upgrade their software.
Like other software stocks, GitLab has struggled over the last year following its 2021 IPO, and the stock is down 71% since its debut.
In response to the slowdown in the tech sector, GitLab laid off 7% of its staff in February, or 130 employees, which will help the company adapt to a tough macroeconomic environment, but the move should also give it a push toward profitability.
GitLab also continues to deliver strong growth. In its most recent quarter, revenue jumped 58% to $122.9 million. The company is still unprofitable, with a GAAP operating margin of -38% and a non-GAAP operating margin of 11%.
However, GitLab's unit economics are improving as its adjusted operating loss narrowed from $27.4 million to $13.8 million in the most recent quarter. Its adjusted gross margin of 90% shows that the business should be profitable once it scales.
GitLab's product achieves over 400% return on investment, according to one measure by Forrester Research, and the company faces relatively little direct competition as it's mostly competing with and taking market share from point solutions.
3. Remitly Global
Sending money back home has long been a challenge for immigrants around the world as they need to make sure the methods they use are safe and reliable and won't come with exorbitant fees.
That's where Remitly Global (RELY -12.20%) comes in. Remitly is disrupting the international remittance market with a digital solution tailored to immigrants who need to send money to family members and others in their home countries.
Remitly has been grabbing market share from traditional money transfer leaders like Western Union and Moneygram, and it's growing quickly. In the first quarter, active customers rose 50%, driving a 40% increase in send volume to $8.5 billion and a 50% increase in revenue to $203.9 million.
The company's profitability also improved, with an adjusted EBITDA profit of $5.4 million, up from a loss of $12.1 million in the same quarter a year ago.
The metrics above show the company attracting new customers and gaining market share, and its customer base requires its service regardless of the state of the global economy.
After a slow start as a publicly traded company, Remitly stock has started to gain momentum, with the stock up 50% over the past year, and it looks to have a bright future as profitability scales with revenue growth.
