The stock market is bouncing back in 2023 after a terrible run in 2022. The tech sector is leading the charge, much the same way as it fell harder than the general market last year. The broad S&P 500 index is up 15% year to date, while the tech-heavy Nasdaq Composite has gained 31% over the same period.

^SPX Chart

^SPX data by YCharts.

Even so, it's not hard to find undervalued tech stocks in this market. Read on to see why I'm particularly enthusiastic about buying freelance marketplace operator Fiverr International (FVRR 0.41%), semiconductor giant Qualcomm (QCOM -1.16%), and media-streaming technology expert Roku (ROKU 2.48%) right now. Two of these top-notch tech stocks have fallen far behind the recent market surge; the third has doubled in 2023 but still looks undervalued.

All three strike me as great buys today.

Fiverr

When the coronavirus lockdowns ended and life-saving vaccines became widely available, market makers threw Fiverr's stock out with the bathwater. Freelance gigs seemed like a direct play on the COVID-19 outbreak and potentially worthless in any other era. The stock peaked in early 2021 and trades more than 90% below its all-time highs today.

But this chart tells a different story:

FVRR Chart

FVRR data by YCharts. TTM = trailing 12 months.

As it turns out, freelancers continued to find jobs through Fiverr's platform long after the coronavirus peak. Sure, the company's top-line growth has slowed in recent quarters, but you'll hear the same story in every corner of this economy. The inflation panic had that effect across many sectors.

Now that inflation-fighting is nearing an end, Fiverr delivered 5% year-over-year sales growth in the second quarter and raised its guidance for the second half of the year. The company has also launched several new products and services in this market lull, setting the stage for what CEO Micha Kaufman calls "our next leg of growth."

The hard lessons of fiscal discipline Fiverr learned in recent quarters have given the company a leaner, meaner operating profile. I can't wait to see what this stock can do in a healthy global economy. Meanwhile, Fiverr's stock is down by 3% this year and trades at just 3 times trailing sales and 13.5 times forward earnings. That's a downright bargain for this underrated growth stock.

Qualcomm

Let me start with the numbers for Qualcomm.

The semiconductor titan's stock has gained just 3% in 2023 and dropped 21% lower over the last 52 weeks. It trades at the bargain-bin valuation of 14.5 times trailing earnings and 3.2 times sales. As a direct result of the low stock price, Qualcomm's dividend yield stands at a generous 2.9%.

The company has indeed seen some hard times lately. Revenues have dropped in recent quarters due to weak consumer demand for smartphones. It makes sense if that downturn makes Qualcomm investors nervous. However, the sharply unfavorable market reaction looks overdone.

The soft demand won't last forever, and treating a short-term speed bump like a permanent business flaw is a mistake. Moreover, Qualcomm has an active hand in many up-and-coming growth markets that should make up for the smartphone issues.

  • Qualcomm's Snapdragon chips will power the upcoming Meta Quest 3 headsets from Meta Platforms. That's an express ticket to the Metaverse and virtual reality applications.
  • Automotive computing keeps skyrocketing. Electric cars and self-driving vehicles are going mainstream -- and any modern vehicle comes packed with computer chips nowadays. As a leading provider of these chips, Qualcomm's automotive sales have shown double-digit year-over-year percentage growth in each of its last 13 quarterly reports.
  • The company's high-performance mobile chips include robust acceleration features for artificial intelligence (AI). Handset makers will want to provide AI features in their upcoming flagship models, and Qualcomm makes it easy.

So Qualcomm lets me tap into all of these high-octane growth opportunities at a very affordable stock price? Where do I sign up?

Roku

Last but not least, Roku has started a strong bounce off of last year's market bottom with a 98% gain in 2023 -- and it still looks ridiculously underpriced. For my money, Roku is one of the best buys in the summer of 2023.

Like Fiverr and Qualcomm, Roku's price-to-sales ratio sits just above 3 times trailing revenues. This stock doesn't come with attractive profit-based valuation ratios due to negative earnings and cash flows in recent reports. That's partly due to the same inflation crisis that weighed down my other two picks, but the company also controls its own destiny in many ways.

Many businesses have tried to avoid financial pain from the economic crises by passing the buck to their customers. Higher production costs and lower unit sales can be patched up with higher prices. Roku isn't playing that game, though. The company decided early on that it would leave its product and service prices untouched and take the brunt of low demand for media-streaming hardware and digital advertising space.

Roku could afford it. Its balance sheet held just $133 million of long-term debt and $2.1 billion of cash equivalents two years ago when Roku's stock price started to fall. By the second quarter of 2023, Roku had paid off the last scraps of debt papers and still held $1.8 billion in cash reserves.

As a result of this sensible growth strategy, the number of active Roku users had grown from 55.1 million to 73.5 million in two years. Not too shabby, right? Building a huge business platform in the early going will surely pay dividends as the media-streaming industry matures.

I expect Roku's business to catch fire when ad sales return to normal and people start buying smart TV sets again. The stock shouldn't be far behind. Even after nearly doubling this year, Roku's shares still trade 84% below the highs of 2021.

Past results are no guarantee of future gains, of course. There is nothing magical about Roku's all-time highs; the stock was probably overvalued back then. Still, I see many years of strong growth ahead for this company, and Roku has barely scratched the surface of international growth opportunities so far.

I believe we're looking at the early days of a future media empire here. Roku is starting from a technology background and adding media features such as advertising platforms and in-house content production later. Most media giants do it the other way around. Either way, this $11 billion stock has lots of room to grow from here.