Tech stocks have delivered a banner performance this year. Multiple factors, including excitement about artificial intelligence (AI), a rebound from last year's sell-off, and resilience in the economy steering away from a recession, all drove the Nasdaq Composite higher.
While tech stocks have pulled back more recently, there are still some great buys available on the market right now. Look no further than these three.
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1. Roku
The streaming industry could finally be poised for a rebound, with the writers' strike coming to an end and signs that advertising demand is coming back. That's great news for Roku (ROKU -10.29%), the leading streaming distributor.
Roku stock is still down sharply from its peak in 2021, off more than 80%, as the digital advertising market slowed and the company mistimed a ramp-up in spending.
However, despite its challenges on the bottom line, Roku continues to deliver solid growth in usage numbers, showing that its platform is still gaining traction. In its most recent quarter, the number of active accounts rose by 16% to 73.5 million, and streaming hours jumped 21% to 25.1 billion
Meanwhile, the company should benefit from tailwinds in advertising as streamers such as Disney and Netflix are stepping up efforts to build out membership for their advertising tiers.
Roku typically gets 30% of ad inventory from its streaming partners, so it should benefit as more of the streaming audience moves to ad-based options.
Finally, there's still a lot of growth left in streaming as audiences move from linear TV, which will favor Roku's long-term growth as well.
2. Remitly Global
Fintech stocks have mostly struggled this year, as the boom in digital payments during the pandemic came to a halt. However, one fintech stock bucking that trend and actually posted accelerating revenue growth is Remitly Global (RELY 1.63%).
Remitly specializes in money transfers, or remittances, for migrant workers, so the company competes more directly with Western Union and Moneygram than it does with a payment app such as PayPal.
In its second quarter, the company reported a 47% increase in the number of active customers to 5 million, send volume rose 38% to $9.6 billion, and revenue, which is driven by send volume, jumped 49% to $234 million.
The company also flipped an adjusted earnings loss before interest, taxes, depreciation, and amortization (EBITDA) in the quarter a year ago to a profit of $20.4 million.
Remitly still has a large addressable market to grow into and should see profit margins expand as it gets bigger, since digital payments companies tend to be profitable at scale.
3. Meta Platforms
Meta Platforms (META 0.43%), the Facebook parent, has soared this year as the company successfully controlled its costs and returned to top-line growth.
However, there is still plenty of room left for growth, and Wall Street expects profits to surge in the second half of the year. In fact, on a forward P/E basis, the stock is trading at a discount to the S&P 500.
Meta has a number of catalysts working in its favor. Monetization of Reels, its short-video product, is ramping up, and the broader digital advertising market is also starting to rebound.
Meanwhile, the company is about to launch the Quest 3 headset at its Connect conference this week, along with some other new product releases around AI, virtual reality, and augmented reality. This means it still has a lot of growth potential beyond its core advertising business.
While its metaverse division has been a disappointment thus far, the company is still highly profitable as it absorbs losses from Reality Labs. If it can start to narrow its losses, there's significant room for profit growth, which could send the stock up another level, topping a trillion-dollar market cap
