A low stock price isn't always bad -- it's like a clearance sale at your favorite store.
Just because a stock is cheap doesn't mean it's a dud. Sometimes, the company had a rough quarter, or maybe there's a market panic unrelated to its performance. In some cases, the long-term opportunities in front of a small company aren't recognized by Wall Street. For savvy investors, a low stock price can be a chance to buy a solid company at a discount.
So, while others run away, you could score a great deal. Remember, it's about buying low and selling high, not following the crowd. On that note, here are two top tech stocks with really low share prices.
Both stocks are, in fact, strong plays on the ongoing artificial intelligence (AI) boom. Grabbing a few of these cheap shares today should serve you well in the long haul -- and the stubs are really affordable.
NASDAQ: SOUN
Key Data Points
SoundHound AI: $3.93 per share
AI-powered voice control expert SoundHound AI (SOUN +1.50%) has had its ups and downs recently, but the company's long-term potential remains promising. Specializing in voice AI and conversational intelligence technologies, this little company is positioned to thrive as demand grows for these services.
There's a lot to be optimistic about here. The company has a significant backlog of long-term contracts worth $682 million, which provides a clear path to future revenue. If you overlook this crucial metric, SoundHound AI looks quite expensive in light of just $50.8 million in trailing sales. That would be a mistake in the long run.
Additionally, strategic moves such as paying off its long-term debt and acquiring key assets from the online ordering platform Allset demonstrate SoundHound AI's commitment to growth and innovation. And don't forget that the backlog is growing by leaps and bounds. The first-quarter figure stood 80% above the year-ago period's reading. In other words, SoundHound AI has set up a robust and growing portfolio of long-term contracts that will convert into real revenue streams over the next few years.
With a solid cash reserve of $180 million and no debt, SoundHound AI is well prepared to seize new opportunities. The company is not yet profitable and its valuation ratios may seem high, but that enormous (and soaring) order backlog and a string of strategic initiatives suggest a bright future. At just $3.93 per share, SoundHound AI offers a compelling investment opportunity if you're willing to take a chance on this innovative AI player.
NYSE: PATH
Key Data Points
UiPath: $12.96 per share
Robotic process automation (RPA) specialist UiPath (PATH +1.86%) has had a tough year, with its stock down 48% in 2024. Despite this negative Wall Street sentiment, the company remains a key player in RPA, integrating AI technologies into its service offerings.
RPA is software technology that automates repetitive and routine tasks usually performed by humans, improving efficiency and accuracy. Despite the name, it rarely involves actual robots. While not strictly an AI company, UiPath uses AI to boost its software capabilities, such as mining data and understanding legal documents.
The recent plunge in UiPath's stock price largely stemmed from a mixed first-quarter earnings report. While earnings and revenue came in above the consensus analyst targets, the company's annualized renewal run rate (ARR) hit the low end of its guidance at $1.51 billion. Moreover, UiPath slashed its full-year ARR forecast from $1.73 billion to $1.66 billion. That's a bad reading on the automation expert's contracts-based recurring revenue flows.
The unexpected resignation of CEO Rob Enslin, who was replaced by co-founder Daniel Dines, further unsettled investors, leading to a 34% single-day drop in the stock price. C-suite shake-ups are rarely good news, though I don't mind a company founder getting his hands back on the steering wheel.
However, the sell-off looks overdone. UiPath's long-term prospects remain strong, with the global RPA market expected to grow from $3 billion in 2023 to $31 billion by 2030. UiPath is well positioned to capture a significant share of this expanding market, starting from just $1.35 billion in trailing revenue. As you can tell from UiPath's 45% share of the RPA market's current revenue opportunity, I'm talking about an established leader in this booming industry.
UiPath's fundamentals are sound. The company boasts a robust cash reserve of $1.9 billion with no debt, allowing management to make strategic investments or acquisitions to accelerate top-line growth. Additionally, its free cash flow jumped 39% year over year to $101.3 million in Q1 2024. UiPath is making cash profits by the digital truckload.
Given the current low valuation and the significant market opportunity, UiPath presents a compelling investment opportunity. For investors willing to absorb some volatility at first, the potential for long-term gains makes UiPath a tech stock worth considering today.
