5 Cheap Technology Stocks Trading Under $20 To Buy In 2020
Zacks Investment Research | Dec 16, 2019 08:59PM ET
Technology has been one of the best performing sectors so far in 2019. This is evident from the fact that the Technology Select Sector SPDR ETF (NYSE:XLK) has returned 45.7% on a year-to-date basis.
Although the sector faced several issues, including the U.S.-China trade war and related tariffs, concerns over Brexit, Huawei ban, lower semiconductor capital spending, sluggish server market, the robust performance reflect strong fundamentals.
Rapid adoption of cloud computing, AI and ML tools, IoT, ADAS, smart speakers, virtual assistants, wearables, drones, VR/AR devices and blockchain have helped tech stocks outperform all benchmarks this year so far.
Tech Prospects Bright in 2020
Technology has become ubiquitous in several other sectors including retail, banking & finance, healthcare and oil & gas.
From digitizing retail outlets with automated check-out technology, modernizing payment systems with robust cybersecurity measures, revolutionizing health care mechanisms and education with credible data-driven insights, the growing clout of modern technology benefits almost all sectors.
Moreover, the accelerated deployment of 5G technology is likely to create further growth opportunities in the telecom space for tech stocks in 2020.
While the United States is expected to maintain the momentum in LTE network growth over the near term, the major impetus is likely to come from the emerging markets. Governments in these countries are spending on smart cities and IoT projects and instituting preferential policies along with structural subsidies to boost next-generation high-speed broadband.
Further, improving macro-economic environment is expected to boost prospects next year. The partial trade deal between the United States and China is expected to benefit Apple (NASDAQ:AAPL) and semiconductor stocks like Intel (NASDAQ:INTC) .
Strategy to Pick Potential Winners
Value stocks are seen as cheap relative to the market though stocks trading under $20 can be seen as more volatile than their pricier peers. Nonetheless, investors can expect big returns with the right stocks that are currently undervalued.
Moreover, undervalued or cheap stocks provide low barrier to entry and a high risk-to-reward opportunity amid prevailing volatility in global markets.
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