3 Top Tech Stocks Under $20 Per Share

Investing in top stocks in the tech sector can be intimidating. Prices per share often range from hundreds to thousands of dollars. Most brokerages facilitate investing in these stocks through fractional shares, but some investors may prefer to buy as many as 100 shares, which are easier to track and use for covered calls.

Investors must remember that a stock’s trading price never defines how low or high it actually is. For example, a stock with a single-digit price and a triple-digit price-to-earnings ratio is typically more expensive than a stock with a triple-digit price and a single-digit price-to-earnings ratio. ratio.

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That being said, stocks trading at less than $20 per share may still be considered easier to manage than stocks with higher prices. So today, we’ll take a closer look at three promising tech stocks that are trading below that threshold.All solid state battery manufacturer quantum scape (QS 0.40%)a contract chip manufacturer in Taiwan united microelectronics (UMC 0.74%)and the Bitcoin miner marathon digital (Mara 10.70%).

1. Quantumscape

QuantumScape makes solid-state batteries that are powered by solid electrolytes instead of the liquid electrolytes used in lithium-ion batteries. Solid-state batteries generally have lower volatility, are more resistant to high temperatures, are less susceptible to leakage or fire, and can be charged more quickly than lithium-ion batteries.

QuantumScape develops solid-state batteries for the electric vehicle (EV) market that can be fully charged in less than 15 minutes and have a range of 400 to 500 miles. These batteries could replace traditional lithium-ion batteries in EVs, which require about 30 minutes to charge for a range of about 300 miles.

Although QuantumScape hasn’t commercialized its batteries yet and hasn’t generated significant revenue, its biggest backers are: Volkswagen. The company is shipping its first samples in stages this year, and analysts expect revenue to reach just $2 million in 2024 and $15 million in 2025.

That doesn’t seem like a lot of revenue for a company valued at $2.5 billion, but QuantumScape’s revenue could soar over the next decade as automakers switch to solid-state batteries. If you believe QuantumScape will remain a major player in this nascent market, its $7 per share stock price could be a very good buy.

2. United Microelectronics

United Microelectronics, known as UMC, is Taiwan’s second largest contract chip manufacturer. taiwan semiconductor manufacturing. Although it is often overshadowed by TSMC because it makes larger, older, and cheaper chips, it remains a vital cog in the global semiconductor supply chain.

In 2018, UMC stopped chasing TSMC in an expensive “process race” to make smaller, denser and more power-efficient chips. UMC then produced chips for low-end mobile devices, connected cars, industrial machinery, and IoT. gadget. From 2018 to 2023, it grew its revenue at a steady compound annual growth rate (CAGR) of 8%. Operating margin expanded from 4% to 26% and earnings per share (EPS) grew at a CAGR of 53%.

This explosive profit growth suggests that UMC made the right move by pivoting to older, cheaper chips. For 2024, analysts expect sales to increase by 8%, as higher expenses and lower utilization rates will cause EPS to decline by 19%. This cyclical slowdown is not surprising, but the company’s stock still looks cheap at 12x next year’s P/E and pays a hefty forward yield of 7.3%. The $8 per share price may be more attractive to retail investors than TSMC, which still trades at about $125.

3. Marathon Digital

Marathon Digital is the world’s largest pure Bitcoin miner. As of the end of January, it powered a fleet of approximately 212,900 Bitcoin miners, producing an average of 35 Bitcoins each day throughout the month. Marathon has consistently added Bitcoin to its balance sheet while selling some of its holdings to raise additional cash.

This increased cash flow has enabled the company to open two new factories, launch a mining joint venture in Abu Dhabi and purchase several other mine sites over the past year. However, it still held $989 million in cash, cash equivalents, and Bitcoin at the end of January, putting it in a strong position to further strengthen the mining market.

However, Marathon’s growth remains closely tied to Bitcoin’s volatile price, which has nearly doubled in the past 12 months after enduring some volatility. Analysts expect the company’s revenue to grow at a CAGR of 55% from 2023 to 2025 due to a rebound in Bitcoin prices and expansion of mining operations. So if you believe Bitcoin prices will continue to rise, Marathon stock could be a bargain at just five times next year’s sales. And as of this writing, it is trading at around $18, just below the $20 threshold.