Tech stocks often have the most impressive growth rates in the market during bull markets.
However, it can also fall quickly at the first signs of economic instability. While this environment can cause investors to look for an exit, it can also provide an opportunity to buy oversold tech stocks at deep discounts. The Relative Strength Index (RSI) is a great tool for identifying oversold companies and helps investors pick up good market candidates that often fall victim to disproportionate declines or opportunistic reactions. You will be able to do it.
So let's take a look at three oversold tech stocks that offer a great chance for a rebound.
Dynatrace Co., Ltd. (DT)
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artificial intelligence (A.I.) Automation is becoming the industry standard; Dynatrace Co., Ltd. (New York Stock Exchange:DT) a leading competitor in this field.
The company has an integrated observability and security platform with analytics and automation for cloud environments. The company's products include cloud automation, application security, log management, and analytics. Additionally, it is used in a variety of applications, including full visibility and real-time detection in multi-cloud and hybrid environments. Recently, DT announced the launch of his AI Observability. This allows clients to explore all AI-powered applications and quickly find the necessary bottlenecks and root causes of problems.
The company's stock price has fallen more than 18% since it released its third-quarter earnings report on February 8th. This predicament is a strange example of how sensitive tech stocks are to even the slightest bit of bad news.
Dynatrace claims to be “beyond the high end.” [company] Guidance across all metrics for the third quarter. ” That's true. Total revenue increased 23% and GAAP EPS increased from $0.05 to $0.14 year-over-year (YoY comparison). Annual recurring revenue (After arrival) grew 23% and subscription revenue grew 25%. However, these two metrics of his were slightly below Wall Street's expectations. ARR and Subscription ARR are important metrics for software companies, and missing these estimates was enough to cause the stock to fall.
Not only that, analysts remain optimistic on DT, giving it a Strong Buy rating and setting a high price forecast of $75. The 14-day RSI is 33.13, just above the oversold level. This makes Dynatrace one of the most oversold tech stocks to watch.
Coursera Inc. (COUR)
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Coursera Inc. (New York Stock Exchange:cool) provides a platform that connects learners and educators with educational content that is accessible and relevant to users. COUR has university partners who specialize in a variety of fields including data science, business, and technology. We also offer Coursera Plus, a subscription pricing model that gives learners access to specializations, guided projects, professional certifications, and thousands of courses for a small fee.
The stock has been under intense selling pressure this year. Some analysts expect AI headwinds to impact his COUR's financial performance, and this is reflected in the company's guidance.
Investors may be calling for an exit, but there may still be an opportunity for the brave. COUR reported that full-year revenue rose 21% to $635.8 million. Additionally, the company highlighted growth in its degree, enterprise, and consumer segments. This is primarily due to strong demand for entry-level professional certifications and new generative AI courses.
COUR expects 2024 sales to rise about 15% to $730 million to $740 million, which is slightly slower than growth in 2023, but will likely push the stock price higher. That's not a good enough reason to discount it completely. The year has just begun and anything can happen. Coursera's 14-day RSI of 29.87 currently ranks it as one of the most oversold tech stocks, offering interested investors a potential buying opportunity.
Akamai Technologies Co., Ltd. (AKAM)
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Distributed Denial of Service (DDoS) In this digital age, attacks and cyber-attacks are a daily occurrence. Therefore, the demand for cybersecurity is increasing.
Akamai Technologies Co., Ltd. (NASDAQ:Akamu) is well positioned to meet these demands. The company provides security, computing, and content delivery solutions to customers. This includes API protection, bot management, DDoS mitigation, global traffic management, and cloud computing services.
However, AKAM has fallen 13% since its latest earnings release. Analysts cited continued contraction in delivery segment revenues as the reason for the decline. Still, the report contained some good news.
Full-year sales were $3.81 billion, an increase of 5% from the previous year. Also, the security and computing segment accounted for his 60% of revenue, increasing by 17% in 2023. The company also provided optimistic guidance for the first quarter and his fiscal year 2024. Total revenue is expected to grow by 6-8%, and the security and computing segment will increase by 17% in 2023. The computing sector is expected to reach double-digit growth. To no one's surprise, the delivery segment was conspicuously absent from the guidance, indicating that the company expects sales to fall further next year.
AKAM's 14-day RSI is 28.12, which is significantly oversold. Still, the company is focused on profitability and is pushing to expand its security products and cloud computing platform. So this is a solid opportunity to buy this oversold tech stock while it's cheap.
On the date of publication, Rick Orford did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
