Two tech companies' shares to invest in during November.
If you're hunting for tomorrow's business victors, the tech sector is one of the finest places to initiate your search. It's spawned plenty of market-crushing stocks in recent decades, and artificial intelligence (AI) is a colossal chance that could generate colossal wealth for investors in the upcoming years.
Here are two tech stocks appearing ripe for acquisition in November.
1. Micron Technology
Shares of Micron Technology (MU -4.59%) scaled a high of $157 earlier this year before sliding down to around $100 at the time of writing. This slide has intensified the stock's appeal, as the most recent financial report indicated surging demand from data centers for the company's high-capacity memory products.
Micron has witnessed a swift rebound in its revenue over the past year. In its fiscal 2024 fourth quarter, which concluded on Aug. 29, revenue increased by 93% year over year, suggesting the company's growth is accelerating. Strong demand trends are boosting its profits, which resulted in Micron's earnings per share more than doubling over the year-ago quarter.
Profits are expected to continue surging as Micron shifts more production to higher-margin products such as high-bandwidth memory that are predicted to see exploding demand in the upcoming year. Management is witnessing demand from AI and traditional servers, which indicates a broad strength across the data center market.
Micron is ramping up production as much as it can to meet demand, as supply is the primary factor limiting its sales. This will significantly enhance the company's profits. On average, Wall Street analysts currently forecast Micron's adjusted earnings per share to leap from $1.30 in its fiscal 2024 to $8.93 in its fiscal 2025, according to Yahoo Finance.
Given these trends, the stock's valuation seems appealing at just 11 times next year's earnings. In relation to its expected fiscal 2026 results, the stock carries an even cheaper forward price-to-earnings (P/E) ratio of 8. Micron shareholders are looking at potentially substantial upsides over the next few years.
2. HubSpot
HubSpot (HUBS -2.27%) provides an effortless-to-use platform that assists small businesses in managing services, marketing, and sales. It has delivered impressive growth in recent years and produced extraordinary returns for its shareholders. The stock has risen by 18% since the company reported its third-quarter results in early November.
Revenue increased by 20% year over year on a constant-currency basis in Q3, fueled by 10,000 new customer additions -- bringing the total customer count to 238,000 -- and continued spending by established customers. It reported strong interest from customers in new AI features such as a new Copilot assistant, which is currently in beta testing.
These were commendable results during a relatively weak year of growth for leading software providers. Businesses have been reluctant to invest in software, but HubSpot has overcome this challenge. While it expects revenue growth to slow again to approximately 16% year over year in the fourth quarter, Wall Street is starting to recognize HubSpot's long-term opportunities and its capacity to enhance margins.
HubSpot is demonstrating signs of constructing a durable competitive moat. Its adjusted operating margin improved from 16.5% in Q3 2023 to 18.7% in Q3 2024. This was an impressive performance following management's move to reduce prices to attract more customers. It indicates the company's ability to compete on pricing and still grow profits, which helps explain why the stock is rising.
On a price-to-sales basis, the shares still look appealing at a multiple of 14. The stock has skyrocketed by more than 2,000% since its IPO in 2014, but its average P/S ratio over the last decade was just over 12. With HubSpot still in growth mode, investors can anticipate earning returns that are consistent with the company's revenue growth over the long term.
Investors looking to diversify their tech portfolio may find Micron Technology (MU) an appealing option due to its strong financial performance and potential for further growth in the AI and data center markets. Micron's forward price-to-earnings (P/E) ratio of 8 suggests that the stock's valuation is relatively low compared to its expected fiscal 2026 earnings, potentially providing significant upsides for Micron shareholders.
Furthermore, the finance sector offers opportunities for investing in companies that leverage technology to offer innovative solutions. HubSpot (HUBS), for instance, has created a user-friendly platform assisting small businesses in managing services, marketing, and sales. With a strong third-quarter performance, impressive customer growth, and ongoing investments in AI, HubSpot presents an appealing choice for investors seeking long-term growth and potential returns.
