Affordable Technology Shares to Invest in Immediately
Discovering an affordable tech stock that's worth investing in today isn't a walk in the park. The S&P 500 (^GSPC 1.09%) has witnessed a remarkable 35% rise over the previous 12 months (as of Nov. 7), with a significant portion of this growth emerging from the tech sector.
However, there are still some bargain deals to be found, and I believe the two inexpensive tech stocks I'm about to mention are worth considering right now. Let me explain why.
1. Apple
While Apple (AAPL 1.88%) might appear ordinary compared to other more attention-grabbing tech stocks, its shares are currently trading at a forward price-to-earnings ratio of 29, which is significantly less than the broader tech sector's standard P/E ratio of 33.
But why Apple now? The company continues to deliver commendable financial results and is steering towards artificial intelligence (AI), which could potentially boost iPhone sales.
Recently, Apple reported its fourth-quarter earnings (ended Sept. 28), with revenue jumping by 6% to $96.4 billion, surpassing the experts' predictions. Moreover, adjusted earnings per share were $1.64, outperforming Wall Street's expectation of $1.60 per share.
The most significant highlight for Apple in the quarter was the 6% increase in iPhone revenue, indicating robust demand for its latest iPhone 16 series. More importantly, Apple introduced a new iOS software update, featuring its new Apple Intelligence, its term for AI.
Although Apple's AI push is moderate at present, it plans to introduce more features in the near future, such as the integration of ChatGPT with Siri. An ongoing rollout of AI features could potentially trigger an upgrade cycle among consumers, with Counterpoint Research estimating that approximately 50 million iPhone 12 users are eager for an upgrade.
With Apple's share prices less costly than the broader tech sector, investors might want to consider investing in this tech behemoth before it reaps the benefits from a boom in AI smartphone demand, expected to amount to 912 million smartphones by 2028, as predicted by IDC.
2. Alphabet
Alphabet (GOOG 1.72%) (GOOGL 1.54%) was caught off guard when OpenAI's ChatGPT burst onto the scene two years ago. However, since then, it has introduced new AI services and features, demonstrating that Alphabet is far from retreating in the tech arena.
To begin with, Alphabet introduced AI-powered responses to its search results and integrated its Gemini AI features into its Google Workspace products. During its third-quarter earnings call (which ended Sept. 30), the company's management announced that all seven of their core products and platforms now utilize Gemini models, reaching over 2 billion monthly users.
Although AI isn't Alphabet's sole focus. The company's Google Cloud ranks as the third-largest cloud provider (following Amazon and Microsoft), and its latest financial results present impressive growth for the business. Google Cloud sales increased by 35% from the previous year's quarter to $11.4 billion.
Alphabet's overall financial performance was commendable in the quarter, with revenue rising by 15% to $88.3 billion and earnings per share (EPS) soaring by 37% to $2.12. One of the primary factors contributing to growth was YouTube's subscription and ad revenue, which surpassed $50 billion in the combined previous four quarters.
One might think that investing in a tech giant that leads the way in AI and boasts substantial ad and subscription video services would be expensive, but Alphabet's current P/E ratio is just 22.7, significantly less than the S&P 500's current P/E of 27.8.
Alphabet may not seem as captivating as other AI investments, but it has already integrated AI into many of its products and services, maintains a strong presence in the tech industry, and offers shares at a relatively affordable price. This creates a compelling investment opportunity.
Following the remarkable growth of the tech sector, you might consider investing in Apple (AAPL), whose shares have a lower forward price-to-earnings ratio than the broader tech sector despite delivering strong financial results and embracing artificial intelligence.
On the other hand, Alphabet (GOOG, GOOGL) has shown its resilience in the tech arena after the introduction of ChatGPT, integrating AI into its search results and Google Workspace products. Despite its significant growth in Google Cloud and strong financial performance, its current P/E ratio is lower than the S&P 500's, making it an attractive investment opportunity to consider.
