2 Best Discounted Stocks Preparing for a Bull Market

Technology stocks have performed strongly over the past few years despite all the market volatility. But there are still bargains in the space that appear poised to rise higher. Let’s evaluate two low-cost technology stocks that are poised for a bull market.

alphabet

while alphabet (google 1.15%) (GOOG 1.14%) Despite its strong performance, up 50% over the past year, the stock remains cheap. Valued at a forward price-to-earnings (P/E) ratio of approximately 23, the stock is trading at a discount compared to where it has historically traded and other leading artificial intelligence (AI) stocks, including: microsoft.

GOOGL P/E Ratio (Forward) Data from YCharts

This assessment comes despite the company’s strong first quarter performance. Its cloud computing business, Google Cloud, led the pack with revenue growth of 28% to $9.6 billion, driven by its AI hypercomputer that can be used to train and serve AI models efficiently and cost-effectively.

Meanwhile, Alphabet’s core search revenue rose 14% to $46.2 billion, while YouTube advertising revenue rose 21% to $8.1 billion. The company is using AI across its entire advertising ecosystem to improve targeting and bidding, as well as other areas like creative and measurement.

Meanwhile, at the Google I/O developer conference, the company announced that it would be rolling out AI overlays in search results for more complex queries and questions. Alphabet currently doesn’t show ads on 80% of searches, and this new feature would open the door for the company to use new ad formats to monetize searches it currently doesn’t monetize.

This makes Alphabet a cheap stock with a huge growth runway and a top pick to buy ahead of a potential bull market.

opera

Here are some other cheap tech stocks that are under the radar: opera limited (opera -0.04%). The web browser maker has a forward P/E of just 15, even though it expects revenue to grow 16% this year.

OPRA PE Ratio (Forward) Data from YCharts

Opera offers a variety of Internet browsers designed to optimize speed and battery life. that The Opera GX browser is built to optimize gaming performance and is the fastest growing browser. The company has also been at the forefront of integrating AI capabilities directly into browsers.

The company makes money in two main ways: The first is simply through advertising. We also have a revenue sharing agreement with Google when people use one of our built-in search boxes. Google has exercised its option to extend its contract with Opera until the end of 2025 under its current terms.

Image source: Getty Images.

Meanwhile, Opera continued its strong sales growth, with first quarter sales up 17% to $101.9 million. Advertising revenue increased 21% to $58.6 million due to expansion of the Opera Ads platform. Search revenue increased 11% to $43.1 million.

Opera’s web browser has long been popular in developing countries due to its performance in places where Internet speeds are limited. But a big part of the company’s strategy has been to focus on higher-value users in developed countries. This paid off, with average revenue per user (ARPU) growing 24% to $1.34 in the first quarter.

The company also generated solid operating cash flow of $31 million in the quarter, which it is using to keep AI hosting costs in check by building out a data center cluster in Iceland. In Iceland, the cost of self-hosting is said to be one-tenth of the cost of using a third party.

The opera also has some interesting hidden assets. The company owns an investment in Nigerian fintech company OPay. softbank Sequoia Capital China increased its revenue by 60% in constant currency last year and quadrupled its user base. The company reported its first monthly earnings earlier this month. Opera significantly increased the value of its investment to $253 million at the end of last year and plans to exit the position in due course. Opera’s market cap is only $1.2 billion, so this is no small investment.

Even without considering investing in OPay, Opera is a cheap stock that is showing strong growth, benefiting from AI and increasing user adoption in developed markets. Meanwhile, the European Union recently implemented browser choice requirements, which helped drive new iOS users in the region. When you use Opay, Opera stock gets a huge discount.

Overall, Opera looks like a cheap tech stock growing strongly ahead of a bull market.