Increasing investments and impressive breakthroughs in the technology industry make its long-term prospects bright. And because the broader market is experiencing volatility owing to surging inflation and supply chain disruptions, we think it could be wise to bet on undervalued tech stocks Micron (MU) and VMware (NYSE:VMW) for solid long-term returns. Let’s discuss.The increasing use of cloud computing, artificial intelligence, and other advanced technologies, and the rollout of 5G technology, should drive the technology industry’s growth. Although these factors have already driven the tech-heavy Nasdaq composite to hover near its all-time high, factors like historically-high inflation, intensifying supply-chain issues, and the Federal Reserve’s decision to begin tapering its bond-buying this month could drag the benchmark down in the near term.
Nevertheless, efforts to address a global semiconductor chip shortage and heightened demand for next-generation tech products and solutions have boosted investor interest in this industry. This is evidenced by the iShares U.S. Technology ETF’s (IYW) 8.4% returns over the past month versus the SPDR S&P 500 ETF Trust’s (SPY) 5% gains.
Because major tech stocks trading at expensive valuations may experience a correction amid the market volatility, we think it could be wise to bet on undervalued tech stocks Micron Technology, Inc. (NASDAQ:MU) and VMware, Inc. (VMW) to cash in on the industry’s long-term growth.