Tech stocks have been on a downtrend amid the ongoing economic recovery, but most of them have the potential to recover based on increasing demand for tech solutions from almost all industries and continued innovations in the sector. After losing some value lately, Sharp (OTC:SHCAY), Diodes (NASDAQ:DIOD), and Extreme (EXTR) are currently trading at attractive valuations. So, we think betting on these stocks at their current price levels could be rewarding. Let’s discuss.The technology industry has not been able to maintain its last year’s performance so far this year because the economic recovery has motivated investors to rotate away from expensive tech stocks to cyclical stocks. This shift is evidenced by the Technology Select Sector SPDR Fund’s (XLK) 2.8% loss over the past month.
However, growing demand for tech solutions from almost all industries, and technological advances in cloud computing, artificial intelligence (AI), and 5G communications, among other areas, are expected to shape the industry’s future.
Fundamentally sound tech players Sharp Corporation (SHCAY), Diodes Incorporated (DIOD), and Extreme Networks , Inc. (NASDAQ:EXTR) have witnessed price declines lately thanks to the broader industry’s downtrend, and they look undervalued now. So, given their solid growth prospects, we think betting on these stocks at their current price levels could generate significant returns in the near term.