Technology stocks dominate 2024, with many investors favoring so-called “Big Seven” stocks such as Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla, as well as other lesser-known companies. Martin Frandsen of Major Asset Management continues to see potential in the Big Seven this year, but also sees value in other stocks in the sector. “There are several reasons to be optimistic about global technology stocks this year, as a combination of a favorable economic outlook and continued strong innovation provide strong opportunities for global technology companies,” the global equity portfolio manager told CNBC Pro. “Our expectation is that Magnificent 7 will continue to live up to its name, but at the same time, we do not believe they are created equally or sold at the same price. For these reasons, we expect that by 2025, the companies’ respective results may be That’s a big difference, which means investors need to be selective in the Mag 7. Frandsen believes that “there are a lot of attractive technology company opportunities outside of the Mag 7, but they are sometimes overlooked.” He said the stocks span areas such as artificial intelligence infrastructure, chips and data centers. Michele Schneider, chief market strategist at Marketgauge.com, echoed Frandsen’s comments, saying she sees “electric vehicles, robotics, healthcare (including weight-loss drugs) and in high-growth areas such as artificial intelligence and quantum computing.” This year “is poised to deliver substantial returns from strategic reallocation to undervalued assets”. Here are three tech stocks she’s betting on this year. Kratos Defense and Security Systems Schneider’s first choice is Kratos Defense and Security Systems, a U.S.-based defense and aerospace manufacturing company. The strategist said the company is known for its “development and production of high-performance drones designed for military and defense applications.” Kratos shares are up about 55% in the past 12 months. Of the 13 analysts covering the stock, eight have buy or overweight ratings, while the remaining five have hold ratings, according to FactSet data. Their average price target is $30.17, giving the stock an upside potential of 2.7%. International Business Machines IBM, the leader in quantum computing, is another company Schneider has her eye on this year, thanks to what she calls its “innovation in developing both hardware (quantum processors) and software (quantum processors). “Significant progress” in tools such as Qiskit) is necessary for quantum computing applications. “IBM is working hard to bring quantum computing into mainstream applications,” she added. IBM shares have risen about 32.5% in the past 12 months. Analysts are mixed on the stock, with only 43% giving it a buy or overweight rating, according to FactSet data. Their average price target is $229.69, giving it an upside potential of 4.5%. Salesforce As for the field of artificial intelligence, Schneider is betting on Salesforce. She described the company as being “deeply involved in artificial intelligence”, having “integrated the technology across its entire platform to enhance customer relationship management, increase productivity, automate tasks and provide predictive insights”. Features such as Salesforce Einstein, a generative AI tool for customer relationship management, as well as data visualization platform Tableau and software integration tool MuleSoft, are “ideal for companies looking to leverage artificial intelligence in sales, marketing and service operations.” A powerful tool,” she added. Schneider noted that the stock “has the potential to go to $500, depending on market conditions.” Salesforce’s stock price has risen nearly 17% in the past 12 months. Of the 55 analysts covering the stock, 42 have a buy or overweight rating, 11 have a hold rating, and the remaining two have a sell or underweight rating. Analysts’ average price target is $401.36, giving it an upside potential of 26.3%.
