2 Top Tech Stocks To Buy for the Long Haul

2022 has been a rough year for tech stocks. After booming through much of the pandemic, concerns about rising interest rates and a recession have cooled the tech sector this year, especially high-value growth stocks.

Although the bear market can be demoralizing for investors, it is no excuse to avoid the sector. In fact, bear markets often present great opportunities to buy battered growth stocks, as many of them are undervalued due to temporary headwinds. Coming out of the Great Recession, several growth stocks generated multiple returns, and this selloff could offer another opportunity to get some of the best stocks cheaply. Read on for two tech stocks that could do just that.

1. Okay

okta (OKTA -5.64%) the stock slammed after its most recent earnings report. The company said it was having challenges integrating Auth0, the customer identity software company it acquired last year. It also backed off its long-term guidance of $4 billion in annual revenue by January 2026.

Despite those setbacks, Okta remains the leader in cloud identity software, providing the tools that enable employees and customers to securely and seamlessly log in and stay connected. Okta values ​​the market in which it competes at $80 billion; Currently, its annual income is below 2,000 million dollars.

The company has achieved remarkably consistent revenue growth, even during the pandemic, with revenue increasing 37% or more every quarter since its initial public offering (IPO) in 2017. Although the stock slumped in its report for the In the second quarter, revenue grew 43%, and the company raised its guidance for the year.

Okta shares are now down nearly 80% from their peak last year, and the shares trade at a price-to-sales ratio of just over six, making them the cheapest they’ve ever been by that metric. . The company should recover from the recent setback as it hired new salespeople to replace those it lost after the merger. Additionally, it has adjusted its merchandising strategy to make it easier for customers and their sales force to understand which customer identity product, Okta or Auth0, is best for them. If those changes have the desired impact, Okta’s stock should bounce back shortly.

2. Axon Company

Axon Company (AXON -1.52%) it doesn’t fit the conventional definition of a technology company. The company makes technology devices and software for law enforcement, including TASER electric stun guns, body cameras and cloud-based software that helps agencies manage things like records and evidence.

Its products reinforce each other, making it a unique company with essentially no direct competition in its suite of hardware and software products. TASER, a brand name, is synonymous with stun guns, demonstrating their dominance in that market. And Axon is the market leader in body and dash cameras, a growing category at a time when evidence of police misconduct has increased, thanks to smartphone cameras.

As a result of that market leadership, Axon has achieved strong growth and solid earnings. In its most recent quarter, revenue grew 31% to $286 million, led by TASER and body and dash cameras, while its revenue from new software-as-a-service products nearly tripled, showing that investments in software are paying off. . Adjusted net income in the quarter rose 16% to $31.8 million, and the company raised its full-year revenue forecast by 27% to $1.07-1.12 billion.

With a leading market position, a history of innovation, and new products like drone software, virtual reality training tools, and license plate recognition technology, Axon’s stock should continue its long-term record of outperformance.

Jeremy Bowman has positions at Axon Enterprise and Okta. The Motley Fool has posts and recommends Axon Enterprise and Okta. The Motley Fool has a disclosure policy.

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