Investors have been focused on AI-related technologies for nearly two years. And that focus has led to poor returns for other high-tech investment opportunities. With interest in AI still strong, but interest in AI stocks starting to wane, investors looking for a better opportunity may find it in other tech plays.
That’s because non-AI technologies can also offer high growth potential. From a new gadget to a biotech breakthrough, more off-the-radar tech plays look ready to move higher.
For instance, ON Semiconductor (ON), just reported mixed results. For the chipmaker, which focuses on automotive chips, that’s a good sign.
Why? It’s a step up from the poor results from slowing EV sales. That tech trend is starting to show signs of life. And that could help boost returns in the space further.
ON is up a scant 9% this year, far underperforming the overall stock market. The company is still coming off of a declining period, with earnings still down 41% over the last 12 months. However, shares trade at 15 times forward earnings, and sport a 25% profit margin.
Action to take: Speculative investors may like shares here as an overlooked tech trade, and could trend higher to re-test their all-time highs from early 2023 in the next year.
For traders, shares could break out of their multi-month trend. The January $85 calls, last trading for about $2.40, could see mid-double-digit returns on a year-end rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.