3 Tech Stocks to Buy on the Dip: May 2024

Stocks to buy

Buying tech stocks on the dip can generate meaningful long-term returns, especially as investors abandon previous favorites. Some tech stocks that grew out of favor in 2022 logged impressive gains the following year. 

Not all tech stocks are meant to reclaim their all-time highs, and some investors may have to wait patiently before dips become present for their favorite tech stocks. You may want to keep these investments on your radar when the stock market enters a correction and drags down individual stocks.

Duolingo (DUOL)

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Duolingo (NASDAQ:DUOL) is in the middle of a correction that hopefully goes deeper. The stock trades at a 180 P/E ratio, and a further dip can make it more affordable. While the valuation is a bit high, the corporation is doing everything else right. 

The educational tech company has a vibrant language learning app that has expanded into additional subjects like music and math. People have been flocking to the app and have been staying active on it. Duolingo reported 31.4 million daily active users and 97.6 million monthly active users in Q1 2024. Those figures represent 54% and 35% year-over-year gains, respectively.

Duolingo also reported solid financials. Revenue increased by 45% year-over-year while net income flipped from a $2.6 million net loss to a $27.0 million profit in one year. Doling’s rising profit margins are a key strength that can support meaningful gains in the years ahead. However, market sentiment and a lofty valuation can result in a more attractive buying opportunity if investors are patient.

Nvidia (NVDA)

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It doesn’t seem like Nvidia (NASDAQ:NVDA) will dip anytime soon, but it can become attractive when the dip finally takes shape. Nvidia’s latest earnings report demonstrated why it’s at the top of the AI race. 

Nvidia can amass the largest market cap among publicly traded corporations. Revenue increased by 262% year-over-year in Q1 FY25, while net income surged by 628% year-over-year. Shares now trade at a 60 P/E ratio and have doubled year-to-date. The stock has also increased by more than 2,700% over the past five years.

The tech stock has been very popular among Wall Street analysts. It’s rated as a “Strong Buy” with a projected 14% upside. Recent price targets after Nvidia’s earnings blowout suggest the stock can rally by as much as 36% from current levels. The highest price target is currently $1,400 per share. 

Crowdstrike (CRWD)

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Crowdstrike (NASDAQ:CRWD) trades at an 88 forward P/E ratio, which may scare off value investors. The high valuation makes it due for a correction, but other than that, the corporation is solid.

Crowdstrike stock has more than doubled over the past year, and its financial results indicate why that’s the case. Revenue increased by 33% year-over-year in Q4 FY24. Net income came to $53.7 million compared to a net loss of $47.5 million in the same period last year.

Businesses need to protect themselves from online hackers. These cyber criminals use AI tools and other resources to infiltrate databases and access sensitive information. Crowdstrike allows business owners to detect threats and stop them before hackers obtain valuable assets. Crowdstrike also has $3.44 billion in annual recurring revenue, a good foundation for future financial growth. The stock is rated as a “Strong Buy” with a projected 16% upside.

On this date of publication, Marc Guberti held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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