The demand for technology solutions is expected to remain high in the near term owing to ongoing digitization and the spread of the COVID-19 Delta variant. However, since overpriced tech stocks are now more prone to a correction because investors remain concerned about inflationary pressures, low-priced tech stocks Absolute Software (ABST) and AstroNova (ALOT) could be safe bets now. Trading at less than $20, we think these two stocks have the potential to generate substantial returns in the near term. Read on.The tech-heavy Nasdaq Composite declined 0.5% over the last four trading days on investors’ concerns about strong inflationary pressures. However, strong corporate earnings reported by the tech companies rekindled investor interest in the technology industry. This is evidenced by the Technology Select Sector SPDR Fund’s (XLK) 17.4% returns over the past three months.
Furthermore, rapid digitalization is increasing the demand for advanced technology solutions. And the continued deployment of 5G is expected to boost the industry's growth. The resurgence of COVID-19 cases has also made the backdrop favorable for the technology industry because it suggests a prolonging of remote activities adopted during the worst of the pandemic. .
But because investors expect a market correction in the near term, several overpriced tech stocks could suffer a decline. So, we think it could be wise to bet on affordably priced tech stocks. Absolute Software Corporation (ABST) and AstroNova Inc. (ALOT), which are currently trading below $20. fit the bill because they possess sufficient fundamental strength to create significant value for investors in the coming months.