Increasing dependency on cloud-based services, data and analytics capabilities, and the requirement to automate business processes have been propelling the technology industry's growth. Therefore, fundamentally sound tech stocks Ribbon Communications (NASDAQ:RBBN), Alpha and Omega Semiconductor (NASDAQ:AOSL), and PCTEL (NASDAQ:PCTI), which look cheap at their current price levels, could be solid bets now.The COVID-19 pandemic has accelerated digital transformation and the requirement of business automation significantly. These, combined with the rapid adoption of advanced technologies for maintaining a remote lifestyle, are driving the growth of the technology market. According to the Forrester U.S. tech market growth forecast, the U.S. tech budget is expected to rise 9% to 10% in 2021.
Investors’ confidence in the technology industry is evident from the iShares Global Tech ETF’s (IXN) 11.8% returns over the past six months versus the SPDR S&P 500 ETF Trust’s (SPY) 9.6% gains. The growing demand for wireless technology, cloud computing, and increasing spending on strengthening analytical capabilities have created a positive outlook for the technology industry.
Thus, we think it could be wise to bet on quality tech stocks Ribbon Communications Inc. (RBBN), Alpha and Omega Semiconductor Limited (AOSL), and PCTEL, Inc. (PCTI), which look undervalued at their current price levels.