Even though investors have been rotating away from tech stocks with the economy’s gradual recovery, the industry is well positioned to resume its rally due to the rising demand for cloud computing, artificial intelligence (AI) and 5G-enabled products and services. So, we think it could be wise to invest now in low-priced tech stocks United Microelectronics (UMC), AU Optronics (AUOTY), Seiko Epson (OTC:SEKEY), and Richardson Electronics (RELL) to capitalize on their solid financials and immense growth potential. Read on.Most tech stocks soared to new highs last year due to a COVID-19-led dependency on technology. However, the ongoing economic recovery and fears about rising inflation have been motivating investors to rotate away from expensive tech stocks into quality cyclical stocks. This is evident in the Technology Select Sector SPDR Fund’s (XLK) 5.5% gains over the past three months versus the SPDR S&P 500 ETF Trust’s (SPY) 10.2% returns.
This has created an impressive opportunity to buy fundamentally sound tech stocks at reasonable prices. Continued digital transformation and increasing use of cloud computing, artificial intelligence (AI), 5G technology and other innovations could drive a rebound in the technology sector in the near to mid-term.
Given this backdrop, we think it is wise to bet now on United Microelectronics Corporation (UMC), AU Optronics Corp. (AUOTY), Seiko Epson Corporation (SEKEY) and Richardson Electronics, Ltd. (RELL). They are all currently trading at less than $10 but hold considerable upside potential.