No stock can become a high-flyer overnight.
It takes years and steady revenue growth for them to reach the peaks. Smart investors are aware of the fact that identifying under-the-radar stocks on time could lead to impressive returns in the long term.
Technology is one of the fastest growing sectors in the economy. It has led to massive gains for investors over the past year. The large-cap tech stocks always gain attention but then there are a few little-known tech stocks that can outperform the market. Being able to identify such stocks and look beyond the traditional big names could benefit long-term investors.
Here are the three under-appreciated stocks to add to your buy list.
MakeMyTrip (MMYT)
India-based MakeMyTrip (NASDAQ:MMYT) is up 175% in the past 12 months and 47% year-to-date (YTD). Trading at $68 today, the stock has a significant upside potential driven by the travel boom in the country.
India is one of the fastest-growing economies and will continue to remain one for the next five years. Driven by high purchasing power and a growing middle class, the tourism sector will see a significant surge in spending.
If MakeMyTrip manages to benefit fro this massive opportunity, it could become one of the biggest travel stocks over the decade. Currently, MMYT dominates in the Indian travel market, often using special offers and discounts to attract users.
In 2023, the company saw the highest-ever annual gross bookings which was up by 122% year-over-year (YOY). Then, it reported a profit of $5.4 million in Q4, up from the loss reported in the same quarter the previous year. The upcoming summer will see a surge in travel. So expect the same reflected in the company’s revenue.
Estimates indicate that 43% of Indians are planning to take a trip this year. Furthermore, an American Express (NYSE:AXP) report highlights that 62% of Indians plan to spend more on travel compared to the 40% global average.
Driven by the rapid expansion of the economy, we can expect MakeMyTrip to show accelerated growth.
Baidu (BIDU)
Despite China and U.S. geopolitical tensions, Baidu (NASDAQ:BIDU) is an under-the-radar stock because of its artificial intelligence (AI) prowess.
Baidu has been integrating AI into its services at a rapid pace. Its chatbot known as Ernie already attracts 200 million daily users.
BIDU is expanding its quantum computing sector and investing in R&D spending on research and development. Recently, Tesla (NASDAQ:TSLA) and Baidu sealed a deal where Baidu will offer its Chinese maps to Tesla for the development of its full self-driving vehicle.
In fact, Baidu is one of the 20 Chinese entities with top-level map surveying qualifications So, the stock popped after this announcement. BIDU is up 5% in the week and is exchanging hands for $111.
Even Apple held talks with Baidu for the usage of AI for its devices in China. But no confirmation has come through yet. A drop in sales in China and growing competition could have led to Apple considering working with a Chinese company to accelerate AI in its models.
Overall, Baidu stock is down 9% YTD and 11% in the past 12 months. However, Baidu’s AI investment and the Tesla deal could help revenue growth.
Pure Storage (PSTG)
Pure Storage (NASDAQ:PSTG) is a tech company that offers flash memory-based server storage solutions. Its storage solutions make it easier for companies to get access to AI-driven insights and their solutions can be automatically added into the AI products. Due to the massive amount of data needed for AI applications, Pure Storage’s products will continue to dominate the industry.
In the fourth quarter, the company saw a rise in the subscription revenue. And it has a strong outlook for fiscal 2025. After beating estimates, the management guided for a double-digit percentage rate improvement in operating income and revenue.
For the full year, its revenue came in at $2.8 billion and the subscription revenue stood at $1.2 billion, up 26% YOY. It ended the year with outstanding performance obligations worth $2.3 billion, up 31% YOY.
The stock is already up 127% in the 12 months and 50% YTD. It has set momentum for the year and the upcoming results could give it a boost. This under-the-radar stock can hit record highs.
If you think there are better AI stocks around, you are not wrong. Pure Storage isn’t the hottest AI stock, but it has potential to generate impressive gains.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.