Stocks: Tech Sector still Oversold
Covid-19 brought a boom in the Tech industry, where investments and stock price increases dwarfed that of the general S&P 500. Teleconferencing, medical, computer hardware and every other focus that involved working from home or finding a cure saw unprecedented gains.
S&P Tech vs S&P 500 Index
S&P Tech saw huge gains compared to the general index after the Covid-19 fallout in March 2020
Fast forward to 2021 and the vaccine rollout is well on its way, most people are behaving like they did pre-pandemic, jobs are coming back and consumer sentiment is high. With transition back into the dreaded office, the tech sector took a massive hit.
S&P Tech vs S&P 500 Index
S&P Tech took a dive in March 2021 but has been recently recovering from its losses
Even with the recent tech sector comeback, there are several companies out there that can still be considered oversold and are primed to come back.
Palantir (PLTR): Recently awarded a 5 year $89.9M contract with the National Nuclear Security Administration, Palantir is primed for exponential growth in coming years. With a plethora of government contracts ranging from a $91M artificial intelligence and machine learning development contract with the US Army to a $44M analytics and data management solution for the FDA, Palantir has the foundation to expand into the private sector. They recently joined with 3M to build a dynamic supply chain and partnered with BP to help BP become a net zero company.
Why has their stock price failed to come back with the resurgence of tech?
Insider stock sales: On February 27th the post IPO lock-up ended and insiders were allowed to freely sell their shares. A high dollar amount of shares were sold, but it represented a small percentage of total shares held by employees. Much of the compensation to executives was in the form of stocks, so some shares needed to be sold just for tax purposes.
A whole lot of Butthurt: On March 16th Palantir Technologies CEO Alex Karp commented that Wall Street's emphasis on near-term gains is "one of the most destructive, corrosive attributes of an otherwise interesting and largely functioning system." He stated that Palantir will focus on building long-term health and product development and Wall Street did not take kindly to it.
During the big selloff, Cathie Wood's ARK ETFs purchased millions of shares. PLTR currently sits at $24.75 per share, but I predict that it will break $100 in late 2022 to early 2023.
NANODIMENSION (NNDM): Nano Dimension is a pioneer in producing 3D printing machines for integrating conductive and dielectric materials with capacitors, antennas, coils, transformers and electromechanical components. This allows companies to quickly and efficiently produce circuits for research and development as well as for retail production. By the end of 2025, this is expected to be a multibillion dollar industry. However, 3D printing of electronics is in its infancy and the market just isn't developed enough yet, resulting in a pullback in share price that hasn't recovered.
This is a short term pullback. Nano Dimension will be a primary player in this new tech segment and once their solutions are implemented by manufacturers and integrated into production lines, their expansion will be parabolic. Currently, NNDM share price sits at $7.60. This price is on par with their current value, but very low considering their massive potential.