Got $3,000? These 3 Tech Stocks Could Make You Rich in 2021
Tech stocks had a huge year in 2020, and the run could continue for some of them.
Nicholas Rossolillo, Anders Bylund, And Billy Duberstein(TMFnrossolillo)Dec 26, 2020 at 6:00AMAuthor BioFollow @nrossolillo
2020 was nothing short of a disaster, but there were some positives. If you were invested in technology, a pandemic-fueled run higher by many stocks that benefited from employees working from home was one consolation prize.
The surge higher for some of these tech names could continue into the new year. If you have $3,000 and time to wait, three of our Fool.com contributors think Magnite (NASDAQ:MGNI), Roku (NASDAQ:ROKU), and Dell Technologies (NYSE:DELL) could be worth some of your hard-earned money in 2021 and beyond.
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Digital ads are far from spent
Nicholas Rossolillo: Advertising-technology platform Magnite was a 2020 late bloomer. A product of the merger between Telaria and The Rubicon Project, Magnite shares were down for most of 2020 before suddenly exploding higher following the company’s third-quarter report in November. The stock is now suddenly sporting a more than 220% gain on the year.
There could be more good stuff to come in 2021. On the surface, Magnite’s 12% year-over-year revenue increase in Q3 (when compared to Telaria and The Rubicon Project a year ago) isn’t particularly impressive. But the pace of growth is set to accelerate. Management expects revenue to be up 18% sequentially in Q4 over Q3. Another plus is that this is still a very small name in a massive digital-advertising industry.
In fact, even after its recent run-up, Magnite is just a $3 billion market-cap business. By contrast, its peer The Trade Desk — a buy-side platform for advertisers, versus a sell-side platform like Magnite, which helps content producers monetize their content — has a $45 billion market cap. And both of them pale in comparison to the mega-cap size of the advertising duopoly Alphabet and Facebook. Put another way, Magnite has ample room to grow, and even small waves in the global marketing industry, which encompasses hundreds of billions in spending every year, can tally up to big returns for this small player.
The table is being set for some wave making. Magnite is generating most of its growth in the last year from the connected-TV industry, but its digital data platform for content creators and advertisers could become increasingly important as consumer privacy gets more strict and prompts some needed changes, like no more application-activity tracking.
A rebound in advertising after the economic slump this year will also help. At less than 12 times trailing-12-month sales and quickly closing in on breakeven, shares look reasonably priced given the potential. I think there’s plenty more upside for Magnite in the years to come.
2020 was great, but hardly a record
Anders Bylund: Streaming services are quickly becoming the new normal distribution method for all sorts of media. This process started many years ago but was accelerated by the coronavirus pandemic in 2020. Many investors are still unsure what to make of this secular trend because they can’t tell exactly which media-streaming services will win or lose in the long run.
With Roku (NASDAQ:ROKU), you can invest directly in the booming stre