We recently published a list of the 8 best long-term tech stocks to invest in now. In this article, we’ll take a look at how Kaspi.kz Inc. (NASDAQ:KSPI) stands compared to other tech stocks that are great for long-term investing.
After a dire macroeconomic situation in 2022, the technology sector came to the rescue of the market in 2023. Investments in advanced technologies such as generative AI continue to show great potential for future business growth.
According to CNBC’s Q3 CFO Council Survey, 48% of CFOs said tech industry growth will outpace all other sectors in the next six months. Additionally, Leian Mitrione, investment management partner at the Curran Family Office, emphasized in an interview with CNBC on September 23 that the technology sector is a big beneficiary of the recent Fed rate cuts. Lower interest rates are good for technology companies, which often thrive in this environment.
The ongoing AI theme is also a key driver of the strong performance of technology companies. He further notes that while mega-cap tech stocks have traditionally been seen as a safe haven during times of economic uncertainty, the changing interest rate environment is broadening the focus to smaller, economically sensitive sectors. He said it was possible. Nevertheless, the strong momentum for AI-powered technologies is likely to continue for some time.
Global technology spending in 2024 is optimistic
High interest rates, economic concerns, and geopolitical issues slowed global technology spending in 2023, according to Deloitte’s 2024 Technology Outlook. However, there is growing optimism in 2024, with global IT spending growth expected to be between 5.7% and 8%. Growth areas include investments in software, IT services, and AI, with AI spending potentially reaching $200 billion by 2025. Cloud computing and cybersecurity are also expected to be in strong demand.
The report says that although Gen AI is gaining momentum, it is expected to grow slowly in 2024 and grow even more in 2025 as it is integrated into software and business processes to improve productivity and efficiency. states that it has been done. Demand for AI hardware is expected to exceed $50 billion next year, but businesses continue to explore AI monetization strategies.
Improve energy efficiency with AI
Furthermore, the growing influence of large technology companies and increased reliance on AI are significantly increasing energy demand. We discussed this in our article on 13 Big Tech Stocks to Buy Now. Below is an excerpt from the article.
“With the rise of big tech companies and the growing use of AI, a notable recent trend that people have started to notice is an increase in the demand for electricity. The owner recently went so far as to purchase a nuclear-powered data center for $650 million.
The main driver of this increased demand is the need for AI development. Many energy-conscious investors may see this new trend as a red flag for big tech companies. However, Jensen Huang points out that AI requires a lot of energy to train, but once developed and trained, it can also help save energy. In particular, he said that this development will make AI so advanced that it will ultimately provide solutions that will change the way energy is used and make businesses infinitely more energy efficient. ”
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Concerns about the power needed to power AI are justified, but industry pioneers like Nvidia CEO Jensen Huang say the technology itself can help solve that problem.
our methodology
In this article, we use the Finviz Stock Screener to identify 27 tech stocks with market caps above $10 billion, analyst ratings of Buy or Buy-equivalent, and average price targets for upside of more than 20%. I have identified it. As of September 26, we narrowed the list down to the eight stocks with the greatest increase in average analyst price target. Tech stocks that perform well over the long term are listed in descending order of increase in average analyst price target.
We also mentioned hedge fund sentiment for each stock, pulled from the Insider Monkey database of over 900 elite hedge funds.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
Is Kaspi.kz (NASDAQ:KSPI) the best long-term tech stock to invest in now?
An executive in a suit checking a bank of computers symbolizing technology in the financial services industry.
Joint Stock Company Kaspi.kz (NASDAQ:KSPI)
Analyst average price target upside: 46.76%
Number of hedge fund holders: 25 people
The joint stock company Kaspi.kz (NASDAQ:KSPI) is making significant progress in the field of financial technology and e-commerce in Kazakhstan. It has a strong suite of services including payments, marketplace solutions, and fintech products.
The company’s comprehensive super app caters to both consumers and merchants. The platform integrates cashless payments, personal financial management, electronic grocery shopping, travel booking, and access to a variety of government services, all of which enhance user convenience and drive high levels of engagement. Masu.
The results show that a significant portion of Kazakhstan’s population regularly uses apps, which play a central role in everyday financial activities. The company made headlines with its successful initial public offering (IPO) on the Nasdaq market in January 2024, raising over $1 billion, marking a historic moment as the first Kazakh company to debut on the exchange.
The IPO values Kaspi.kz (NASDAQ:KSPI) at approximately $17.5 billion, further strengthening its position. It ranks No. 4 on our list of the best long-term tech stocks to invest in right now.
In addition to established services such as Buy Now, Pay Later and Person to Person Transfers, continued innovation within the app, such as the launch of Kaspi Travel and Kaspi Classifieds, demonstrates the company’s commitment to meeting the diverse needs of consumers. is shown.
We have also achieved remarkable growth financially. Net profit in the second quarter increased by 25% year-on-year, and sales in the first half of 2024 surged by 38% to reach KZT 1.2 trillion (as of September 26, 1 KZT = USD 0.0021).
The Payments and Marketplace division was critical to this success, contributing 68% of net profit. Our focus on maximizing transaction intensity led to impressive transaction volume growth, increasing by 46% in Q2 and 44% in H1 2024. The continued popularity of bill payments, with the growth of Kaspi Pay transactions and the rapid adoption of B2B payments, played a key role in these achievements.
User engagement metrics further highlight the app’s success, with an average of 72 transactions per active consumer per month, making the Kaspi.kz (NASDAQ:KSPI) super app one of the most engaged in the world, according to the company. It is highly positioned as one of the leading mobile applications. Its competitiveness is largely supported by this large and active customer base.
Additionally, Kaspi’s e-Grocery service is rapidly expanding, with total product volume increasing 99% year-over-year and reaching approximately 639,000 active consumers during the quarter. The recent expansion into Shymkent, Kazakhstan’s third largest city, shows the sector’s great growth potential.
As of H1 2024, the company boasts a payments platform with 721,000 merchants and a marketplace platform serving 7.6 million consumers. Furthermore, the stock has a consensus rating of Buy, according to nine analysts. The average price target is $152.80, representing a 46.76% increase from the September 26th stock price.
With its impressive growth trajectory, continued innovation and extensive user engagement, the company is well-positioned for continued success in Kazakhstan’s dynamic fintech environment.
Overall, KSPI ranks 4th on our list of best tech stocks for long-term investing. While we see the potential of KSPI as an investment, we believe AI stocks have a better chance of delivering and achieving higher returns. shorter period. If you’re looking for AI stocks that have more promise than KSPI but trade at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: $30 trillion opportunity: Morgan Stanley’s 15 best humanoid robot stocks to buy and Jim Cramer says NVIDIA has ‘become a wasteland.’
Disclosure: None. This article was originally published on Insider Monkey.
