Apple (NASDAQ:AAPL) represents the pinnacle of success for tech stocks with its revolutionary products and multi-trillion-dollar market cap. While the odds of another nascent tech company reaching those lofty heights are slim, plenty possess the potential to generate substantial returns.
Many of today’s market-leading tech stocks were once small, speculative companies themselves. Had you invested $10,000 in Amazon’s (NASDAQ:AMZN) 1997 IPO, it would be worth over $14 million today. Of course, unearthing 1,000%+ returns in the volatile tech sector requires patience and ignoring short-term volatility.
Admittedly, accurately predicting which tech stocks will become the next Apple or Amazon is impossible. The tech sector sees endless disruption, with today’s high-flyers often usurped by upstarts. Instead, we’ll identify innovators with large addressable markets and favorable competitive positions to raise the odds of multibagger returns.
With that in mind, here are three such tech stocks that could conceivably hand you Apple-like returns down the road.
Turtle Beach (HEAR)
Source: Merla / Shutterstock.com
Gaming headset maker Turtle Beach (NASDAQ:HEAR) offers substantial upside potential for investors seeking emerging trends in tech stocks. This $180 million tech company dominates the console gaming headphones niche, commanding over 40% market share on the latest generation consoles.
While Turtle Beach currently relies heavily on its core console headset tech segment, the company has ample avenues to drive growth in the years ahead, as gaming continues growing into a $62 billion market by 2032. The industry as a whole is expected to be worth $665 billion by 2030.
I admit that headphones are a small portion of that. Still, the company is expanding its tech offerings and moving into adjacent gaming accessories categories like keyboards, mice, and controllers, to become a broader provider. These massive accessory tech markets are several times larger than gaming headsets. Turtle Beach has already grabbed over 20% share in some of these segments.
Turtle Beach’s recent tech forays into gaming simulation controllers and maintenance services further leverage its gaming DNA. As gaming becomes more immersive and complex, substantial cross-selling tech opportunities are arising.
Even though it missed its earnings expectations recently, I remain optimistic on this stock. Turtle Beach is expected to deliver double-digit revenue growth this year and for the foreseeable future, and it is also likely to turn profitable next year. Trading at just 0.66-times sales, HEAR stock trades at a substantial discount to tech peers, giving it room to run as the company executes on becoming a global gaming tech accessory powerhouse.
Though Synaptics (NASDAQ:SYNA) slid into the red with the recent tech downturn, substantial upside potential awaits as the company returns to growth.
Synaptics provides the touch, display, and wireless chips that enable intuitive interaction with today’s sleek tech gadgets. The company counts Apple, Samsung, Tesla (NASDAQ:TSLA), and other giants as customers across mobile, PC, auto, IoT, and smart home tech categories.
While analysts expect the company to shrink in 2023 (company fiscal 2024) due to the tech inventory correction, Synaptics is expected to bounce back strongly in 2025. I’d also note that it outperformed Wall Street expectations by a fair margin in its latest quarterly report. Analysts now project 23.5% revenue growth next year, driving its earnings per share above $7 compared to an estimated $3 this year.
Synaptics continues seeing robust tech design win momentum, particularly in automotive displays. The company’s human presence detection and wireless connectivity tech chips also drive future growth. Sure, it does look a little pricey right now, but if we consider 2024 earnings, the forward price-earnings ratio on this stock drops to just 12.2-times. SYNA stock appears significantly undervalued, with that in mind.
Source: zhu difeng / ShutterStock.com
Chinese electronics giant Xiaomi (OTCMKTS:XIACY) offers compelling value if you’re looking for more contrarian tech stocks. While this tech giant has faced economic and geopolitical headwinds, its long-term opportunity remains very attractive. Xiaomi operates a hardware, software, and services tech ecosystem focused on consumer electronics and smart home products. The company currently services nearly 600 million active users, but this fact is rarely mentioned due to its focus on developing markets.
Indeed, Xiaomi’s expansion in Western markets faces obstacles, but the company continues firing on all cylinders within China and other developing markets as a tech leader. Xiaomi grew smartphone shipments by 8.3% last quarter, gaining a substantial share in Europe and the Middle East. Profitability also improved substantially amid better cost controls.
Trading at only 1-times forward sales, and with double-digit revenue growth expected for the next two years, XIACY stock appears significantly undervalued. That said, I’m putting this at the bottom of the list due to geopolitical conditions. But for those with the willingness to accept this risk, this is a stock with big upside potential worth considering.
On the date of publication, Omor Ibne Ehsan did not have (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.
Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.
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