2 Cheap Tech Stocks to Buy Right Now

It can be difficult to define "cheap," particularly on Wall Street. However, in the context of this article, it means a stock with a price below $50.

Let's look at two tech stocks that meet this criterion, and why investors might want to strongly consider one or both for their portfolios.

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SoundHound AI

Topping my list is SoundHound AI (NASDAQ: SOUN). It qualifies as a cheap stock thanks to its share price (about $21 as of this writing). On a valuation basis, its price-to-sales ratio (P/S) of more than 75 makes it quite expensive.

However, like many hypergrowth tech stocks, there's a reason investors have paid up for SoundHound shares, and it's the ongoing AI boom.

The corporate world is making enormous investments in artificial intelligence (AI) technology. Companies including Microsoft, Amazon, and Meta Platforms are spending billions to build or expand AI data centers, but it's not just the big tech players that are over the moon for AI.

Consumer brands, financial companies, and healthcare providers are all recognizing that they need to develop an AI strategy, lest they fall behind their competitors. And that's where SoundHound AI comes in.

The company's voice AI systems are crucial to businesses seeking to deploy customer-facing AI. SoundHound helps brands develop systems for ordering at a restaurant, in-car navigation, and other purposes. It has already partnered with iconic brands like Mercedes-Benz, Netflix, and Mastercard.

The company is very early in its lifecycle and has generated only $67 million in revenue over the last 12 months, with no profits. But it is growing quickly, with revenue having increased 89% in its most recent quarter (the three months ending on Sept. 30).

Growth-focused investors who are interested in what could be one of the best AI application companies around should keep an eye on SoundHound.

IonQ

As of this writing, the stock price of IonQ (NYSE: IONQ) is around $39, which qualifies it as cheap in my book -- at least when it comes to its share price. On a valuation basis, it's clear the company isn't that cheap, with less than $40 million in revenue over the last 12 months and no profits.

Yet the reason this company is so compelling to me is that it is a leader in the fascinating field of quantum computing. Unlike traditional binary computers that form the foundation of everything from smartphones to AI supercomputers, quantum computers operate on a more complex system of hardware logic.

It's like the difference between a steam engine and a rocket: They're both mechanisms for transportation, but the scale of their applications couldn't be more different.

In a nutshell, quantum computers will be vastly more powerful than today's best supercomputers -- once scientists can work out all the kinks. That's precisely what IonQ, along with competitors like Alphabet, are trying to do: design quantum computers so that they can be scaled up and used to solve incredibly complex problems.

But for the moment, technical challenges remain, meaning that this is a promising -- but not proven -- investment. More to the point, the company is free cash flow negative, meaning it must fund its operations through cash on hand, debt, or secondary equity offerings.

So, while IonQ is not for every investor, it is a compelling choice for those who are looking for a pure play in the quantum computing sector.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Mastercard, Meta Platforms, Microsoft, and Netflix. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard, long January 2026 $395 calls on Microsoft, short January 2025 $380 calls on Mastercard, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.