More companies had their initial public offerings (IPOs) on the U.S. stock market last year than any other in history, and a staggering number with recent market debuts posted fantastic gains out of the gate and in subsequent trading. IPO stocks have been incredibly hot of late…
While investors may want to exercise some general caution amid the IPO fervor, there are promising stocks in the recent IPO class that will likely go on to deliver strong performances over the long term. Read on to get the rundown on three top IPO stocks to buy early in 2021.
1. Unity Software
Unity Software (NYSE:U) is a company that had its initial public offering in September and is best known for its video game development tools. As a visual development language and interface, Unity offers software developers a streamlined and simplified way to create visually focused programs.
With a market cap of roughly $39 billion, valuing the company at about 41 times this year’s expected sales, it’s not unfair to question whether Unity’s stock has climbed too fast for a simple video game engine provider. On the other hand, the company has other avenues to big growth.
There’s a good chance that Unity’s services will see adoption outside of the video game space. To put that potential in perspective, it’s helpful to look at what NVIDIA has been able to accomplish.
NVIDIA’s core business has long revolved around graphics processing units (GPUs) specifically tailored for high-end gaming applications. However, the company’s sales outlook and stock performance eventually exploded as demand for high-performance GPUs to support emerging technologies — including data centers, machine vision, and artificial intelligence — transformed the business.
While the comparison is different in some respects because Unity is operating in the software space, Unity is already seeing growth outside of gaming, and the company has a clear path to continued expansion in other areas. Augmented reality has the potential to be one of the defining technologies of the next decade, and Unity’s relatively easy-to-use tools for crafting real-time 3D content could make it one of the emerging medium’s biggest winners.
2. ContextLogic
E-commerce has never been bigger, but growth for online retail is still in its early days. ContextLogic (NASDAQ:WISH) is the parent company of Wish, a budget-focused e-commerce platform that looks poised to benefit from its specialized focus and momentum for the broader industry.
Wish has roughly 100 million monthly active users on its platform and 500,000 merchant partners.Mobile data tracker Sensor Tower reports that Wish was the most downloaded mobile shopping application in 2017, 2018, and 2019. While the tracker has yet to release its official tally for…
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