The global shift toward digitalization is creating opportunities across various markets as companies integrate AI, machine learning, and blockchain technologies. Zacks has fingered three stocks that could benefit from the rapid growth in what it calls the technology services market: the small caps Byrna Technologies and Climb Global Solutions, as well as the giant Spotify Technology.
Byrna Technologies
Byrna, with a market capitalization of $326.9 million, describes itself as a tech company that develops less-lethal weapons and ammunition for the military, law enforcement agencies, and retail clients, like homeowners, hunters, and weapons collectors.
Byrna is seeing a boost from significant changes in its advertising strategy, according to Zacks. Since last year, it has been paying celebrities to endorse its products, leading to a boost in direct-to-consumer sales via its own website and its Amazon storefront. The company reported 76% year-over-year growth in net revenue in the second quarter to $20.3 million, while net profit amounted to $2.1 million, compared to a loss of $1.1 million in the same period last year. The share price has risen 125% since the beginning of the year.
Climb Global Solutions
Climb, with a market capitalization of $404.6 million, is a distributor of software for cloud-based technologies and data centers. Its organic growth is driven by strengthening relationships with existing partners, signing new vendors, and delivering on acquisition goals, argues Zacks.
In the second quarter of 2024, Climb’s net sales grew 13% year over year to $92.1 million, while net profit more than doubled to $3.4 million. Along with the financials, the company announced the acquisition of Douglas Stewart Software & Services (DSS), a specialty distributor of software for the education market. Climb stock has advanced more than 60% since the beginning of the year.
Spotify Technology
The streaming audio and media services provider, with a market capitalization of $64.8 billion, is benefiting from the continuous expansion of its subscription offerings, according to Zacks. In the second quarter of 2024, Spotify’s revenue climbed 20% year over year to EUR3.8 billion. The business is growing, Zacks says, thanks to net subscriber additions and strategic pricing: Spotify has raised prices in certain countries, including the U.S., while in developing markets, it generates more revenue through its free, ad-supported segment. In a much longer time frame, the company sees potential to convert these users into subscribers. Spotify stock is up more than 70% since the beginning of the year.
