Tech stocks are becoming a hot topic once again after the emergence of generative AI platform ChatGPT earlier this year.

Indeed, 2022 proved challenging for tech stocks. Most companies in the technology sector battled a wide range of headwinds. Many of these headwinds were caused directly or indirectly by soaring inflation and a series of interest rate hikes. Accordingly, it’s no surprise to see that market sentiment has cooled, causing many investors to become increasingly cautious about allocating their capital toward tech stocks.

Inflation was a particular concern for the tech industry, given its potential to erode the purchasing power of consumers and businesses alike. This could reduce demand for tech products and services, ultimately impacting tech companies’ bottom lines.

Additionally, the rapid interest rate hikes which have continued into 2023 have compounded the issue. Higher interest rates makes it more expensive for tech firms to borrow capital. That constrains their ability to invest in research and development, or other growth initiatives.

However, this year is a different story. Tech stocks continue to see healthy gains this year due to the broader trends in the growth of artificial intelligence and other technologies. At the same time, the markets are also reacting favorably to the potential of smaller rate hikes later this year.

As a result, if you are looking for tech stocks to buy, this is the right article for you. The names on this list are great additions to any portfolio. What makes them even better is that they are undervalued versus their growth potential. That means now is the time to snap these stocks up at a discount.

Twilio (TWLO)

Twilio (NYSE:TWLO) provides tools to assist its clients in enhancing their communication with customers. Its offerings include automated text messages for appointment confirmations, video call setups, and other tools to reduce customer acquisition expenses. Nevertheless, the company’s growth-oriented strategy is scary for casual investors.

Despite going public in 2015, Twilio has yet to generate any profits. With growth slowing down, the company’s management team recently shifted its focus toward profitability. However, the market has not received this transition well, and the company is currently facing a challenging situation.

To achieve its goal of profitability, Twilio has undergone two rounds of layoffs, resulting in a reduction of 11% of its workforce in September 2022 followed by an additional 17% cut in February. That said, Twilio’s management team has estimated non-GAAP operating profits of around $300 million for 2023, largely as a result of these cost-cutting measures.

It’s important to note that in its latest quarterly report, Twilio achieved revenue growth of more than 21%, while also narrowing its net losses. As a result, Wall Street was pleased with the outcome, marking the third consecutive earnings beat for this communications company.

Nevertheless, the stock trades at approximately 3.1-times price-to-sales. The markets are in an unforgiving mood right now. And the latest banking crisis means they are in no mood to play with fire. That is why conservative investors continue to ignore Twilio. But that does not mean you need to do so as well.

Adyen (ADYEY)

Adyen (OTCMKTS:ADYEY) is a Dutch payment processing services company. Although not a household name, it competes with well-known players in the payment processing industry. Despite the stiff competition, Adyen has experienced remarkable growth.

Adyen’s business model is based on providing frictionless payment processing solutions to merchants of all sizes. The company’s platform is built to be integrated with various payment methods and currencies. That makes it easy for merchants to accept payments from customers across the globe.

One of Adyen’s notable clients is Netflix (NASDAQ:NFLX), which uses its payment processing platform to support its subscription-based business model. Adyen’s platform has also been adopted by notable names such as Uber (NYSE:UBER), Spotify, and Etsy.

During the latter half of 2022, Adyen’s payment processing volume increased by 41%, reaching €421.7 billion, equivalent to roughly $445 billion. For comparison, PayPal (NASDAQ:PYPL) processed a similar volume of around $555 billion during the same period. While Adyen’s focus has been on the Europe, Middle East, and Africa (AMEA) region, it has rapidly expanded into other markets.

Despite the competition from established players, Adyen’s growth has been impressive, partly thanks to its ability to provide a seamless and flexible payment processing platform. Furthermore, Adyen’s value-added services, including fraud detection and prevention, data analytics, and payment optimization, have helped the company stand out in a crowded market.

Adyen is well-positioned to continue its growth trajectory thanks to its robust platform, expanding footprint, and commitment to innovation. As the digital payments industry evolves, Adyen’s flexibility and ability to adapt to new trends and challenges will be crucial to its success.

Avnet (AVT)

Avnet (NASDAQ:AVT) is a company executing silently in an unexciting industry, which has kept it out of the spotlight for many stock investors. However, the company’s steady performance and reliable revenue stream make it an attractive choice for those looking for a sleeper hit among tech stocks to buy.

Avnet offers a range of services in the electronics industry. Its offerings include logistics solutions, distribution, and design support for electronic components. With over 283 billion units shipped annually and a workforce of 15,300, Avnet is a major player in the industry.

Avnet’s position in the supply chain is a significant factor in its appeal to investors. As an intermediary between component manufacturers and end customers, the company enjoys a consistent revenue stream less affected by market fluctuations.

While Avnet may not be the most exciting investment opportunity, it’s stable. Consequently, that makes it an attractive option for investors looking for new tech stocks to buy.

Avnet’s stable position in the market has enabled it to continue growing despite the challenging circumstances. Over the past four quarters, it has consistently exceeded Wall Street’s expectations. Most recently, the company delivered earnings and revenue growth of over 75% and 14%, respectively.

In summary, Avnet’s position in the electronics industry as a supply chain and logistics services, distribution, and design support provider for electronic components has made it a stable player in the market.

Shares are trading at just 5.3-times on a price-to-earnings basis. Among tech stocks to buy, this is a bargain basement valuation for a tried-and-tested performer.

On the publication date, Faizan Farooque did not hold (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.