A couple of weeks ago, I posed a question to readers:

“Is the tech sector back?”

The reason I asked this question is because of the Ark Innovation ETF (ARKK). For those who don’t know, this is Cathie Wood’s flagship fund that was once the talk of Wall Street during the pandemic. ARKK is comprised of some of the (formerly) hottest tech names in the market.

As I explained in that piece, ARKK was showing signs of life — up 18% year to date at the time of that article’s publication. That outpaced the S&P 500 and the tech-heavy Nasdaq. But the fund sold off terribly over the past two years — and was still down by 75% when I wrote that article.

So where do we stand now? Let’s take a look…

Since I wrote that, ARKK has shot up even more and is now up 34% year-to-date. What is even more interesting is that the tech-heavy Nasdaq is now up 14% this year (compared to 5% a couple of weeks ago).

It’s starting to look like that was a prescient question. Tech may indeed be back. But before we take a victory lap, it’s important to remember that we just don’t know for sure. So we need to be cautious here.

That said, I think we can feel comfortable dipping our toes into the water. And if you agree with me, then I’m going to tell you about a lesser-known stock that you may want to consider…

An Off-The-Radar Tech Pick…

Most people have probably never heard of Rambus (Nasdaq: RMBS). It doesn’t get the name recognition that a Nvidia, IBM, AMD, or Qualcomm might. Yet, all those companies use Rambus’ technology…

Rambus is an under-the-radar technology company. Its business is to invent, patent, and license high-speed memory and chip interface technologies to other companies like the ones mentioned above.

What are high-speed memory and chip interface technologies? Well, these technologies improve the performance of computer systems by allowing data to be transferred more quickly between the processor and memory.

In other words, it makes communication between the computer’s brain and memory faster.

If you’ve ever heard of “DRAM”, or Dynamic Random Access Memory, this type of memory is used in computers. Rambus has developed and patented its own memory called “RDRAM.” The “R” stands for Rambus.

We don’t need to get into all the technicalities behind DRAM, but know this… RDRAM is 8 times faster than traditional DRAM. So, if you want to produce the fastest chips, you’ll use Rambus’ technology and pay them for it through licensing or royalties.

Key Numbers And Metrics

These licensing fees quickly add up for Rambus. In 2023, the company generated $454 million in revenue. Most of that revenue came from royalties and licensing fees. The remainder came from Rambus selling memory interface chips directly to DRAM manufacturers like Micron and Samsung.

Its memory interface chips segment is providing massive growth and momentum for Rambus.

For example, in 2019, this segment generated $73 million in revenue, and in 2021 it pulled in $144 million — a near 100% jump. This segment is showing no signs of slowing down, either. In 2022, it produced $227.1 million, up 58% year over year.

So, we know where Rambus’s growth (and momentum) is coming from.

Obviously, sales are only a fraction of the story.

If we flip the page over on the financials, we land on my favorite metric: cash flow.

Cash flow in 2021 checked in at $214 million, an 11% year-over-year improvement. Meh. But when the company reported its latest results, it set a record for cash from operations — $230.4 million for 2022.

Turning over to the balance sheet, you will find a company that maintains a rock-solid cash-to-debt ratio. It cut its debt in half between Q1 2022 and Q3 2022. Total debts now tally about $44 million. Cash on hand… $313 million.

And let me remind you that this stock bucked the trend last year, returning 22%, while many of its peers tumbled over 50%. That momentum has continued, and the stock is reaching new highs:

Action To Take

Should sales begin to slow down in its Semiconductor Space segment, I would expect the stock to take a hit. Also, if the company cannot develop and patent new technology, that would hinder future sales and hurt the stock.

With that said, RMBS comes in with strong momentum, and cash flow is rising. So if you’re looking for an off-the-radar-type pick, I think traders and investors alike could do well with this one.

In the meantime, over at my Capital Wealth Letter service, we just released our annual predictions for 2023 (and beyond). And what we uncovered may shock you…

Here is a taste of the predictions you’ll find in this year’s report:

• We predict the U.S. dollar will weaken in 2023, causing emerging markets to soar… It’s a reversal of last year. Last time we saw this setup, emerging markets jumped 79%.
• The world’s first cancer vaccine will be developed — and we know how to profit. The team behind this lifesaver will be able to name their price…
• A big prediction about the future of the U.S. EV industry…
• Driverless 18-wheeler trucks will hit the highways in 2023. (We have a handful of ways to profit from this one…)
• Psychedelic “magic mushroom” stocks will blow investors’ minds. I know it sounds crazy, but when you read how they treat depression… addiction… PTSD and more, you’ll see how these companies are about to hit paydirt.
• And more…

All we have to do is be in early on a couple of ideas before the rest of the crowd to make some truly spectacular returns. To learn more about my latest investment predictions for 2023, go here now.