The Nvidia share price has had a very strong 12 months. It has more than doubled over that time. Few UK shares could emulate such a performance, especially UK growth shares, which have, in the recovery from the pandemic, been overshadowed by lowly rated value shares.
Nonetheless, I think this often overlooked UK tech stock could have an amazing 2022. It could even, in my opinion, earn investors a bigger overall return than Nvidia in 2022.
Outperforming Nvidia
The stock I’m thinking of is GB Group (LSE: GBG). It provides global digital identity and location services. That helps organisations validate and verify the identity and location of their customers. In a digital age, it’s very well placed to keep growing.
The most recent half-year results showed a 5.4% improvement in revenue to £109.2m. Its organic revenue at constant currency was ahead 12.6% at £108.7m.
It aims to be a global leader in its field and analysts seem confident. Barclays has set a target price of 1,000p for the company, compared to the GB Group share price of 729p at the time of writing.
The recent fall in the share price, I think, makes buying the shares all the more tempting. That’s especially as GB Group remains a growth share, despite its recent slowdown in revenue growth. When looking at its growth year-on-year, it’s in an attractive niche that also pays a dividend.
But the shares are expensive. As such, any slowdown in growth could see the share price slide. As with all tech, it’s reliant on innovation in a very competitive industry. There’s always a risk that newer and better technologies from rivals could undermine the company’s appeal and new competitors could emerge. That could potentially hurting margins.
Another strong tech stock
Electrocomponents (LSE: ECM) is another under-the-radar share I really like. I owned some of the shares many moons ago, but recent results have once again caught my eye. The latest interim results showed like-for-like revenue growth of 31% year-on-year, or 22% versus two years ago, at the electrical products distributor.
It’s another company well positioned to grow as technology evolves, I feel. Electrocomponents has many strong customer partnerships. It says it has 1.2m customers in 32 countries, so it’s a serious global business and isn’t reliant on just a few companies for its revenues, as some other tech companies are. It has a long history too as it was founded in 1937.
Analysts at Berenberg raised their target price from 890p to 1,230p following the results, showing their view on its improving prospects. Electrocomponents isn’t flashy or well known so its share price growth is likely to be steady compared to some of the better known technology companies. However, overall I think it is a very good business, as shown by its revenue growth. I may add it to my own portfolio.
Of course, there’s no knowing if GB Group will do better than Nvidia in 2022. No investor has a crystal ball. The point isn’t to say that Nvidia can’t also be a very profitable investment, it’s an exciting company. However, I prefer GB Group with its lower P/E ratio and because it’s not involved in the under-pressure computer chip production industry.
Overall, I just think GB Group has a lot of potential, could be set for a fantastic 2022 and I’m very much considering buying the shares.
