Looking for the next big growth opportunities in technology? We’ve pinpointed three companies that will richly reward investors for years to come by embracing disruptive innovation. They’re introducing new products and services that are winning customers and shaking up Silicon Valley’s status quo.

Now get ready for a shock. Two of these companies are legacy firms IBM (NYSE: IBM) and Cisco Systems (NASDAQ: CSCO). We’ve also found a small-cap stock that fits the bill. Think of all three as “stealth disruptors.”

Let’s first look at IBM and Cisco, two veteran companies that are reinventing themselves in exciting ways that the investment herd doesn’t seem to notice.

FANG is losing its investment bite…

Hogging the tech sector spotlight are the Wall Street favorites dubbed “FANG” stocks by CNBC commentator James Cramer: Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Alphabet’s (NASDAQ: GOOG) Google.

But FANG stocks are overhyped and overvalued, with high expectations already baked into their share prices. For outsized potential that’s flying under the radar, you should ignore conventional wisdom and scoop up shares of undervalued IBM and Cisco.

Below, we also unveil a tiny, little-known stock that’s poised to become the next giant of the tech world. (We’ll get to this small-cap rocket in a second.)

One of the surest moneymaking methods is to invest in companies with disruptive technologies that are transforming customer behavior and business models. In the wake of technological disruption comes the destruction of the old order, which poses opportunities but also perils for investors.

If you pick the wrong disruptor, you can lose your shirt. But one way you can reap market-beating growth combined with safety is to buy the stocks of cash-rich blue chips that are integrating disruptive innovation within their existing structures.

The Power of “Innogration”

Jim Pearce, chief investment strategist of Personal Finance, our flagship publication, calls this process “innogration” (innovation plus integration).

Jim says innogration “mandates that tech companies complement their internal process of innovation with the integration of external resources to create a market leading product.”

That’s exactly what IBM and Cisco are doing, but the Silicon Valley hipsters habitually roll their eyes at any mention of these two mega-cap stalwarts. Many analysts view “Big Blue” and Cisco as dinosaurs floundering in the La Brea tar pits of technology, but this conception couldn’t be more wrong.

No respect, I tell ya…

In particular, IBM is the Rodney Dangerfield of technology stocks. It gets no… well, you know how the rest of the joke goes. But IBM is in the throes of a quiet revolution.

IBM recently opened its Bluemix Garage, an incubator for developers and entrepreneurial companies to build and scale enterprise apps. The facility is designed to function as an “innovation accelerator” to help the company find the next leading edge product. As a complement to these efforts, IBM recently forged a partnership with Apple to develop industry-specific business apps running on Apple’s highly flexible iOS operating system.

It’s part of IBM’s migration away from mainframes to value-added information technology and “big data” analytics. IBM has been methodically reinventing itself to focus on business apps, the Internet of Things, medical IT, and the cloud.

With a market cap of $152.51 billion, IBM is plowing its considerable resources into a strategic acquisitions, with the booming medical IT space as a top priority.

IBM recently paid $2.6 billion for Truven Health Analytics, a health care IT firm that possesses data on the expense and treatment of more than 300 million patients. To date, IBM has spent $4 billion on health care acquisitions.

IBM also bought The Weather Channel’s digital assets, including the channel’s business-to-business, mobile, and cloud-based properties, in a deal valued at more than $2 billion.

The Weather Channel’s mobile and web properties process seven times more volume than Google’s search engine and claims more than 80 million monthly users. That makes the channel’s data and access points extremely valuable IoT assets.

What’s more, IBM recently expanded its business services division by paying more than $200 million for San Francisco-based Bluewolf Group, which provides cloud consulting and implementation services. With this “innogrative” deal, IBM has now completed 10 cloud-related acquisitions, positioning the company for growing revenue in one of today’s hottest technology trends.

As IBM busily refashions itself as a major player in the cloud and medical technology, it nonetheless trades at a bargain valuation. The stock’s trailing 12-month price-to-earnings ratio (P/E) is only 13.07, compared to 20.9 for its industry.

The New Cisco Kid…

With a market cap of $151.54 billion, Cisco boasts a portfolio of cybersecurity products, a commanding presence in commercial information technology, and entrenched ties with the global defense establishment. The company also features a fortress-like balance sheet, di­versified and reliable revenue streams, and strong earnings prospects.

Cybercrime is a spreading global menace, as reflected this year by the electoral meddling of Russian-controlled trolls and hackers in support of President-elect Donald Trump. The biggest beneficiary of the cybercrime wave is Cisco, the leader in protecting both civilian and military organiza­tions from hostile digital attack. Cisco‘s routers and switches are pervasive in corporations, schools and government agencies worldwide, giving it a ready-made customer base for security products.

As with IBM, Cisco has been acquiring and integrating a wide variety of smaller innovators. Cisco recently bought Jasper Technologies, whose IoT platform allows companies to connect devices over wireless networks and then manage the data via its proprietary platform. Cisco also bought network-security firm Lancope, a provider of analytics software that monitors alterations in network traffic to predict and prevent cyber attacks.

The latest speculation on Wall Street is that Cisco is lining up to buy fast-growing cyber and data security company Imperva (NYSE: IMPV). In the meantime, Cisco recently paid $293 million for privately held cloud security provider CloudLock, to take the cloud fight directly to rival Oracle (NYSE: ORCL).

Cisco remains reasonably valued and now trades at a trailing P/E of only 14.29.

Make a fortune from the next iPhone…

Our in-house tech stock expert Jim Pearce has found an overlooked small-cap company that’s tapped into a technology as revolutionary as the iPhone.

In fact, Facebook founder and CEO Mark Zuckerberg is so impressed by this technology, he has boldly predicted: “This will become part of daily life for billions of people.”

This technology is spreading five-times faster than the iPhone and it’s poised to generate $150 billion within the next 48 months. Working quietly behind the scenes of this growth story is a tiny company that supplies the major components of this device to the likes of Microsoft (NYSE: MSFT), Facebook, and Alphabet’s Google. In exchange, this fledgling company commands an astronomical price, raking in about 1 of every 5 dollars the device generates.

This small-cap stock has set the table for exponential gains. Click here for the full details.

Today’s Mailbag

Regrets, I’ve had a few… In our previous issue, I asked readers to send me examples of moneymaking opportunities in technology that they missed. Here’s one rueful tale:

“In 2008, Google was down to about $350 a share. My broker suggested it was still a little high and urged me to wait until it dropped to $300. It never dropped, and I never bought it.” – Janis B.

Google parent Alphabet now trades at about $761. Here’s the lesson, Janis: always take a broker’s advice with a grain of salt.

Do you have a similar story to tell? Drop me a line at mailbag@investingdaily.com. — John Persinos