by Ian Cooper
The market downturn has created some impressive opportunities.
In fact, we’ve found quite a few in growth stocks, where companies are expected to increase their profits at faster than average rates.
After all, “The flight from growth stocks makes for a great opportunity for investors to be greedy while others are fearful, as Warren Buffett famously implored investors to do. And over the longer-term, the pendulum still remains on the side of growth stocks despite their recent losses. Growth stocks have gained an average of 223% over the last decade, compared to 143% gains for value stocks,” according to Insider Monkey.
That being said, here are three top growth stocks to consider.
Block Inc. (SQ)
Block is a major name in the fintech space with an ecosystem of financial products. One of those products is the fast-growing Cash App, which is used to send and receive payments. It even offers other financial services, such as banking and trading. With it, Block is set up for substantial growth ahead.
Even more impressive, the company just posted solid earnings. In its most recent quarter, the company said gross profits grew 38% to $1.57 billion year over year. Gross profit from its Cash App was up 51% year over year to $774 million. And its Square seller business gross profit was up 29% to $783 million. Total net revenue grew 17% to $4.52 billion in the third quarter. Excluding Bitcoin revenue, total net revenue in the quarter increased 36% to $2.75 billion from the same period last year.
Advanced Micro Devices (AMD)
Shares of tech giant Advanced Micro Devices (AMD) were crushed this year.
After starting the year around $151, it sank to a low of about $57. All thanks to broad market weakness, inflation, fears of recession, price target cuts, plunging PC demand, you name it. That’s the bad news. The good news is the future looks far brighter for AMD.
For one, it appears the worst has been priced into the stock. And despite challenges, the company is still growing sales by double-digits.
Two, Warren Buffett’s Berkshire Hathaway just bought $4 billion worth of Taiwan Semiconductor. That news is adding to hopes the chip business is at or near a bottom.
And, as noted by Barron’s: “In particular, it’s a vote of confidence from a major investor that Taiwan Semiconductor isn’t under threat from a potential Chinese invasion of the self-governing island of Taiwan – and the knock-on effect that would have for its customers. The company is a major supplier to Advanced Micro Devices, Qualcomm, and Nvidia.”
Three, analysts seem to like the AMD stock on the pullback, too. UBS upgraded AMD to a buy rating, with a price target of $95 a share. Baird analyst Tristan Gerra also just upgraded the beaten-down tech name to outperform with a price target of $100. He believes the company’s newest Genoa chips could widen the company’s competitive moat.
Nvidia Corp. (NVDA)
We also expect to see big things from Nvidia (NASDAQ: NVDA) in the New Year.
For one, the company should continue to benefit from its massive push into virtual reality, the metaverse, and the company’s Omniverse. Two, billionaires like John Overdeck and David Siegel recently bought over 1.2 million shares of NVDA.
While NVDA had a rough outing in 2022, don’t write it off just yet. Remember, it’s still a leader when it comes to the cloud, artificial intelligence and machine learning, gaming, autonomous driving, supercomputing, robotics, drones and more.
Better, Baron Funds recently noted: “NVIDIA is powering the growth of AI from the data center to the edge. Shares detracted due to inventory right sizing in NVIDIA’s gaming segment coupled with the broader market sell-off in growth stocks. Given NVIDIA’s end-to-end AI platform and its leading market share in gaming, data centers, and autonomous machines, along with the size of these markets, we believe the company can sustain its growth trajectory.”
Recent Comments