When you’re looking for stocks to buy there are so many things you can take into account, but starting with looking at the markets themselves is a good tactic.
With such a blistering performance in the benchmark indices throughout most of the post-pandemic months, it may have been inevitable that a correction would occur. Just like the real world, investor sentiment features a gravitational pull: nothing can go up forever. Having said that, not all indices have suffered equally, presenting a contrarian opportunity for certain stocks to buy.
While much attention was paid to the choppy nature of the S&P 500 heading into the new year, the technology-centric Nasdaq generated arguably the most concern among observers. For instance, while the former delivered a performance of half-a-percent below parity over the trailing month, the latter saw a 5.4% loss during the same frame. Therefore, if you’re looking for discount dive stocks to buy, the Nasdaq seems a good place to start.
Logically, there’s a reason why the tech-focused index has incurred more crimson ink than the S&P 500 and the Dow Jones Industrial Average, which happens to be up 1.3% in the trailing 30-day period.
With the Federal Reserve releasing its minutes of the Federal Open Market Committee, many analysts have interpreted the disclosure as a signal for an aggressively hawkish monetary policy. On paper, that bodes not so well for risk-on stocks to buy.
Obviously, many growth-oriented tech securities are tied to aspirational businesses, which usually don’t provide creature comforts like dividends. With the Fed likely to raise borrowing costs, this circumstance should then lead to an emphasis on stability and predictability. Like it or not, that would probably reduce sentiment for more speculative fare, leading to a valuation erosion for tech-focused stocks to buy.
Nevertheless, the economy may not thrive on everyone piling into financial or insurance securities. Instead, to compete in a global economy where nations like China are flexing their tech muscles, the U.S. may not have the luxury of sitting back. Therefore, if we continue to see volatility, these Nasdaq-listed stocks could make for excellent long-term opportunities.
- ASML (NASDAQ:ASML)
- Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL)
- Amazon (NASDAQ:AMZN)
- Lucid Group (NASDAQ:LCID)
- Intuit (NASDAQ:INTU)
- Nvidia (NASDAQ:NVDA)
- Smith & Wesson Brands (NASDAQ:SWBI)
- Alarm.com (NASDAQ:ALRM)
- CinCor Pharma (NASDAQ:CINC)
- Vroom (NASDAQ:VRM)
To be completely upfront, investors may want to consider waiting a bit before diving into these stocks to buy. Recently, one of our sister companies released a warning about an incoming correction. Therefore, the best approach may be to nibble a bit now but keep the powder keg dry for future discounts.
Nasdaq Stocks to Buy: ASML (ASML)
Over the trailing month, ASML shed nearly 6% of market value, signaling a possible corrective phase ahead. Moreover, between mid-September of last year to the close of the first week of 2022, shares tumbled 15%, dangerously close to what many analysts consider bear market territory. However, this might be one of the tech-based stocks to buy to consider acquiring now as opposed to waiting.
The main reason is that ASML specializes in the development and manufacturing of photolithography systems, which ultimately helps its enterprise-level clients to “mass produce patterns on silicon, allowing them to increase the value and lower the cost of a chip.”
A relevant business before the coronavirus pandemic, ASML has become intractably pertinent following the global health crisis.
It’s not just about the disrupted flow of semiconductors that makes ASML one of the best Nasdaq stocks to buy. Rather, as Fortune argued, the company’s photolithography machines make the firm a “strategic necessity for the world’s industrial superpowers.”
Alphabet (GOOG, GOOGL)
Over the trailing year, Alphabet delivered the goods, bringing to shareholders a handsome profit of nearly 52%. But in recent sessions, one of the go-to stocks to buy has struggled to maintain positive momentum.
GOOG is down nearly 8% during the past 30 days.
However, if you’re looking for stable and reliable Nasdaq-listed stocks to buy, GOOGL may be offering an enticing discount. Sure, it’s no longer the young upstart it once was but there’s plenty to like about Alphabet as investors get the jitters.
Mainly, the company is involved in myriad advanced projects, ranging from autonomous driving to artificial intelligence to quantum computers. As well, the company basically owns the internet. If people want to monetize their web-based content, you got to have a good relationship with Alphabet’s Google or good luck to you.
Nasdaq Stocks to Buy: Amazon (AMZN)
A commonly mentioned member of Nasdaq-listed stocks to buy, I’m going to be upfront and say that Amazon may be better approached with patience.
Yes, over the trailing six-month period, AMZN is down almost 13%, making it rather attractive for the discount-bin divers. However, it’s been trending inside a frustratingly horizontal trend channel since summer 2020.
The ho-hum nature of its performance suggests that it could tumble. Frankly, with the fervor for e-commerce dying down in favor of face-to-face transactions — a symptom of the retail revenge phenomenon stemming from mass cabin fever — I wouldn’t be surprised to see AMZN incur a deeper correction.
If that were to happen, though, I’d seriously consider scooping up the cheapened shares. Not only does Amazon seemingly dominate the e-everything space, its transition to clean transportation alternatives can make or break companies, depending on what side of the fence said firms are on. Simply, this is the kind of supremacy that’s incredibly difficult to usurp.
Lucid Group (LCID)
Speaking of alternative transportation, electric vehicles represented one of the hottest stocks to buy in 2021.
With the combination of an exciting technology and political tailwinds bolstering the segment, multiple new enterprises have blossomed. Even more conspicuous, their rise has challenged the nearly monopolistic hegemony of traditional automakers.
But now, we may be entering a time where we separate (if you’ll excuse this gendered common expression) the men from the boys. On a year-to-date basis, Lucid Group is up 2.6%. True, it’s just been a week in the new year so you don’t want to read too much into this. However, some of its closest competitors are down double digits over the same frame.
What then makes LCID so special? I’ve mentioned this many times before and I’ll say it again: the underlying company has the proper strategic focus. Despite technological advancements and enhanced economies of scale, EVs are still expensive to all but affluent households. Thus, Lucid is first going after the viable consumer demographic and addressing the modest-income demo later.
It might not be nice but it works.
Nasdaq Stocks to Buy: Intuit (INTU)
Fundamentally, I really dig Intuit as one of the long-term Nasdaq-listed stocks to buy. Right now, though, INTU is having a moment — and not a good one.
Over the trailing month, shares are down almost 16%. For the year (and yes, it’s only been a week, which is why I mention it), INTU has dropped slightly over 10%. Obviously, market jitters are having their way with the equity unit so waiting is probably the best approach.
But once it’s finished using the facilities, Intuit may enjoy an expanded addressable market. Primarily, those employees who have become used to the work-from-home initiative don’t want to lose key components of the gig worker’s lifestyle.
However, I’m not entirely sure if corporations want to pay for permanent telecommuting. Thus, we may see a broader transition to independent contractor work.
As you may know, the taxes for W2 employees are much different for 1099 contractors. Logically, Intuit’s products will be in higher demand, auguring well for INTU stock.
Another one of the Nasdaq-listed stocks to buy that are hurting right now, Nvidia could conceivably drop some more.
Still, the present discount is enticing, meaning that investors may want to nibble on some shares while waiting for a possibly bigger discount.
On a YTD basis, NVDA has dropped almost 10%. In the trailing month, it printed over 14% in the red. While I’m at it, since the end of November last year, the stock has dipped nearly 17%. So, we’re talking about near-bear-market territory, which naturally appeals to contrarian traders.
Depending on what happens to the cryptocurrency sector — which is badly hurting as I write this — NVDA could slip some more. But whatever happens over the new year, steep corrections should invite careful consideration of bullish discount diving.
When it comes to virtual currencies, I think the cat’s out of the bag. While cryptos could fall to sickening levels, they’ve already attracted massive interest. If you have a five-year time horizon, this is one of the Nasdaq-listed stocks to buy during these panicky times.
Smith & Wesson Brands (SWBI)
Since the start of the Covid-19 crisis, the world has witnessed the notable passing of groundbreakers and colorful personalities.
Thus, it was curious that the New York Times mentioned the death of Tom Metzger, a gentleman who advocated for extreme separatist policies.
Now, what was different about the time period — roughly the 1980s through early 1990s — when Metzger came to prominence was that American society did not have cancel culture.
Instead, it encouraged public debates so that certain ideas would cancel themselves out due to their ridiculousness. Or, society allowed discourse so that far superior ideas could repudiate and demoralize patently absurd ideologies.
Today, we have “trusted” entities like big tech to ostracize “wrong” opinions. Unfortunately, this creates a taboo fascination with extremist ideologies. In addition, it allows conspiracy theories to flourish, enabling hate mongers to corral suspicion into outright derision.
Ironically, censorship itself may have helped fuel the ugly political and ideological divide today. Can we back out of this madness? Maybe, but it might be time to consider Smith & Wesson Brands in your holster and SWBI in your portfolio.
Nasdaq Stocks to Buy: Alarm.com (ALRM)
I hate to be negative but as I mentioned just above, the world didn’t completely change for the better following the pandemic’s rude interruption.
Yeah, we get to work from home and all that jazz but if we can step outside our fantasy ecosystem of toxic positivity for a moment, Covid-19 brought significant ugliness to the forefront.
Sadly, I don’t have answers about how we can restore sanity to our society. But for now, I think it’s safe to say that things will worsen before they get better. As such, it’s time to consider stocks to buy that are levered to businesses involved in personal security.
Aside from firearms manufacturers which is always and inherently a controversial topic, investors may want to put Alarm.com on their radar. A cloud-based tech firm specializing in remote control, home automation and monitoring services, Alarm.com cynically enjoys a fundamental catalyst due to rising property crime.
Again, I’m fully aware that this idea stinks of cynicism but that doesn’t change the narrative that ALRM is one of the most relevant stocks to buy.
CinCor Pharma (CINC)
For the last two ideas for Nasdaq-listed stocks to buy, I’m going to shift the tone and the risk profile, beginning with CinCor Pharma.
One of the newest initial public offerings of 2022, CinCor is among three biotechnology-related IPOs that debuted on Friday, Jan. 7. I selected CinCor from the others mainly because I believe the company has the greatest chance for success.
As I mentioned in my IPO coverage for Benzinga, CinCor Pharma specializes in therapeutics for hypertension (high blood pressure). While HBP is typically an easily manageable condition, some patients are not able to control their blood pressure via standardly issued drugs. Therefore, CinCor seeks to address a critically unaddressed medical need.
Given the extensive history of HBP-related therapeutics, I find the probability of CinCor making a breakthrough higher than say a biotech aiming to cure cancer or a degenerative disease like Alzheimer’s. Still, this doesn’t mean CINC is a comfortable play, particularly because it’s a clinical-stage, pre-revenue biotech investment.
But if you’ve got some speculation funds to spare, you might want to add CINC to your list of Nasdaq stocks to buy.
Finally, I’m going to get into the riskiest name among stocks to buy with Vroom. As you may know from my prior coverage of Vroom, I haven’t been the most impressed regarding the online retailer of used vehicles. On paper, the initial fears of Covid-19 should have made VRM a blossoming bullish idea.
Instead, it’s a poor man’s Carvana (NYSE:CVNA). And I mean that quite literally: buying Vroom since its IPO has made you poorer, while you would have collected a handsome profit with Carvana over the same period — even with CVNA’s latest (and horrifying) woes.
So, why the change of heart on VRM? Well, I wouldn’t call it a change of heart because I’m honestly still skeptical. But as a risk-on trade, Vroom (and other auto retailers) benefits from the chipmaking paradigm shift. In short, semiconductor firms don’t want to make automotive-related chips because they’re high effort and low margin.
That being the case, the chip-shortage crisis can possibly last longer than many people anticipate, boding surprisingly well for VRM.
On the date of publication, Josh Enomoto did not have (either 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.