It’s not all bad out there. While bank failures and ongoing market volatility generate headlines, there are several stocks that have staged huge rallies to start the year. Many technology stocks that were badly beaten up in 2022 have gained more than 50% since the start of this year. While worries persist about inflation and the likelihood that interest rates will continue rising over the near-term, investors have been quietly piling into certain securities, leading to isolated breakouts that could result in some share prices skyrocketing in the coming weeks and months. To be sure, risks remain. But investors who know where to look can make money in the market right now. Here are three breakout stocks to buy before they skyrocket.
So far in 2023, the share price of semiconductor and microchip company Nvidia (NASDAQ:NVDA) has gained 77%. Considering that we’re only ten weeks into the year, that is an astounding gain in a relatively short period of time. Looking behind us, it appears that NVDA stock bottomed at $108 a share last October. Since then, the share price has more than doubled. And momentum seems to be gathering behind the chipmaker as its stock has gained 10% in the last month alone.
The breakout appears to have been fueled by several factors. Sentiment towards technology stocks has been improving after a brutal selloff through much of last year. Nvidia gave investors and analysts reasons for optimism with a fourth-quarter earnings print, delivered at the end of February, that beat expectations.
And Nvidia’s high-powered chips are seen as a key component needed to advance artificial intelligence and the chatbots that are transfixing the investment community. All this signals that NVDA stock is likely to continue rising.
Meta Platforms (META)
Facebook’s parent company, Meta Platforms (NASDAQ:META), is another tech stock that is breaking out after a tough downturn in 2022. In 2023, META stock has risen 58%, including a 14% gain over the past month. The share price is on the cusp of breaking above $200 and a new 52-week high looks within reach. Sentiment towards the company run by Mark Zuckerberg has improved dramatically from just a few months ago when analysts were disparaging the billions of dollars being allocated to the development of the metaverse.
Zuckerberg and his company have managed to win back analysts and investors by undertaking aggressive cost-cutting measures that have included laying off more than 20,000 employees. Zuckerberg has called 2023 Meta’s “year of efficiency,” which is winning applause along Wall Street.
On February 1, Meta Platforms also announced a $40 billion stock buyback program, which has also helped lift the share price. And, META stock is benefitting from threats by President Joe Biden to ban Chinese social media app TikTok, which is a key competitor of Meta Platforms.
Many professional analysts and traders on Wall Street are rooting for Amazon (NASDAQ:AMZN). Investment bank Goldman Sachs (NYSE:GS) recently named Amazon a “top pick” for the remainder of 2023. And JPMorgan Chase (NYSE:JPM) just reaffirmed its “overweight” (buy) rating on AMZN stock.
These firms believe that Amazon’s stock has been oversold and that its CEO, Andy Jassy, is righting the ship after announcing 18,000 job cuts and hitting pause on several infrastructure projects, including a second headquarters in Virginia.
While AMZN stock has not rallied as strongly as NVDA or META this year, there are signs of life at the e-commerce company. Amazon’s share price has risen 7% since the beginning of March and is now close to breaking above $100 a share for the first time since the start of February.
Amazon has also benefitted from a rotation out of bank stocks following the collapse of Silicon Valley Bank on March 10, and growing expectations that the Federal Reserve may now need to slow its pace of interest-rate increases.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.