In the world of technology, some stocks shine brighter than others, even amidst challenges and uncertainties. The article delves into the fascinating progression of three tech giants as they embark on remarkable turnarounds propelled by innovative strategies and cutting-edge technology. It has also led to the rise of turnaround stocks to buy.
The first is a social media behemoth with an astonishing 3.8 billion monthly active users. It is not merely a platform for connecting people but a robust ecosystem for advertisers. With a roadmap brimming with AI-driven solutions and a strategic focus on the Metaverse, it is rewriting the rules of engagement.
The second one is a pioneer in the semiconductor industry. It democratizes AI and reshapes the global supply chain with Intel Foundry Services. Its focus on advanced manufacturing and AI integration positions it as a vital player in shaping the future.
The third’s meteoric rise in branded checkout volumes and forward-thinking innovations like “buy now, pay later” options underscore its adaptability in a changing landscape. As inflation rates cool, it is set to capitalize on the surge in digital payments, solidifying its position as a market leader.
The analysis explores how these turnaround stocks are bouncing back and emerging stronger than ever in a world of technological disruption.
Meta (META)
The tech conglomerate Meta (NASDAQ:META) boasts a staggering 3.8 billion monthly active users across its apps. This enormous user base is a goldmine for advertisers and offers unparalleled reach and targeting capabilities.
With its three billion-strong user base, daily active users for Facebook continue to grow globally, reinforcing the platform’s position as a leading social media network. High user engagement, with users spending more time on the platform, translates to increased opportunities for ad monetization.
For the future, Meta has an exciting roadmap ahead, featuring products like Threads, Reels, Llama 2, and AI-driven solutions. Threads, in particular, have shown impressive early growth. Meta’s investments in AI are reaping the rewards, with AI-driven content recommendations becoming a key driver of engagement. Such recommendations have led to a 7% increase in overall time spent on the platform. This makes it one of those turnaround stocks.
Reels, powered by AI, is experiencing tremendous growth, with daily plays exceeding 200 billion across Facebook and Instagram. It contributes to a growing annual revenue run rate of over $10 billion. Meta Advantage, the suite of automated ads products, has nearly universal adoption among advertisers. It is showcasing the potential for AI-driven advertising to boost revenue.
Additionally, Meta’s focus on business messaging presents significant monetization opportunities. WhatsApp Business app’s 200 million users can now create Click-to-WhatsApp ads for Facebook and Instagram. It facilitates business growth, especially in markets where WhatsApp is the first step for businesses to go online. The adoption of paid messaging products has doubled YoY, highlighting the revenue potential in this segment.
Finally, Meta is strategically positioned to capitalize on the emerging Metaverse trend. The Quest 3 mixed reality headset represents a significant step in bringing mixed reality experiences to a mainstream audience. Hence, it may potentially be attracting millions of users to the Metaverse.
Intel (INTC)
Intel (NASDAQ:INTC) aims to democratize AI by providing a full silicon and software IP suite, making AI accessible across various workloads and usage models. This strategy aligns with Intel’s vision of AI being one of its five “superpowers,” driving a $1 trillion semiconductor industry by 2030.
Notably, IFS expands Intel’s scale and capacity while also providing choices to customers outside of Asia. It plays a significant role in Intel’s IDM 2.0 strategy, focusing on advanced manufacturing. The geopolitical tensions underline the importance of a diversified semiconductor supply chain, reinforcing Intel’s strategic positioning.
Fundamentally, Intel’s strategic investments in manufacturing capacity are central to its IDM 2.0 strategy. The company plans to build advanced semiconductor facilities in Germany and a new assembling and testing facility in Poland. Intel’s commitment to advanced semiconductor nodes is a vital catalyst. The company is on track to launch key nodes, including Intel 4, Intel 3, Intel 20A, and Intel 18A.
Looking forward, Intel sees AI in the PC market as a critical growth driver, comparable to the significance of Centrino and Wi-Fi in the early 2000s. Meteor Lake, built on Intel 4 with integrated AI capabilities, is expected to contribute to this growth. Intel’s Data Center Group (DCG) continues to experience strong customer demand, particularly for its 4th Gen Xeon Scalable processors.
Although the first half of 2023 saw a contraction in data center CPU TAM, Intel remains confident in its prospects. The company anticipates AI to expand the total addressable market (TAM) for server CPUs, with its product portfolio well-positioned for 2024 and beyond.
Lastly, Intel strategically exits businesses, such as the Next Unit of Computing (NUC), while maintaining partnerships like the one with ASUS (OTCMKTS:ASUUY). This demonstrates Intel’s focus on optimizing its portfolio and directing resources toward high-growth areas.
PayPal (PYPL)
PayPal’s (NASDAQ:PYPL) has experienced steady growth in branded checkout volumes, with growth rates exceeding initial estimates. For instance, in Q2 2023, PayPal’s branded checkout volumes grew nearly 6.5%, accelerating further to over 8% in July, the highest monthly growth rate since the pandemic’s onset. PayPal’s focus on three strategic priorities—branded checkout, merchant solutions, and digital wallets—is a pivotal growth catalyst.
In detail, branded checkout initiatives have contributed to noticeable improvements in key metrics, including accelerated growth rates. Innovations like “buy now, pay later” options and simplified checkout processes drive customer engagement and increase market share. Merchant solutions, including partnerships with leading tech companies and the rollout of high-margin services, demonstrate PayPal’s commitment to expanding its services and revenue streams. All in all it’s one of those turnaround stocks.
Developing differentiated wallet experiences across PayPal and Venmo reflects the company’s forward-looking approach. Also, PayPal understands that unique and scaled data sets are essential for leveraging the power of AI to provide actionable insights and differentiated value propositions to customers.
Furthermore, PayPal’s focus on innovation is evident in its emphasis on new product innovations and A/B testing. The company consistently delivers against its roadmap by scaling A/B testing and improving time to market. For instance, introducing pre-approved amounts for “buy now, pay later” has significantly accelerated traction. Additionally, innovations such as passkeys simplify the checkout log-in experience and enhance authorization rates, positioning PayPal ahead of competitors.
Finally, cooling core inflation rates is a noteworthy factor bolstering PayPal’s prospects. As inflation subsides, consumers are likely to experience increased discretionary spending. This development is crucial for PayPal, as it can expect a surge in e-commerce activity and digital payments. As a market leader in digital payments, PayPal is poised to capitalize on this trend. It’s the final reason it’s one of those turnaround stocks to buy.
As of this writing, Yiannis Zourmpanos held a long position in META, INTC, and PYPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
