The global economy’s momentum has slowed due to various factors like rising interest rates, the war in Ukraine and geopolitical tensions. The recent Israel-Hamas conflict adds more uncertainty. The IMF predicts global economic growth to be 2.9% in 2024, down from the previous forecast of 3% in July. Not even the breakout year enjoyed by tech stocks has been enough to push past the showdown. However, the global economy remains resilient as central banks raise interest rates cautiously to address inflation without causing a recession.
Even though there is an uncertain economy it seems that it is probable that we will come out of it. This makes it the perfect time to buy companies that are primed for a breakout.
Spotify Technology (SPOT)
Spotify Technology (NYSE:SPOT) is an audio streaming and media services provider. It is one of the largest music providers in the world with 551 million monthly users.
Spotify has seen an extremely strong year regarding revenue seeing profits of $13.14 billion. SPOT also saw its operating cash flow growth reached 22.81% which is much higher than the sector median of 3.07%. Spotify’s asset turnover is also measures at 1.69x. This indicates that Spotify uses its assets extremely well to turn a profit. This is further reinforced by the fact that SPOT’s stock is up 93% year-to-date.
Spotify differentiates itself from competition by being an innovator in the field. The introduction of music streaming directly led to a decline in piracy due to it making song access so easy. In addition, Spotify made it so one can listen to any song they desire for free, unlike its main competitor Apple Music. Spotify also has over 100,000 video podcasts which is the most out of any major music streaming platform. The music streaming giant has recently redesigned its app to be more intuitive and make it easier to view the details of the song or podcast you’re listening to which should lead to an increase in listeners.
ON Semiconductor (ON)
ON Semiconductor Corporation (NASDAQ:ON) is a leading semiconductor manufacturing company based in Arizona. With an emphasis on transportation, ON provides over 80,000 parts for intelligent power and sensory technologies globally. ON has seen great stock growth with a 51% increase year-to-date.
The company is placed in a very strong global semiconductor industry, which is forecast for large growth in the upcoming decade. In 2022, the industry faced a down year while still reeling in reported revenue of $591.8 billion globally. Further, that figure is projected to exponentially increase by 2032 with a future valuation of $1.88 trillion, marking a 12.28% nine-year CAGR for the industry as a whole between 2023-2032.
Overall, ON saw financial growth in every notable category during Q2 2023. To start, revenue landed at $2.09 billion, marking year-over-year increases. Net income and diluted EPS also were reported high at $576.6 million and $1.29 respectively, with both reaching year-over-year increases of more than 25%. This strong financial performance was headlined by strong automotive chip sales recently.
In the upcoming years, expect to see growth in profit due to major tailwinds, as well as a strong sector backing the stock as a whole. ON Semiconductor Corporation is slated for great commercial success and is a great stock to buy.
Paypal Holdings (PYPL)
Paypal Holdings (NASDAQ:PYPL) is an American multinational financial technology company. It operates an online payment system and supports online money transfers.
Paypal has seen a strong year financially seeing revenue rise from $27.51 billion in 2022 to $28.55 billion in 2023. This represents an increase of 3.77%. In addition, PYPL’s annual earnings went up by 50.48% from 2022-2023 seeing it rise from $3.36 billion to $5.06 billion. In addition, PYPL also saw its cash from operations reach $4.32 billion. Overall, these metrics indicate that Paypal is doing well financially and is growing extremely fast making it very profitable.
Paypal has also added new policies and technologies such as buy now pay later, digital wallets, bill splitting and retail payment technology. PYPL also uses peer-to-peer banking which involves transactions processing directly between 2 people’s accounts rather than being channeled through a bank. This system was spearheaded by Paypal and allows transactions occur in mere minutes. The looming holiday spending surge is good news for Paypal. From November to January transactions are expected to rise significantly. This should correlate to PYPL’s stock drastically rising.
On the date of publication, Michael Que 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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
