When the curtain finally closes in 2022, it will undoubtedly end as one of the most difficult years for investors in decades.of S&P 500It is often regarded as the best indicator of stock market health.
The Tech Equity-Driven Landscape Is Getting Worse NASDAQ Composite (^IXIC -3.08%)The index, which is responsible for propelling the broader market to new highs, plunged 34% by October 10, 2022. This puts the Nasdaq firmly in a bear market grip.
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But amidst all this chaos, there is good news. Historically, all of his double-digit declines in major US stock indices, including the Nasdaq, were ultimately backfired by the bull market rally. This makes every bear market a solid buying opportunity for the patient investor.
It’s a particularly wise time to consider buying some of the beaten-down growth stocks whose innovation will shape the future. Below are five giant growth stocks you regret not buying during the Nasdaq bear market dip.
visa
If investors don’t buy during the Nasdaq bear market, the first great growth stocks that will have investors scratching their heads are payment processors. visa (V -1.10%)Visa is cyclical and all signs point to slowing US and global growth, but this is a company with both numbers and competitive advantage.
Cyclical stocks like Visa are prone to weakness when consumer and business spending slows, but it’s important to realize that contractions don’t last very long. By comparison, economic expansions are most often measured in years. Buying and holding a payment powerhouse like Visa allows long-term investors to take advantage of disproportionately long term expansion.
Visa opportunities abound, both domestically and internationally. This is the company that controlled 54% of US credit card network purchase volume in 2020. The United States is the world’s largest consumer market. We also have the ability to organically or acquirively expand our payment networks into under-banked areas of the world. With most global transactions still being done in cash, Visa has a decades-long runway of growth to say the least.
Another reason for Visa’s success is management’s prudent financial management. Visa acts strictly as a payment processor and avoids lending. By doing so, you avoid loan delinquencies and inevitable write-offs that occur during economic downturns and recessions. Not having to secure capital is a major advantage that helps Visa bounce back from recessions faster than most financial stocks.
broadcom
Semiconductor Solution Specialist broadcom (AVGO -2.48%) It’s the second great growth stock I regret not buying as the Nasdaq plummets. As semiconductor stocks battle fears of a cyclical recession, Broadcom has a catalyst to ease this short-term pain.
Broadcom’s biggest catalyst, the 5G revolution, for example, should be well insulated from the possibility of a recession. It’s been almost a decade since telcos dramatically improved wireless download speeds. Given that wireless/smartphone access has practically evolved into a basic necessity, we should see a continuous device replacement cycle through the mid-decade. That’s good news for Broadcom, which makes most of its revenue from wireless chips and accessories found in next-generation smartphones.
Additionally, Broadcom could benefit from ancillary distribution channels. Due to the COVID-19 pandemic, businesses are migrating data online and to the cloud at an accelerated pace. Broadcom is a supplier of connectivity and access chips used in data centers. As more data moves to the cloud, the demand for connectivity and access chips increases.
Broadcom also posted a record backlog of $14.9 billion at the end of 2021. These orders should buffer operating cash flow in the event of a US or global economic recession.
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intuitive surgery
The third giant growth stock looking to buy during the Nasdaq bear market plunge is the developer of a robotic-assisted surgery system. intuitive surgery (ISRG -3.85%)At Intuitive Surgical, we’ve seen some optional surgeries postponed as a result of the COVID-19 pandemic, but given the company’s market share and operating model, it’s an easy buy.
By mid-2022, Intuitive Surgical has installed 7,135 da Vinci surgical systems in hospitals and surgical centers worldwide. That may not sound like a particularly big number, but it’s much more than any of our competitors.
With that in mind, these Da Vinci systems are expensive, often between $500,000 and $2.5 million. Given the cost to purchase these systems and the time-consuming training given to the surgeons who use them, hospitals and surgical centers are unlikely to switch to competitors once they purchase the da Vinci system.
But perhaps the best thing about Intuitive Surgical is its razor-and-blade operating model. In the “razor and blade” model, customers are hooked on a typically low-margin product (razor) with a high-margin replacement part (blade). For Intuitive Surgical, its da Vinci surgical systems are razors, and the instruments sold in each surgery and the services performed with these systems are blades. As more da Vinci systems are installed, the revenue pendulum is increasingly directed toward the company’s higher-margin channels.
Octa
Fourth fast-growing stock to regret not adding to Nasdaq bear market plunge is cybersecurity firm Octa (OKTA -4.45%)Okta’s final results failed to impress Wall Street, but the company’s long-term catalyst hasn’t changed.
At a macro level, cybersecurity has become an essential service for businesses of all sizes. Whether the stock market or the US economy is performing well or not, robots and hackers will always try to steal sensitive data. Having software in place to protect every aspect of that data has become paramount.
What makes Okta special is its cloud-native identity verification platform. Okta relies on machine learning software to streamline its ability to recognize and respond to potential threats. Okta is trying to prey on what it sees as an $80 billion addressable market with a cloud-native platform that should outperform on-premises identity verification solutions.
Perhaps the biggest game-changer for Okta is its $6.5 billion acquisition of Auth0, which it completed last year. Integration issues and combinatorial-related costs have compounded Okta’s losses over the last two quarters, but the Auth0 purchase, more importantly, has broadened the company’s international market reach. In addition, it will expand Okta’s potential customer pool and facilitate more cross-selling opportunities.
Amazon
Fifth Giant Growth Stock You’ll Regret Not Buying During Nasdaq Bear Market Is FAANG Stock Amazon (AMZN -5.00%)Despite concerns that a weakening US and global economy could affect the company’s online sales, Amazon’s truly important business segments continue to fire on all cylinders.
Most people are familiar with Amazon as it is the dominant online marketplace. According to his March 2022 report from eMarketer, Amazon should account for his 39.5% of US online retail sales this year. But even though retail sales make up the bulk of Amazon’s revenue, online retail is a low-margin segment.The real key to Amazon’s growth is its high-margin business segments.
For example, the popularity of Amazon’s marketplace has allowed the company to sign up over 200 million Prime members worldwide as of April 2021. This number could be even higher, especially with Amazon’s acquisition of exclusive rights. thursday night footballSubscription services grew the company’s annual run-rate segment to $35 billion.
Additionally, Amazon Web Services (AWS) is the world’s leading cloud infrastructure services provider.Cloud service margin rather Higher than online retail margins, the growth of cloud services is still in its early stages. Despite accounting for only one-sixth of Amazon’s net sales, AWS regularly generates more than half of the company’s operating income.
AWS, subscription services, and even advertising services are key to tripling Amazon’s operating cash flow over the next four years.
