Indeed, getting comfortable with the stock market’s rollercoaster ride comes with the territory for Wall Street investors. Over the past decade, the market oscillation between bear and bull markets has been a recurring theme driving investors wild with its unpredictable turns.
Notably, the growth-centric Nasdaq Composite (NASDAQINDEX: ^IXIC) has been on a wild ride recently. The index swooped down by 33% in the 2022 bear market, only to soar up by an impressive 53% since the inception of 2023. With the Nasdaq recently scaling past its November 2021 record-closing high, there’s no doubt it’s firmly entrenched in a fresh bull market.
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However, bull markets are not just about the rise; they also unravel opportunities for discerning investors. Despite market corrections being a natural part of the investment journey, it is the bull market rallies that eventually clean up these downward trends in major indexes, including the Nasdaq Composite. This presents a great window for long-term investors seeking out prime growth stocks.
Below are four standout growth stocks that are a must-have in the new Nasdaq bull market.
A promising growth stock that smart investors shouldn’t miss out on in the nascent Nasdaq bull market is the fintech giant PayPal Holdings (NASDAQ: PYPL). Despite facing stiff competition in the digital payment sphere, PayPal’s exceptional performance metrics and proficient management hint at its potential for sustainable long-term growth.
A standout is the substantial growth in total payment volume (TPV) processed across its networks, primarily PayPal and Venmo. Even during challenging times, PayPal’s TPV witnessed double-digit growth last year. This underscores the company’s growth potential as the economy expands and digital payment adoption surges.
Moreover, PayPal’s success in enhancing user engagement is noteworthy. Active accounts have shown a remarkable increase in the number of payments completed, boding well for the company’s gross profit trajectory in the coming years.
With the fintech sector still at its budding stage, there is ample room for growth, especially with estimates predicting a substantial rise in global fintech revenue. PayPal’s current leadership status in this domain positions it as a frontrunner for capturing this growth.
Notably, the appointment of CEO Alex Chriss, with his background in small business operations, brings a strategic edge to the company. Moreover, PayPal’s valuation at 11.5 times forward-year earnings presents an attractive entry point for investors.
Starbucks: Brewed to Perfection
Another gem in the basket of growth stocks that investors might regret not adding during the Nasdaq bull market surge is the coffee giant Starbucks (NASDAQ: SBUX). Despite concerns over rising coffee and labor costs, Starbucks’ strong brand and continuous innovations are poised to deliver attractive returns for patient investors.
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Key to Starbucks’ success lies in the loyalty of its customer base. The company has adeptly managed inflationary pressures by adjusting prices without compromising its customer base.
The robust rewards program further enhances Starbucks’ performance. With over 34.3 million active rewards members as of the end of 2023, the program not only boosts customer spending but also streamlines operations through mobile ordering, enhancing efficiency.
Starbucks’ focus on innovation is another key driver of its growth. From new drink and food offerings to revamped drive-thru experiences, the company’s strategic initiatives are designed to boost margins and enhance customer engagement.
Investors can benefit from Starbucks’ historically attractive valuation, with shares trading at less than 19 times forward-year earnings, presenting a discount compared to its average multiples over the past five years.
Intel: Firing on All Cylinders
A compelling growth stock that investors might rue not acquiring in the Nasdaq Composite’s ascent to new highs is semiconductor pioneer Intel (NASDAQ: INTC). Despite recent setbacks in its foundry operations, Intel’s strategic positioning suggests a promising future in the latter half of this decade.
Unveiling Intel’s Foundry Ambitions and Okta’s Cybersecurity Triumph
The Evolution of Intel’s Foundry Services
Intel, a titan in the tech world, is not just synonymous with CPUs anymore. The semiconductor behemoth is making waves with its bold foray into the foundry services segment. Building a chip fabrication business from scratch is no walk in the park, akin to crafting a masterpiece from raw clay. As the decade draws to a close, Intel stands poised to potentially claim the coveted title of the world’s No. 2 foundry. A metamorphosis of this scale is both awe-inspiring and indicative of the company’s pioneering spirit.
Intel’s Transformation into a Value Oasis
While Intel’s sales growth may not paint the picture of a traditional growth stock, a deeper dive unveils a hidden treasure trove for investors. The company’s earnings per share (EPS) is projected to skyrocket, set to more than quadruple by 2027, reaching an impressive $4.44. This monumental leap in value offers a golden opportunity for patient investors, akin to uncovering a diamond in the rough.
Okta: The Cybersecurity Cinderella Story
A narrative of resilience and triumph unfolds in the realm of cybersecurity with Okta, a rising star in the market. Despite a temporary setback due to a security breach, the company’s competitive edge remains unscathed, propelling it towards sustained double-digit growth in the foreseeable future. In a world plagued by data breaches, Okta’s services emerge as a beacon of security, akin to a knight guarding a castle against unseen foes.
Cybersecurity’s Indispensable Role in the Modern Era
The need for robust cybersecurity measures in today’s digital landscape is not up for debate. With cyber threats lurking at every corner, businesses are increasingly turning to specialized providers like Okta to shield their valuable data. The company’s cloud-native identity verification platform, powered by AI and machine learning, represents a formidable bulwark against malicious activities. It’s a modern-day shield, constantly adapting and learning from the battlefield it protects.
Okta’s Strategic Expansion and Forward Momentum
Okta’s strategic acquisition of Auth0, a move that opened the doors to a $30 billion market, marks a pivotal moment in its growth trajectory. This expansion not only fortifies its presence in the market but also paves the way for international outreach, essential for sustaining its impressive growth rates. Like adding a powerful chess piece to a winning strategy, Auth0’s integration amplifies Okta’s competitive advantage in the global chessboard of cybersecurity.
Investor’s Delight: The Promise of Growth
As Okta’s adjusted EPS is set to more than triple over the next four years, the company emerges as a beacon of promise for forward-thinking investors. With a projected EPS of $5.20 on the horizon, investing in Okta today may very well be akin to striking gold in a mine of hidden opportunities.
Exploring New Avenues for Investment
The world of investment is a maze filled with hidden treasures waiting to be discovered. Stalwart companies like Intel and rising stars like Okta shed light on the uncharted territories of growth and innovation. With each passing year, the landscape of markets evolves, presenting new avenues for astute investors to explore, much like intrepid adventurers seeking fabled riches in uncharted lands.
Sean Williams has positions in Intel and PayPal. The Motley Fool has positions in and recommends Advanced Micro Devices, Intuit, Nvidia, Okta, PayPal, and Starbucks. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, short March 2024 $67.50 calls on PayPal, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
