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When scanning the investment landscape, it’s crucial to keep a keen eye on large-cap stocks that may have fallen out of favor. April 2024 presents us with a unique opportunity to explore undervalued large-cap stocks that have the potential to rise from the ashes.
In times of panic and fear, shrewd investors recognize the golden nuggets hiding beneath the surface. As investment legends like Sir John Templeton, Baron Rothschild, and Warren Buffett have previously emphasized, times of distress can pave the way for lucrative investment opportunities.
Furthermore, understanding technical indicators can provide valuable insights into market sentiment.
Take a look at Advanced Micro Devices (NASDAQ:AMD), for instance.
Whenever this stock experienced a dip in the past year, savvy investors could identify it as oversold by closely monitoring relative strength (RSI), Full Stochastics, and Williams’ %R. These indicators served as a signal for potential rebounds each time RSI or Full Stochastics dropped below the critical thresholds.
While leveraging fear and technical analysis doesn’t guarantee success in the large-cap arena, it equips investors with the tools to manage risk effectively.
Let’s delve into the world of underappreciated large-cap stocks that could prove to be hidden gems in April.
Adobe Systems (ADBE)
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Recently, Adobe (NASDAQ:ADBE) faced a downward gap due to weaker-than-expected quarterly revenue projections.
In its ongoing quarter, the company forecasts adjusted earnings per share of $4.35 to $4.40, slightly below analysts’ estimates. Additionally, revenue projections fall within the range of $5.25 billion to $5.30 billion, trailing the expected $5.31 billion mark.
However, viewing this setback as a buying opportunity may be prudent. The stock is currently oversold, perched on support levels dating back to October. Furthermore, key technical indicators like RSI, MACD, and Williams’ %R signal potential upward momentum. Barclays also sees pricing factors veiling the robustness within Creative Cloud, urging investors to capitalize on the dip, as reported by CNBC.
As noted by Seeking Alpha, “Adobe presents a significant opening to benefit from the prevailing pessimism following a slight miss in the Q2 2024 forecast.”
With the current price at $502.09, a potential move to refill the bearish gap around $568.88 followed by a retest of the $625 resistance level could be on the horizon.
Snowflake (SNOW)
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Another compelling under-the-radar pick for April is Snowflake (NYSE:SNOW), which recently plummeted from around $240 to a low of $160.52 per share.
This sharp decline was triggered by disappointing guidance and the departure of CEO Frank Slootman. However, much of the negativity appears to be priced into the stock, presenting a potential opportunity for discerning investors.
Key insiders are seizing this moment to buy into the dip. Company director Mark McLaughlin recently acquired 3,030 Snowflake shares at an average price of $165.45. The new CEO, Sridhar Ramaswamy, demonstrated confidence in the company’s future by investing $5 million in SNOW stock.
Highlighted in the latest quarterly call, the new CEO emphasized, “There’s no AI strategy without a data strategy,” underscoring the vast potential for Snowflake to tap into this sector. Guggenheim analysts upgraded SNOW to a neutral rating from sell, citing an “attractive” near-term prospect.
Advanced Micro Devices (AMD)
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Having retraced from $227.30, Advanced Micro Devices found a pillar of support at $183.34. The potential for AMD to revisit its previous highs remains, especially as it shows signs of being over-extended on RSI, Full Stochastics, and Williams’ %R, signaling further upside potential.
With a significant foothold in artificial intelligence, an industry projected to surpass $2 trillion by 2030, AMD recently launched its MI200X AI GPU, directly challenging Nvidia’s (NASDAQ:NVDA) offerings. Additionally, AMD is expanding into the AI-powered computing segment, which could significantly boost its revenue streams.
Bolstering its prospects, the improving PC market, where sales ticked up by 0.3% in the last quarter according to Gartner, further supports AMD’s growth trajectory.
Furthermore, analysts at Melius Research foresee another 20% upside potential for AMD, citing Microsoft’s supportive role and the expanding AI landscape. Their revised price target of $265, up from $192, reflects a bullish outlook on the stock.
As of the publication date, Ian Cooper disclosed no direct or indirect holdings in the mentioned securities. The writer’s opinions are in line with the InvestorPlace.com Publishing Guidelines.
Contributing to InvestorPlace.com since 1999, Ian Cooper offers insights into stocks and options.
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This article originally appeared on InvestorPlace and discusses the top undervalued large-cap stocks worth considering in April 2024.
The views expressed in this content reflect the writer’s perspective and do not necessarily align with Nasdaq, Inc.
