Ever since the stock market bottomed out in the Great Recession of 2009, tech growth stocks have been the driving force on Wall Street. Historically low lending rates, coupled with the Federal Reserve’s quantitative easing program, have created a rich pool of cheap capital that growth-minded companies use to fuel their expansion.
But it came to an abrupt end almost exactly one year ago. Today, technology is a lagging sector and so far this year he’s down 30%. While much of the wreckage is due to the collapse of speculative play, many solid tech companies whose runways to growth remain undiminished have also gone bankrupt.
No one knows if we’ve hit a bottom or if there’s still plenty of room to fall below stock prices, but prudent investors can expect heavy losses in the broader market to thwart patient investors. creates the perfect conditions for building wealth. A market decline is always followed by a bull market rally and represents a great opportunity to pounce unless you need the money to pay your bills or for an emergency.
With so many tech bargains to be found, the following pair of growth stocks have the tools you need to make you richer in October and beyond.
Advanced Micro Devices
Advanced Micro Devices (AMD -13.87%) is one of the world’s largest semiconductor makers and has managed to avoid many of the chip shortages that plague the rest of the industry. Last year’s revenue climbed a staggering 68% to his $16.4 billion, allowing it to take more share from its biggest rival. intel (NASDAQ:INTC).
This is because AMD does not manufacture its own chips like Intel does, but relies on companies such as: Taiwan Semiconductor Manufacturing When global foundries to make them. And being a big buyer of chips, we’ve been able to secure our supply chain.
Midway through 2022, revenue is up 70% from last year, but while yesterday’s pre-announcement of Q3 earnings after the market closure was decidedly ugly, AMD still looks good for the future. It seems to be in position.
The market plunged stock prices after this news, which wasn’t all that surprising. We knew consumer spending could be soft, but what the report showed was weaker-than-expected PC sales and weaker client segment revenue. However, AMD’s enterprise-class customers continue to buy, and chips for data centers and embedded products used in the telecommunications industry continue to show great strength.
AMD’s stock price fell before the pre-announcement, and new losses have pushed the stock to even more attractive levels. As I write this, the stock is down 58% year-to-date. , Wall Street is likely to reset its 12-month consensus price target of $127 per share. It’s trading near $60.
Strong sales tailwinds behind its most important business segments, leadership in both the central processing unit and graphics markets, and market share gains in the virtual duopoly of data centers and servers have enabled Advanced Micro Devices remains a good long-term option. for your portfolio. There are many weaknesses right now, but patient investors may find the current price to be a bargain.
Considering NASDAQ 100 Tech Sector The index is down 36% year-to-date, duolingoof (DUOL -5.55%) An 8% drop isn’t too bad. However, Wall Street’s outlook is a bit more conservative than AMD’s, with a “only” 35% increase next year on the cap. However, Duolingo may be able to put these estimates to shame.
Duolingo, of course, is an education stock that exploded in popularity during the lockdown period of the pandemic. Because bored people stuck at home started learning a second language on their mobile phones. The app is free to download and all content is free to use as long as you don’t mind seeing ads along the way. Its freemium model lets you experience ad-free in-game enhancements for just a few dollars a month.
game? Yes, it is. Duolingo gamifies the language learning process, offering rewards and encouragement as you unlock your language achievements. According to SimilarWeb, during lockdown Duolingo was extremely popular and remains the top educational app today. check and the Rosetta Stone.
Duolingo has 49.5 million monthly active users, up 31% from last year, and 3.3 million paying subscribers. Second-quarter revenue increased 50% to $88.4 million, and management expects full-year revenue to reach his $364 million, up 45% year-over-year at the midpoint of guidance.
The market may be concerned about ad demand during a recession, but subscriptions account for almost 75% of revenue, and ads less than 13%. Duolingo is also looking to expand into new areas, and its tests are recognized as proof of proficiency by his over 3,000 international student admissions agencies. We made about $8 million in revenue from last quarter’s English tests.
With its freemium business model, Duolingo has the potential to grow its paying subscriber base and advertising business, allowing it to grow beyond Wall Street’s expectations.
Rich Duprey has no positions in any of the mentioned stocks. The Motley Fool’s US headquarters is located in and recommends Advanced Micro Devices, Intel and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Chegg, Intel’s Jan 2023 long call at $57.50 and Intel’s Jan 2023 short put option at $57.50. The Motley Fool’s U.S. headquarters has a disclosure policy.