Nvidia and Microsoft: favored during the bear stock market
When bear stock markets occur, panic usually follows. Investors’ stress levels rise as the downward movement quickens because they are concerned about the economy, their jobs, and their finances. However, investors should specifically hunt for equities to buy during weak markets.
In all honesty, bear markets aren’t very often. The S&P 500’s long-term performance has a strong upward bias. Bear markets have thus historically always provided opportunities, despite the fact that they are frightening.
However, there are a few restrictions on that. The first is that larger indices, not necessarily specific equities, are included by the statement that bear markets “have historically always provided an opportunity.” Many stocks never return to their previous highs. The second caution is that we are unsure of the market’s bottoming date or the extent of its subsequent decline. There are a few obvious equities to buy, though, as investors wait for a bottom.
Networks Palo Alto on the stock market
Most industries are seeing weaker demand as businesses and individuals cut back on spending as a result of inflation, currency challenges, and recession fears. That hasn’t been the case with cybersecurity, though.
Palo Alto Networks (NASDAQ:PANW), a cybersecurity company, announced in August that its fiscal fourth quarter revenue and profitability were higher than anticipated. Billings increased by 44% to $2.7 billion while revenue increased by 27% annually to $1.55 billion. Additionally, management provided optimistic advice. They anticipated 25% revenue growth and the company would be profitable under GAAP for its newly begun fiscal 2023 year.
Customers are sticking with Palo Alto Networks for longer periods of time, according to management, despite growing macroeconomic uncertainty. Despite short-term instability, they also emphasized how many businesses continue to make long-term investments.
PANW stock has decreased 13% so far this year, trading at about $162. As I have stated, shares are inexpensive if they fall to $130 and would be a complete steal below $110.
Microsoft (NASDAQ:MSFT) was just listed on my list of blue-chip stocks to buy. In that post, I mentioned that the company’s operating margins were higher than those of all of the FAANG firms and that it is anticipated to produce double-digit percentage earnings and revenue growth every year from now through FY26.
Microsoft has experienced a peak-to-trough fall of 37% in the current bear market, reaching a low of $219.13 on October 13. Shares are currently back up to about $242.
Simply put, anytime a firm with a financial sheet as strong as Microsoft’s sees its share price drop by over 40%, I’m a buyer all day long. For long-term investors, I view $210 to $215 as an alluring “panic price” entry. However, you should think about going long whenever shares decline under $225.
The riskiest stock to buy right now is Nvidia (NASDAQ:NVDA), one of the three to do so before the bear market ends. The semiconductor company’s stock has fallen more than 57% year to date and 69% from peak to trough. That represents a significant decline for a business like Nvidia.
In the high-end semiconductor market, Nvidia is dominant. A wager on Nvidia is a wager on technology as a whole. Data centers, the cloud, AI, gaming, autonomous vehicles, robots, drones, supercomputing, graphics, and many other industries are among its end markets. Because of this, I am aware that the Nvidia stock rebound is a matter of “when,” not “if.”
The most recent earnings report from the corporation was not particularly optimistic because the outlook fell far short of expectations. Despite the strain on growth this year, a Piper Sandler analyst claimed that Nvidia’s company is close to bottoming out and that the stock is poised for a recovery. We must concur.