2022 has been the year growth stocks received their comeuppance. It was a long-time coming, and even the most starry-eyed bulls would agree that some giveback was warranted. But this has been a massacre of a different order, echoing the horrors of the dot-com crash. Many high fliers are down 60% to 80%, far exceeding the depths plumbed during the March 2020 plunge.
But while risks remain, a few tickers are separating themselves from the pack. Relative strength accompanied their recent movements, and if they ever recapture the magic that previously propelled them to such lofty heights, well, large rewards are in store.
To increase the chances that one of these goes the distance, I selected a diversified list of growth stocks to buy now. One is a once-red-hot semiconductor on the verge of completing a bottoming pattern. Another is a communications platform that became a household name during the pandemic. The final one is a recent IPO that just celebrated its first birthday and provides exposure to gaming and the metaverse.
Zoom Video Communications (ZM)
Zoom Video Communications(NASDAQ:ZM) has fallen 87% from its high in one of the most epic reversals of fortune in history. Based on that stat alone, you would think the company’s earnings and sales have fallen off a cliff – but they haven’t!
The hypergrowth seen during the pandemic (five consecutive quarters of 100%+ revenue growth) is undoubtedly a thing of the past but Zoom is still growing – just at a slower pace. Buying now is based in part on the argument that the growth deceleration doesn’t justify the beating the stock has suffered
The recent quarterly report gave bulls hope after the company released better-than-expected earnings and an optimistic full-year forecast. The Street cheered the numbers, sending shares up 16% in after-hours trading. Up gaps after earnings have been a rarity this season, so it’s a differentiator for ZM stock.
We’ve seen strong follow-through in the days since the report, and Zoom shares are now back above the 50-day moving average for the first time this year. The improving technicals make ZM one of the better growth stocks to buy now.
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