It’s been a tumultuous four years for Wall Street, with the Nasdaq Composite experiencing significant swings between bear and bull markets. In 2022, the Nasdaq Composite faced a 33% drop in value, marking it as the worst-performing major index. Despite a 43% gain the following year, the Nasdaq Composite has yet to reach a new all-time high, currently residing 4% below its November 2021 record close.
For savvy investors, this 26-month lull in the market presents a unique opportunity to acquire growth stocks, innovative companies, and industry leaders at a perceived discount.
PayPal Holdings: The first spectacular growth stock to consider is fintech leader PayPal Holdings (NASDAQ: PYPL). Positioned at the forefront of Wall Street’s burgeoning fintech trends, PayPal is set to capitalize on the projected six-fold growth in annual fintech revenue from $245 billion to $1.5 trillion by 2030. Despite recent challenges, PayPal’s user engagement remains robust, with active accounts experiencing an increase in transactions, contributing to higher gross profit. The appointment of Alex Chriss as CEO adds another layer of strategic leadership, making PayPal a compelling investment at its current valuation.
Lovesac: The second standout growth stock is furniture company Lovesac (NASDAQ: LOVE). Distinct from traditional furniture companies, Lovesac’s key differentiator lies in its unique and highly functional products, particularly the modular couches known as sactionals. With approximately 90% of net sales coming from sactionals, Lovesac has successfully targeted mid-to-high-earning consumers. Leveraging an omnichannel sales platform and a commitment to sustainability, Lovesac’s shares present an attractive investment opportunity, especially considering its historically low valuation.
Alibaba: The third remarkable growth stock to consider is China-based e-commerce giant Alibaba (NYSE: BABA). Positioned to benefit from the reopening of the Chinese economy after COVID-19 lockdowns, Alibaba holds a dominant position in the country’s online retail market. Beyond e-commerce, the company is making strides in cloud computing, presenting a diversified growth story. With a historically low valuation and substantial cash reserves, Alibaba emerges as an appealing long-term investment.
Starbucks: The fourth enticing growth stock is global coffee chain Starbucks (NASDAQ: SBUX). Positioned for growth amid the post-pandemic recovery, Starbucks boasts a vast global presence and a loyal customer base. The company’s adaptability during challenging times, evidenced by innovative changes to its drive-thru experience, showcases strong management. Despite higher labor expenses, Starbucks’ forward price-to-earnings ratio presents an attractive entry point, considering the company’s consistent brand loyalty and anticipated annualized earnings growth of nearly 17% over the next five years.
