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Nasdaq Correction: These 2 Safe Stocks Finally Look Like Bargains
The Motley Fool· 2025-03-12 10:30
In times of market turmoil -- like now -- two ideas in particular stand out: the need to own some "safe" stocks, or those that can hold up under pressure, and the opportunity to buy stocks, after declines, for a great price.Though the Nasdaq soared in the double digits over the past two years and even showed positive momentum in the first weeks of the year, recent times have been tougher. President Donald Trump announced tariffs on imports from Canada, China, and Mexico -- the U.S.'s biggest trading partner ...
Opinion: Warren Buffett Is Likely Buying These 2 Stocks During the Latest Nasdaq Sell-Off
The Motley Fool· 2025-03-12 09:15
Group 1: Market Context - The Nasdaq Composite Index has dropped 13% below its previous high, entering correction territory [1] - Many investors are exhibiting fear in the current market environment [1] Group 2: Investment Activities - Berkshire Hathaway initiated a new position in Domino's Pizza, acquiring approximately 1.28 million shares in Q3 2024 and an additional 1.1 million shares in the following quarter [3][4] - Domino's stock has declined roughly 10% from its peak this year, and its current share price is slightly below the average level since Q3 [4] - Domino's Pizza's board repurchased $112 million of its stock in Q4 2024 and has $814.3 million authorized for further buybacks [6] Group 3: Valuation and Investment Rationale - Domino's Pizza trades at a forward earnings multiple of 25.5, which is considered high, but Buffett has previously invested in high-quality businesses with solid growth prospects [5] - Sirius XM Holdings is viewed as a potential favorite for Buffett, with Berkshire owning 35.4% of the company and shares trading below 8x forward earnings [7] - Sirius XM has a price-to-earnings-to-growth (PEG) ratio of 0.66, indicating an attractive valuation [7] Group 4: Dividend and Cash Flow - Sirius XM offers a forward dividend yield of 4.53%, which is appealing to Buffett despite Berkshire not paying dividends [9] - Recent regulatory filings indicate that Buffett has been buying shares of Sirius XM in 2025 [10] Group 5: Investment Strategy - While Buffett is likely purchasing shares of Domino's Pizza and Sirius XM, it is suggested that he is not overly aggressive in deploying Berkshire's cash reserves [11] - Overall stock valuations remain high, and Buffett may wait for more significant market fear before making larger investments [12]
The Nasdaq Correction Was No Surprise for Warren Buffett: Here's His Strategy
The Motley Fool· 2025-03-12 08:43
Although Warren Buffett can't predict the future, he almost certainly wasn't surprised by the Nasdaq Composite (^IXIC -0.18%) falling into correction territory. In fact, based on the investment decisions he and his team have been making at Berkshire Hathaway (BRK.A -0.03%) (BRK.B -0.17%), it seems likely that he was rather expecting something like this to happen at some point. But the real takeaway for investors from the correction and from Buffett is much bigger than just a few months of stock performance. ...
Tech Sell-Off: 1 Artificial Intelligence (AI) Stock Down 26% to Buy Now and Hold for 6 Years
The Motley Fool· 2025-03-12 08:37
Company Overview - CrowdStrike Holdings is a leader in artificial intelligence-powered cybersecurity, offering an all-in-one solution through its Falcon platform, which includes 29 modules for comprehensive protection [5][6] - The company has shown resilience despite a significant outage in July 2022, which affected 8.5 million customer computers, leading to initial investor concerns about potential revenue loss [4][9] Financial Performance - For fiscal 2025, CrowdStrike reported a revenue of $3.95 billion, a 29% increase from the previous year, exceeding its revised forecast of $3.9 billion [10] - The company aims to achieve $10 billion in annual recurring revenue (ARR) by fiscal 2031, representing a potential growth of 138% from its fiscal 2025 ARR of $4.2 billion [11] Market Position and Valuation - CrowdStrike's stock trades at a price-to-sales (P/S) ratio of 20.9, which is a 29% discount to its long-term average of 29.5, indicating potential value for long-term investors [12] - The company’s revenue growth of 25% in the most recent quarter outpaced competitors like Palo Alto Networks and Zscaler, justifying a premium valuation [13] Market Opportunity - Management estimates the addressable market for CrowdStrike at $116 billion, expecting it to more than double to $250 billion over the next four years, highlighting significant growth potential in the cybersecurity sector [15]
The Nasdaq Just Hit Correction Territory: 2 Brilliant AI Stocks to Buy Now and Hold Forever
The Motley Fool· 2025-03-12 08:21
Group 1: Nvidia - Nvidia reported a 78% increase in revenue to $39 billion in Q4, driven by strong demand for AI hardware in the data center segment [3] - Non-GAAP net income rose 71% to $0.89 per diluted share, although gross margin declined by 3 points [3] - Concerns about AI infrastructure spending have been alleviated, with DeepSeek's efficient training methods potentially increasing demand for Nvidia chips [4] - The durability of the AI boom positions Nvidia favorably, especially with the rise of physical AI technologies [5] - Nvidia's GPUs are the leading AI accelerators, supported by a robust software ecosystem, particularly the CUDA platform [6] - Despite a nearly 30% decline from its peak, Nvidia's stock is currently trading at 24 times forward earnings, the lowest valuation in the past year, making it attractive for patient investors [7] Group 2: Amazon - Amazon's total revenue increased by 10% to $187 billion in Q4, with GAAP net income rising 86% to $1.00 per diluted share [8] - The company is well-positioned in three growing industries: online retail, advertising, and cloud services, aiming to become the world's largest retailer by 2025 [9] - Morgan Stanley analysts view Amazon as an underappreciated leader in generative AI within retail and cloud services, expecting it to capture a larger share of consumer spending [10] - Amazon's stock has fallen 20% from its high, but adjusted earnings are projected to grow 14% in 2025, making the current valuation of 35 times adjusted earnings appear relatively expensive [11]
Nasdaq Correction: This Magnificent Stock Is a Rare Bargain
The Motley Fool· 2025-03-12 08:02
In recent years, investors showed their optimism about the future by flocking to high-growth stocks -- and that pushed the prices of some of these players into the stratosphere. The idea was these companies would benefit from a potentially lower interest-rate environment ahead, and, in many cases, the development of artificial intelligence (AI).And speaking of AI, companies connected to AI in particular stood out, their stocks advancing in the double and triple digits, helping fuel double-digit increases in ...
Nasdaq Sell-Off: 2 Pullback Stocks to Buy and Hold for a Decade
The Motley Fool· 2025-03-12 06:05
Group 1: Market Overview - The stock market has experienced a rocky start to 2025, with major market indexes declining due to concerns over President Trump's tariff policies potentially leading to a recession [1] - The tech-centric Nasdaq Composite has fallen more than 10% year to date [1] Group 2: Investment Opportunities - Market sell-offs can present opportunities to invest in strong companies that are currently underestimated [2] - Nvidia is highlighted as a leading supplier of chips for AI data centers, with its share price down 20% year to date, presenting an attractive buying opportunity [3][5] - Amazon is also recommended as a stock to buy on the dip, benefiting from its dominance in the $4 trillion e-commerce market and long-term growth in its cloud computing business [8] Group 3: Nvidia Insights - Nvidia's revenue doubled to $130 billion last year, with 88% from data center sales, indicating strong demand despite potential tariff impacts [5] - Nvidia offers a complete system of hardware and software for AI research, contributing to its dominant position in the data center market [6] - The current price-to-earnings (P/E) ratio for Nvidia is 24, compared to the S&P 500 average of 28, suggesting good value for investors [7] Group 4: Amazon Insights - Amazon has over 200 million Prime members, providing a strong customer base for its e-commerce platform [8] - Amazon Web Services (AWS) generated $115 billion in annualized revenue, contributing significantly to Amazon's operating profit [10] - Amazon's operating cash flow increased by 36% to $116 billion last year, indicating improved profitability [11] - The stock trades at 18 times trailing cash from operations per share, below its five-year average of 25, suggesting solid long-term value [12]
3 AI Chip Stocks to Buy in the Nasdaq Correction
The Motley Fool· 2025-03-12 05:55
The Nasdaq entered correction territory earlier this week, and a number of leading artificial intelligence (AI) semiconductor stocks have been swept up in the market downturn. However, spending on AI infrastructure has not suddenly dried up, and in fact it is still on the rise.The three big cloud computing companies, for example, have budgeted spending a combined $250 billion in capital expenditures (capex) this year largely related to AI infrastructure. Meanwhile, a group of companies led by OpenAI and Sof ...
Nasdaq Correction: 2 Top Stocks to Buy and Hold Forever
The Motley Fool· 2025-03-12 01:45
The Nasdaq Composite (^IXIC -0.18%) is officially in a correction, with the tech-heavy Nasdaq-100 index down about 12% from its recent high. And while there are some stocks that still look rather pricey, even after the downturn, there are some excellent bargains to be found for patient long-term investors.With that in mind, here are two "forever stocks" I own in my portfolio, both of which look attractive after dropping by 15% or more from their 2025 peaks.A second chance to get "Back to Starbucks"Starbucks ...
Nasdaq Correction: 2 Stocks Down 13% and 57% to Buy Now and Hold Forever
The Motley Fool· 2025-03-12 01:03
Core Viewpoint - The current market volatility presents a buying opportunity for certain stocks, particularly Costco Wholesale and SoFi Technologies, which are experiencing significant price adjustments despite their strong business fundamentals [2]. Costco Wholesale - Costco has shown reliable sales and income growth, with a 9% year-over-year increase in sales for the fiscal 2025 second quarter, driven by a 6.8% rise in comparable-store sales [4]. - E-commerce sales have surged by 21% in the same quarter, indicating a strong digital presence and growth in big and bulky item sales [4]. - Quarterly earnings per share rose from $3.92 to $4.02, supported by a loyal customer base and a recurring revenue stream from membership fees, which increased paid member households by 6.8% year over year [5]. - Despite a high P/E ratio exceeding 60, Costco's stock is currently trading at 55 times trailing-12-month earnings, reflecting market confidence in its long-term growth potential [6]. SoFi Technologies - SoFi, a tech-focused financial services company, reported a 27% year-over-year revenue increase in the 2024 fourth quarter, transitioning to a net income of $499 million from a loss of $301 million the previous year [7]. - The company is attracting millions of new customers, particularly young professionals, through its user-friendly digital platform that simplifies financial management [8]. - SoFi has diversified its offerings beyond lending, including bank accounts and investment tools, and has introduced unique services like a fund for investing in SpaceX [9]. - The financial services segment has seen an 84% year-over-year sales increase, with non-lending segments growing to represent 49% of total sales, alleviating pressure on the lending segment [10]. - SoFi's stock is currently 57% off its all-time high, trading at a forward P/E ratio of 23, suggesting potential for long-term investment despite inherent risks [11].