The year’s first half was a memorable one for stock market investors. A brutal sell-off swept through global equities. It sent major stock indexes to new lows, again establishing the market’s volatility. The hit, influenced by inflation, happened across all industries. But, some felt the blow more than others. Hopes for a come-back for the stock market in the year’s second half seem a little dim. Instead, market watchers are expecting continued volatility.
Moreover, fears of a recession are mounting amid expectations of a violent hike cycle. The stock market is very unpredictable. Yet some wall street experts believe these stocks could ride the storms. According to the hopeful analysts, the listed companies have good characteristics. And that will make them emerge as potential top buys in the year’s second half.
ACM research (NASDAQ: ACMR) is a wafer designing equipment firm. ACM is gaining from the easing of lockdown in China. The company has a solid operational base in China. And has surpassed expectations in its second quarter report. Also, there were many positives from its earnings reports. Quinn Bolton (Needham) feels the company’s foray into China will only bring positives. He believes ACMR will still be able to market its products in non-China territories. Besides, lifting Covid restrictions means the company can increase its shipment. Bolton sees this as a significant future company stock price boost.
Shares of Amazon (NASDAQ: AMZN) have fallen 34% this year. Yet, Jefferies’s Brent Thill believes investors shouldn’t abandon the company’s stock. Thill expects a good second half for the e-commerce giant. He expects the stock to outperform by the end of the year, citing a myriad of positive catalysts for his paper. Including easier comparisons to last year’s performance. Strong growth in Amazon Web Services and discounts to multiples. E-commerce traffic has fallen on many retail platforms. Thill advises staying calm and taking advantage of “rare buying opportunities.” Especially if the stock remains on the edge of its range.
Bank of America recently named the denim company (NYSE: LEVI) a top pick for the year’s second half. They said in a recent report that “Levi’s has had no shortage of positive catalysts.” Analyst Christopher Nardone of Bank of America believes Levi’s has many growth engines. And they can “help navigate this challenging consumer environment.” The company’s store count continued to grow, and Nardone saw Levi gain market share. “Other growth drivers include achieving higher penetration. They also recently acquired Beyond Yoga,” the analyst added. Nardone praised Levi’s strong management. He said that the company is well-positioned to weather the economic storm. He said that it has an experienced team to do so.
Micron (NASDAQ: MU) is one of America’s biggest microchip firms. But, due to low-end demand, the company reduced its guidance. Yet Vijay Rakesh (Mizuho Securities) believes in the company’s long-term view. He said the company’s positioning would help it gain from temporal growth patterns. The patterns are a result of declines in both NAND and DRAM costs. Another contributing factor is the growth of several emerging techs in content. Rakesh re-echoed his belief in the firm’s long-term success with a Buy rating. But he reduces the price of the company’s stock by $11.
Nvidia (NASDAQ: NVDA) is a company specializing in the graphics design of processing units. The company works for the gaming industry. The company also produces chips for computer and car manufacturers.
Nvidia announced an update reducing its expectations for the second quarter of 2023. The announcement caused its stock price to reduce by 8%. Yet analysts still believe the company will ride the storm. Analysts believe the company’s balance sheet is better than most of its peers. As a result, Gill (Needham) believes it will sustain them through the current crises. Moreover, the demand for data centers keeps increasing (Nvidia’s major market). Hence the possibility of Nvidia’s stock growth is viable.
Take-Two Interactive Software
Video game producers and Take-Two interactive software (NASDAQ: TTWO) complete the list. The creators of Grand Theft Auto have great potential. Although, like many of its competitors, the company’s valuation has recently dropped. Yet, Brian Fitzgerald (Wells Fargo) retains it on his buy-list. Also, the company’s fiscal result for Q1 2023 was heartwarming. Take-Two recently acquired Zynga, a company producing mobile games. The acquisition is a big boost to its portfolio and will earn them profits. Brian is happy at the flawless integration of Zynga into the company’s operation. Directors at Take-Two predict $100 million in annual cost synergies in two years. The company now has the most formidable array of mobile games among competitors. Fitzgerald noted that this gives them lots of room for expansion. The second quarter looks promising, and Brian has a price target of $185 for the company.
Vimeo (NASDAQ: VMEO), a video-sharing platform, couldn’t break even in the last year. The company also had over 75% of its share price. Yet Brian Fitzgerald (Wells Fargo) believes in the company’s second quarter resurgence. Vimeo experienced slow-paced revenue growth in the second half of the year. But earnings before interest, taxes, depreciation, and amortization (EBITDA) should surpass earlier forecasts. Vimeo recently shifted its focus to maximizing its advertising spending. Brian believes the company is sure to experience positive earnings. That is before interest, taxes, depreciation, and amortization next year. Especially with such operational discipline. He sees the company’s present position as the worst it can ever achieve compared to future possibilities.
The stock market can be unpredictable most of the time. But, there are indications that there could be a bounce back in the second quarter. And lots of these stocks will likely make a decent profit. Besides, investors should be ready to make careful personal analyses before buying any stock. The analysis above is not a sign that the worst is over. The analysts have only drawn up conclusions based on available indices. The stock market is still volatile. Changes happen all the time, and the metrics could change. So, investors should consult experts before making these financial decisions.