The Nasdaq Composite Index dropped 33% year to date, wiping out the pandemic-inflated prices of tech stocks. The popular FAANG (Facebook, Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Netflix, and Google, which is owned by Alphabet) stocks of the 2020 decade are losing their charm. The new decade of 2030 brings trends like the cloud, electric vehicles (EVs), artificial intelligence (AI), and secure edge devices.
The Nasdaq bear market has created a golden opportunity to buy into the new growth trend with these five sensational stocks, a group I refer to as ANTAM. Constellation Research principal analyst & founder Ray Wang coined the term MATANA by adding the Alphabet to the mix.
Nasdaq stocks to buy in the downturn
Nasdaq is known for its tech-heavy stock index and has significantly outperformed the S&P 500 Index in the 2020 digital age. You will regret not buying into the next growth phase of Nasdaq: the AI age.
Apple
Apple, one of the stocks behind Warren Buffett’s wealth, is down 21% year to date amid the tech meltdown. Worldwide PC and mobile shipments have declined significantly, as many people bought ahead in the 2020 pandemic. The demand weakness has impacted Apple as well. But this is just cyclical, and demand will revive with tech upgrades. This demand weakness gives Apple time to tackle Joe Biden’s chip bans that restrict Apple from using Chinese memory chips.
Apple still has brand loyalty in edge devices like PCs, laptops, mobiles, and smartwatches. It is developing Apple cars, too. However, it remains to be seen how loyal customers take Apple’s entry into automotive. But Apple still has what it takes to be relevant in the future hardware and operating system (OS), making it a stock to buy the dip.
Nvidia
AI chipmaker Nvidia (NASDAQ: NVDA) is down 60% due to the crypto bubble burst, weak PC shipments, and the United States-China trade war directly impacting its earnings. The company expects a 17% revenue dip in the third quarter, plus a US$400 million hit from the AI chip export ban to China. But Nvidia has US$7 billion net cash to take more such hits and still invest in research and development to maintain its technical prowess.
Nvidia’s strength is its most advanced graphics cards that fetch a premium amount. The company is well placed to shape the next-gen AI, autonomous vehicles (AVs), and supercomputers, making its stock a buy at every dip.
Tesla: A name that needs no introduction
Tesla (NASDAQ: TSLA) shares are what made Elon Musk the world’s richest man. Now, Musk is buying Twitter. But what makes Tesla attractive is its 360-degree approach to tapping the EV revolution. Many think Tesla is an EV maker, but it also makes EV batteries, EV charging stations, energy to power EVs and is investing in lithium mining.
Biden’s policies work well for Tesla. The Inflation Reduction Act extends the US$7,500 tax credit for buying a new EV to 2032. Tesla’s EVs qualify for this credit, while 70% of other EVs don’t because they fail to meet one condition for the tax credit. The credit is only available to passenger vehicles sourced and assembled in North America.
The supply chain constraints restrict Tesla’s revenue growth, and a recession could pull down EV demand in the short term. But the EV trend will return, and Tesla will be standing there, welcoming it with both arms.
Amazon and Microsoft: The veterans
Amazon and Microsoft (NASDAQ: MSFT) have made many investors wealthy in the 2020 decade by changing the way companies work, leading the way to software-as-a-service (SaaS). The biggest public clouds, Microsoft Azure and Amazon Web Services, power several software companies. The 5G infrastructure will bring a new opportunity for the cloud. This fifth-generation communication technology will connect millions of edge devices to the cloud through low-latency, high-speed internet that can support AI applications.
While Amazon has e-commerce and Microsoft has Office 365 and Surface laptops, their cloud businesses make them Nasdaq veterans. The two stocks have dipped more than 28%, creating an opportunity to buy the dip.
Bottom line
You can buy the above five Nasdaq stocks through your Tax-Free Savings Account and book your seat in the 2030 millionaire club.
