ISRG

Intuitive Surgical, Inc.

192.40
USD
3.23%
192.40
USD
3.23%
184.94 369.69
52 weeks
52 weeks

Mkt Cap 68.73B

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Nasdaq Bear Market: 5 Brilliant Growth Stocks You'll Regret Not Buying on the Dip

This year has served as a reminder to both Wall Street and the investing community that stocks don't move up in a straight line. The first six months of 2022 saw the S&P 500 deliver its worst return in 52 years. Meanwhile, the growth-propelled Nasdaq Composite (NASDAQINDEX: ^IXIC) plunged as much as 34% from its record-closing high set in November 2021. You'll note by the magnitude of this decline that the widely followed Nasdaq entrenched itself firmly in a bear market. Although bear market declines can be unnerving, unpredictable, and test the resolve of investors, they're a perfectly normal part of the investing cycle and the ideal time for long-term investors to put their money to work. After all, each and every double-digit percentage decline in the major U.S. indexes, including the Nasdaq Composite, has eventually been recouped (and some) by a bull market rally. The current bear market is an especially smart time to scoop up growth stocks at a sizable discount. What follows are five brilliant growth stocks you'll regret not buying during the Nasdaq bear market dip. PayPal Holdings The first phenomenal growth stock that investors are liable to kick themselves over if they miss on this Nasdaq bear market dip is fintech specialist PayPal Holdings (NASDAQ: PYPL). Though historically high inflation is disproportionately hurting low earners at the moment, which could lessen activity on PayPal's digital payment platforms, the company's long-term growth potential remains unchanged. PayPal finds itself at the center of the digital payment revolution. According to a report from The Insight Partners, the digital payment industry is forecast to grow by a compound annual rate of more than 15% through 2028. PayPal has the potential to blow these figures out of the water. Total payment volume on its platform grew 13% on a constant-currency basis during a second quarter that saw inflation hit a four-decade high and U.S. gross domestic product decline 0.9%. Imagine what PayPal can do during the long-winded periods the U.S. economy is expanding. What's been truly impressive is the engagement PayPal has been able to get out of its active users. When 2020 came to a close, active users were completing an average of 40.9 transactions over the trailing-12-month (ttm) period. As of June 30, 2022, this was up to an average of 48.7 transactions per active user of in the ttm. Since PayPal is predominantly a fee-driven business, increasing engagement should drive profits steadily higher. With many regions of the world still underbanked, the addressable market for digital payments is enormous. Intuitive Surgical A second stellar growth stock that investors will regret not picking up during the Nasdaq bear market dip is robotic-assisted surgical systems company Intuitive Surgical (NASDAQ: ISRG). Despite the COVID-19 pandemic pushing back some selective surgeries, the future is bright for this high-growth stock. To start with, healthcare stocks are generally defensive. No matter how well or poorly the U.S. economy and stock market are performing, there will always be demand for prescription drugs, medical devices, and healthcare services. Though some procedures are elective, Intuitive Surgical should have a pretty high demand floor. More importantly, this is a company that absolutely dominates the robotic-assisted surgical industry. In a little over two decades, it's placed 7,135 of its da Vinci surgical systems worldwide. That's far and away more than any of its competitors. Given the price of these systems and the training given to surgeons to use them, buyers tend to remain clients for a long time. But the best aspect of Intuitive Surgical is its razor-and-blades operating model. Throughout the 2000s, most of the company's revenue derived from selling its pricey da Vinci systems (the "razor"). Unfortunately, these are intricate machines that are costly to build, which means the margins associated with them weren't the best. Over time, selling instruments with each procedure and servicing its da Vinci systems (the "blades") have become the lion's share of sales. These are much higher margin segments. Sea Limited The third brilliant growth stock that's begging to be bought by opportunistic investors during this Nasdaq bear market dip is Singapore-based Sea Limited (NYSE: SE). What makes Sea such an intriguing buy for patient investors is its three diverse but rapidly growing operating segments. For the moment, the company's digital entertainment segment, known as Garena, is the only of the three generating positive earnings before interest, taxes, depreciation, and amortization (EBITDA). In particular, global hit-game Free Fire continues to be Sea's big winner. Whereas most gaming companies average a pay-to-play conversion rate of around 2%, Garena delivered a paying user ratio of 10% in the first quarter. Second, the company's SeaMoney digital financial services division is rapidly gaining new customers. Many of the markets Sea targets are underbanked or have limited access to basic financial services. Offer digital/mobile wallets looks to be a quick way to sustainable double-digit sales growth. But most investors are enamored with Shopee, the company's e-commerce segment. Shopee has pretty consistently been the most-downloaded retail app in Southeastern Asia, and the company has made significant inroads in Brazil. After seeing $10 billion in gross merchandise value (GMV) cross its network in 2018, Sea's first-quarter GMV of $17.4 billion puts it on pace for close to $70 billion in annual GMV in 2022. Cresco Labs The fourth fantastic growth stock that you'll regret not scooping up with the Nasdaq plunging into a bear market is U.S. multi-state (MSO) cannabis operator Cresco Labs (OTC: CRLBF). There's no two ways about, marijuana stocks have been a buzzkill since February 2021. Wall Street was jazzed on the idea that a Democrat-led Congress and President Joe Biden would usher in an era of federal weed legalization. With none of this coming to fruition, the buzz around pot stocks died. However, with individual states able to legalize cannabis, there remains more than enough opportunity for companies like Cresco Labs to thrive. At the end of March, Cresco had 50 operating dispensaries and was primarily focused on expanding its brand(s) in limited-license markets. Choosing markets where dispensary licensing is capped ensures that Cresco won't be steamrolled by an MSO with deeper pockets. Furthermore, Cresco is in the midst of a transformative acquisition that'll see it buy MSO Columbia Care in an all-share deal. When closed, the combined company will have a footprint in 18 states (up from the current 10) and sport north of 130 operating dispensaries. But arguably the best aspect of Cresco Labs is its industry-leading wholesale operations. Wall Street often dismisses wholesale cannabis because of its weaker margins. However, with Cresco holding a cannabis distribution license in California, it can more than make up for weaker wholesale margins by placing its proprietary pot products into over 575 dispensaries throughout the Golden State. Alphabet The fifth and final brilliant growth stock you'll regret not buying on the Nasdaq bear market dip is none other than FAANG stock Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG). Alphabet is the parent company of search engine Google and streaming platform YouTube. One of the most-logical reasons to add Alphabet to your portfolio is because of its ultra-dominant internet search segment. According to data from GlobalStats, Google has controlled no less than 91% of worldwide internet search market share over the past two years. As a practical monopoly, Google has little trouble commanding top-tier pricing power for ad placement. While this foundational segment is a cash cow, it's the growth initiatives Alphabet has been funneling its cash into that should have investors excited. YouTube, which is easily one of the best acquisitions of all-time, is now the world's second most-visited social media site (2.48 billion monthly active users). With so many active users, it's perhaps no surprise that YouTube could hit $30 billion in ad revenue this year -- not counting subscription sales! Additionally, Google Cloud has grown into the global No. 3 in cloud infrastructure service spending. Not only is cloud growth still in its very early innings, but cloud service margins are usually higher than advertising margins. While Cloud is a money-loser for Alphabet at the moment, it could be a serious cash flow driver by mid-decade. If you need one more good reason to buy Alphabet, consider this: It's never been cheaper relative to Wall Street's forward-year earnings forecast. 10 stocks we like better than PayPal Holdings When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and PayPal Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of July 27, 2022 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Sean Williams has positions in Alphabet (A shares), Columbia Care, Intuitive Surgical, and PayPal Holdings. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Cresco Labs Inc., Intuitive Surgical, PayPal Holdings, and Sea Limited. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off. Today’s Big Picture Asia-Pacific equity indexes ended today’s session down across the board. India’s Sensex ended the day essentially flat, down 0.06%, China’s Shanghai Composite and Australia’s ASX All Ordinaries declined 0.54% and 0.55%, respectively while Japan’s Nikkei fell 0.65%, Taiwan’s TAIEX dropped 0.74% and South Korea’s KOSPI declined 0.90%. Hong Kong’s Hang Seng led the way, down 1.96% on a broad selloff led by Health Technology and Health Services names while Transportation and Communications sectors provided the only relief. By mid-day trading, major European equity indices are down across the board and U.S. futures point to a positive open later this morning. At 8:30 AM ET, the much anticipated July Consumer Price Index (CPI) report was released: The headline figure for the month was expected to fall to 8.7% from June’s blistering 9.1% reading with core CPI that excludes food and energy ticking higher to 6.1% in July vs. 6.0% the prior month. The actual numbers show that inflation hit 8.5%, and core inflation was 5.9%. With the national average retail price for a gallon of gas falling through late June and July from its June 14 high of $5.016 per gallon per data from AAA, forecasters had expected the month over month decline in the headline CPI for July. The July Employment Report also showed wage inflation ran hotter than expected during the month. Let’s also keep in mind that we will be facing a “wash, rinse, repeat” cycle when it comes to inflation data and expectations for the Fed given tomorrow’s July Producer Price Index report. Data Download International Economy Producer prices in Japan rose by 8.6% YoY in July, compared with market forecasts of 8.4% and following an upwardly revised 9.4% the prior month. While marking the 17th straight month of producer inflation, the latest reading was the softest since last December. China's annual inflation rate rose to 2.7% in July from 2.5% in June and compared with market forecasts of 2.9% but even so the July figure marked the highest reading in the last year. The country’s Producer Price Inflation figure for July eased to a 17-month low of 4.2% YoY from 6.1% the prior month and less than the market consensus of 4.8%. Annual inflation rate in Germany was confirmed at 7.5% YoY for the month of July, down slightly from June’s 7.6% reading but still above the March and April figures of 7.3%-7.4%. The annual inflation rate in Italy slowed to 7.9% YoY in July from June’s 8% reading matching expectations for the month. While energy prices declined, prices for food and transportation rose at a faster pace. Domestic Economy This morning we have the usual Wednesday weekly reports for MBA Mortgage Applications and Crude Oil Inventories from the U.S. Energy Information Administration. At 10 AM ET, Wholesale Inventories for June will be published, and the figure is expected to rise 1.9%. While investors and economists will keep more than a passing interest in those reports and data, as we discussed above, it will be the July Consumer Price Index report at 8:30 AM ET that will shape not only how the US stock market opens today, but also expectations for the Fed’s next course of monetary policy action. The U.S. Energy Information Administration (EIA) expects domestic production of crude oil, natural gas and coal will all increase next year compared with this year. It forecast US crude production rising 6.7% to an all-time annual high 12.7M bbl/day in 2023 from 11.9M bbl/day in 2022, US natural gas output climbing to 100B cubic feet (cf)/day from 97B cf/day, and US coal production inching up to 601M short tons in 2023 from an expected 599M this year. The EIA also modestly increased its 2022 average nationwide gasoline price forecast to $4.07/GALLON vs. $4.05 if called for last month. It now also sees 2023 prices at $3.59/GAL vs. its previous forecast of $3.57. Markets Stocks continued in their holding pattern waiting for the latest CPI print save for some fundamental stories pushing Technology names and small caps around. The Dow and the S&P 500 were down slightly at 0.18% and 0.42%, respectively while the Nasdaq Composite dropped 1.19% and the Russell 2000 closed down 1.46% on the day. Energy names led the way yesterday but were overpowered by Technology and Consumer Discretionary sectors. Here’s how the major market indicators stack up year-to-date: Dow Jones Industrial Average: -9.81% S&P 500: -13.51% Nasdaq Composite: -20.14% Russell 2000: -15.83% Bitcoin (BTC-USD): -52.08% Ether (ETH-USD): -55.38% Stocks to Watch Before trading kicks off, CyberArk (CYBR), Fox Corp. (FOXA), Jack in the Box (JACK), Nomad Foods (NOMD), Vita Coco (COCO), Tufin Software (TUFN), and Wendy’s (WEN) will be among the companies issuing their latest quarterly results and guidance. At 9 AM ET, Samsung (SSNLF) will hold its Galaxy Unpacked 2022 at which it is expected to introduce new Galaxy foldable smartphone models, a new Galaxy Watch, and Galaxy Buds. Shares of advertising technology platform company The Trade Desk (TTD) jumped after the company reported quarterly results that topped expectations and guided current quarter revenue above the consensus forecast. The RealReal (REAL) reported a smaller than expected bottom line loss for its June quarter as revenue for the period rose 47.2% YoY to %154.44 million, topping the $153.99 million consensus. However, the company issued downside guidance for both the current quarter and 2022. Revenue for the September quarter is now expected to be $145-$155 million vs. the $164.3 million consensus; for the full year of 2022, revenue is forecasted to be $615-$635 million vs. the $653.7 million consensus. Shares of Coinbase Global (COIN) moved lower after it reported June quarter results that missed top and bottom line expectations. Revenue for the quarter fell 63.7% YoY as Total trading volume fell 53.0% YoY and 29.8% sequentially to $217 billion. Monthly Transacting Users (MTUs) grew 2.3% YoY but fell 2.2% sequentially to 9.0 million. For the current quarter, Coinbase sees the number of MTUs trending lower sequentially and total trading volume to be lower compared to the June quarter. Shares of Sweetgreen (SG) tumbled in aftermarket trading last night after the company missed quarterly revenue expectations, lowered its 2022 forecast, announced it will lay off 5% of its workforce, and downsize to smaller offices. ChipMOS TECHNOLOGIES (IMOS) reported its July revenue was $65.1 million, a decrease of 19.4% YoY and down 7.7% MoM. Taiwan Semiconductor (TSM) reported its July revenue increased 49.9% YoY to NT$186.76 billion, which equates to a 6.2% MoM improvement. Electric vehicle subscription startup Autonomy placed a $1.2 billion order for 23K electric vehicles with 17 global automakers, including BMW (BMWYY), Canoo (GOEV), Fisker (FSR), Ford (F), General Motors (GM), Hyundai (HYMTF), Lucid Group (LCID), Mercedes-Benz (DDAIF), Polestar (PSNY), Rivian (RIVN), Stellantis (STLA), Subaru (FUJHY), Tesla (TSLA), Toyota Motor (TM), VinFast, Volvo Car (VLVOF) and Volkswagen (VLKAF). IPOs As of now, no IPOs are slated to be priced this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page. After Today’s Market Close Bumble (BMBL), CACI International (CACI), Coherent (COHR), Dutch Bros. (BROS), Red Robin Gourmet (RRGB), and Walt Disney (DIS) are expected to report their quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar. On the Horizon Thursday, August 11 Germany: Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August US: Weekly Initial & Continuing Jobless Claims US: Producer Price Index – July US: Weekly EIA Natural Gas Inventories Friday, August 12 Japan: Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August China: China Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August Eurozone: Industrial Production - June US: Import/Export Prices – July US: University of Michigan Consumer Sentiment Index (Preliminary) – August Thought for the Day “The release date is just one day, but the record is forever.” ~ Bruce Springsteen Disclosures Tufin Software (TUFN), CyberArk (CYBR) are constituents of the Foxberry Tematica Research Cybersecurity & Data Privacy Index Canoo (GOEV), Fisker (FSR), Lucid Group (LCID), Rivian (RIVN), Tesla (TSLA), Vita Coco (COCO) are constituents of the Tematica BITA Cleaner Living Index Canoo (GOEV), Fisker (FSR), Lucid Group (LCID), Rivian (RIVN), Tesla (TSLA), Vita Coco (COCO) are constituents of the Tematica BITA Cleaner Living Sustainability Screened Index The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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