Stock Market Sell-Off: What Stocks Are the Best to Buy Right Now?

Major Points

  • Over time, Amazon is expected to gain from two key growth factors.
  • Qualcomm stock may increase if 5G cellphones become popular.
  • Tesla is poised to benefit greatly from the electric vehicle market.

These companies are now affordable and offer fantastic long-term growth potential.

Although key indices ended the week on a positive note, the stock market sell-off of 2022 still has a significant downside for the year.

The upside is that smart investors with an eye for long-term gains will discover opportunities to purchase some excellent companies at bargain prices if circumstances worsen. Let's take a closer look at some of those likely long-term winners that investors should think about purchasing during the stock market sell-off.

Secular growth tendencies will benefit these IT giants.

Due to the dramatic decrease in IT stocks this year, investors can now purchase certain well-known brands at competitive prices. For instance, Amazon (AMZN 1.42 percent) is currently trading at 56 times earnings as opposed to its 122-times earnings multiple during the past five years. Amazon was trading at 65 times earnings last year; as a result of the stock price decline of 30%, it is now more readily accessible.

Investors might not want to pass up this chance to purchase Amazon because the company is on pace to benefit from a number of catalysts. By way of illustration, the tech giant holds a third of the $178 billion global market for cloud infrastructure services. Microsoft, which came in second with a 21 percent share, trailed well behind, showing that Amazon is well-positioned to capitalize on the enormous opportunities in this market.

Amazon may experience strong additional revenue growth from this sector given that the cloud computing market is anticipated to increase at an annual rate of almost 18 percent through 2028. When you include in Amazon's potential in the worldwide e-commerce sector, it's simple to understand why the company's earnings are predicted to increase by 40% annually over the next five years. Due to all of this, Amazon is currently one of the best tech stocks to purchase.

Another tech juggernaut that is now inexpensive is Qualcomm (QCOM -1.04 percent). The semiconductor titan is trading for far less than its five-year average earnings multiple of 27, which is roughly 13 times earnings. For the next five years, analysts predict that Qualcomm's earnings will increase at a rate of nearly 14% annually. The secular growth opportunity in smartphones, as well as the automotive and Internet of Things (IoT) areas where it is gaining foothold, will make it unsurprising to see it record stronger growth.

Qualcomm's revenue jumped by 41 percent year over year to $11.1 billion in the second quarter of fiscal 2022. The top line was dominated by smartphones, which brought in $6.3 billion, with a 56 percent increase in revenue from the previous year. Due to Samsung and other manufacturers' increased use of Qualcomm chips, which accounted for 30% of the global market for smartphone application processors in the first quarter, the business is well-positioned to profit from the uptake of 5G handsets.

According to third-party estimates, the 5G smartphone market might increase at a rate of around 130% annually until 2027, and Qualcomm's substantial market share suggests that it could benefit greatly from this enormous expansion. In the meantime, Qualcomm has $16 billion in design wins in the automotive industry, which should begin to translate into sales once clients who have chosen its chips start producing vehicles and component parts using its chips. Given that the automobile industry only produced $339 million in revenue last quarter, up 41% from the same quarter a year earlier, this suggests a significant potential possibility.

This company is a tempting investment because of the potential for electric vehicles.

Electric vehicle (EV) sales are exploding, and Tesla (TSLA -1.79 percent) is already seizing this enormous potential. The way Tesla performed in the first quarter of 2022 demonstrates this. Due to a strong increase in car deliveries and production, the company's revenue increased by an amazing 81 percent year over year to $18.8 billion.

Just over 305,000 Tesla vehicles were produced during the quarter, a 69 percent increase from the same time last year. 310,000 vehicles were delivered by the corporation, a 68 percent increase from the previous year. Additionally, due to strong growth in deliveries, higher average selling prices, and reduced production costs per vehicle, Tesla's adjusted profits before interest, taxes, depreciation, and amortization (EBITDA) increased nine percentage points from the prior-year period to 26.8% last quarter.

Tesla is currently striving to increase its production capacity. Its Austin, Texas, factory is now operational, and production of the Model Y is anticipated to begin at the Texas Gigafactory later in the year. Additionally online is the company's German manufacturing facility. Over time, Tesla hopes to increase its annual vehicle deliveries by an average of 50%. It won't be shocking to see Tesla eventually reach its ambitious growth objective given that the global EV market is anticipated to grow at a rate of 29 percent annually through the end of the decade.

Analysts anticipate over 43% annual earnings growth from Tesla over the next five years, which is not surprising. With Tesla stock expected to lose 30% of its value in 2022 and a sales multiple of 13.4 compared to 25.6 last year, it appears that now is a good opportunity to purchase this prospective growth stock on the cheap.


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