Stocks to buy

One of the most interesting things about a bear market is scouring around for secular growth trends because even when the rhetoric is doom and gloom, companies and industries continue to grow.

Investors need to be looking for these investing trends if they want to profit down the road, as that wave of growth will eventually come.

During times of trouble, investors seem to forget the realities of the market. Generally speaking, the market spends much of its time moving higher. Since 1950, the S&P 500 has climbed on an annual basis more than 80% of the time. Despite this fact, investors tend to focus on the negatives when we’re in a bear market.

I get it: They’re fast, volatile and scary. But that doesn’t mean the world stops or that companies stop growing and stop innovating. Because they keep going, new investing trends are emerging, while existing ones are getting stronger.

That’s even when the stocks that are impacted by these trends aren’t acting well. With that in mind, let’s look at a few such trends.

NVDA Nvidia $129.29
MSFT Microsoft $245.38
TSLA Tesla $303.75

Artificial Intelligence

Source: Shutterstock

One of the largest trends unfolding in technology is artificial intelligence (or AI) and machine learning (or ML). The workload and capability that AI and ML applications are capable of will be a game changer in almost every industry and sector on earth.

There will be many companies that help elad the change, but I want to go with Nvidia (NASDAQ:NVDA). That may elicit few eye-rolls given the performance of this stock, as it recently made new 52-week lows and is down more than 57% this year.

Despite a disappointing quarterly result in late August — which included an earnings miss, in-line sales results and disappointing guidance — Nvidia has long-term secular tailwinds working in its favor. While AI and ML applications will have a ton of productivity potential, they also need a lot of power and a lot of real-time computing.

As a result, they will need high-powered and capable GPUs, which Nvidia produces. The company already plays a role in AI development and, in so many words, will act as the building blocks (or the foundation) of many AI applications in the future making it one of the investing trends to keep an eye on.

For those interested, the company’s upcoming GTC conference will have a lot of AI- and ML-related talking points.

Cloud Computing

Source: Asif Islam / Shutterstock.com

Cloud computing is not one of the hot new investing trends. It’s been around for years and has driven countless stocks to jaw-dropping values.

Nvidia has helped power the cloud, which is part of what has driven its success. While one could argue Amazon (NASDAQ:AMZN) should be in this spot, I’m going to go with Microsoft (NASDAQ:MSFT).

Microsoft has become an absolute juggernaut of a company. While it was one of the old “dinosaur tech stocks” a decade ago, the recent run has been meteoric. From April 2001 to October 2013 — and keep in mind, by April 2001, Microsoft was still down 40% from its dot-com high — shares were flat. Then Microsoft stock exploded 800% from October 2013 to an all-time high.

In short, this stock has been a monster.

While it relies on many other facets for its revenue — like Office, enterprise, LinkedIn, gaming, etc. — the cloud (Azure) has been a huge part of Microsoft’s success. I can’t help but notice the durability of its business.

Estimates call for 11.5% revenue growth this year, then 14% to 15% growth each year through FY 2026. On the earnings front, analysts expect 18% growth this year and 20% next year. All of that on top of the fact that Microsoft has better operating margins than all of FAANG.

With the cloud acting as one of Microsoft’s crown jewels, this is a hard one to ignore.

Electric Vehicles

Source: University of College / Shutterstock.com

When it comes to electric vehicles (or EVs),  how can we go with any other company than Tesla (NASDAQ:TSLA) at this point? One could make a valid argument for Ford (NYSE:F), as it has electrified the most popular vehicle in the US, but Tesla is the undisputed king of EVs.

The automaker continues to deliver robust growth even through a period mired in lockdowns, supply chain issues and opening new plants. It now has plants in California, Texas, China and Germany.

Tesla has made its name as an automaker, but it would be foolish to ignore its progress in energy. That’s especially true as we’re seeing massive droughts and energy shortages across several continents. Solar, electricity storage and EVs are a trend that should only grow in the future and that’s going to spell big money for Tesla.

As it stands, analysts expect almost 60% revenue growth this year, then 43% growth in 2023 and 30% in 2024. If it comes to fruition, Tesla will do more than $150 billion sales in 2024. This isn’t just an automaker, it’s a tech company.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell

Articles You May Like

Caligan picks up a stake in Verona Pharma, seeing an opportunity to generate more value
Market Watch: How Trump’s Tariff Strategy Could Reshape This Rally
Hedge funds performed better under Democratic presidents than Republican ones, history shows
BlackRock expands its tokenized money market fund to Polygon and other blockchains
AI’s Dark Horse Could Become Its Crown Jewel Under Trump