The Nasdaq-100 index has a track record of rebounding strongly following an unfavorable year.
Best Stocks to Buy now : The down years of the technology sector are extremely uncommon. In reality it is the case that Nasdaq100 technology index had an annual positive return of 78 percent of the time since 1986. Furthermore the downwards in consecutive years is more uncommon — it was the only instance that has occurred for the Nasdaq-100index, during the dot-com bubble between 2000 and 2002.
However, losses are still always fresh in the minds of investors as 2022 was to be among those unfortunate years. Tech index dropped 33% and a lot of individual stocks did worse.
The market for stocks tends to rebound with a roar
The past has shown that the market typically is back on track. The table below illustrates the performance of the Nasdaq-100 in the year that was its first year of positive growth after the losses that were recorded in the years 1990, 2002, 2008 and 2018.
| YEAR | Return of the NASDAQ-100 |
|---|---|
| 1991 | 65.0% |
| 2003 | 49.1% |
| 2009 | 53.5% |
| 2019 | 38.0% |
| 2023 | TBD |
The mean of those results is 51%. So, If we’re taking past history (and the history itself) as a reference this is a clue to what’s in store in 2023. But, obviously it’s not as easy. The economic challenges of increasing inflation and high interest rates must be addressed prior to the stock market soaring higher because these factors have a negative impact on the finances of both corporations and households.
The good news is that inflation is believed to have hit its peak at the end of June in 2022 and has been decreasing every month since then. If this trend continues, it could rekindle investors’ desire to invest in stocks. Here are two that you’ll want to be a part of if it occurs.
Alphabet is a major winner in a economic recovery
Alphabet (GOOGL 1.94 percent) (GOOG 1.79 percent) is the main company for brands such as Google as well as YouTube. Google is the biggest search engine on the internet globally, boasting 92% market share and, along with YouTube it is dependent on advertising for the majority of its earnings.
Because consumers have less to spend because of the economic downturn which means that businesses are spending less to reach them which has swung an immediate blow to Alphabet’s revenues through Google Search and YouTube. However, the good news is that, if 2023 winds as a stronger decade than that of 2022 the two platforms may come roaring again.
Furthermore, YouTube has some exciting developments which could dramatically increase its capacity to earn money in the near future. One of these is the rapid growth of short-form videos via the Shorts service, which boasts 1.5 billion active monthly users since it was launched just two years ago, putting it on the same level as ByteDance’s TikTok.
If Alphabet’s financial results for 2022 are published on February 1, Wall Street analysts expect the company to report $283 billion in revenue as well as $4.71 for profits per share. From a value perspective according to the value-to-earnings-to-value ratio of 17.1 It’s currently trading at its lowest level within the last decade. It’s due to Alphabet stock has dropped 43 percent from its record highest point. If 2023 is the year that brings an overall market recovery this discount is likely appear to be an amazing opportunity.
Nvidia is an investment in the future, both in the immediate and long-term future
The NVIDIA ( NVDA -0.73 percent) is a world-leading semiconductor manufacturer. It is the manufacturer of one of the highest-priced chip designs for personal computers as well as data centers and even automobiles. The year that ended in the last quarter was a challenging one for the firm because consumers slowed their spending, which led to the gaming segment’s revenues down 51% during its third quarter in fiscal 2023 (ended October. 30, 2023).).
If the consumer market is able to rebound in the calendar year 2023, it may revive what was once the biggest source of revenue. However, the company is able to generate sales through a variety of methods as well its data centre business has taken over its financial health and hasn’t ever stopped growing. Data centers will become vital in the coming decade because advanced technology such as artificial intelligence allows businesses to squeeze more value from their digital assets as well as cloud computing solutions.
But it’s not the only potential long-term investment that Nvidia has in its sights. The Drive platform is comprised of software and hardware components created to assist automakers implement fully autonomous self-driving features in their vehicles, and even though it’s not yet a huge thing but it’s the most rapidly growing segment of the entire business in the present. As of now, Drive has attracted at 35 world’s biggest automakers.
In the midst of uncertainty regarding gaming as well as the decline in the overall economy, Nvidia stock has declined by 57% since the all-time peak. If the market recovers similarly to how it did in previous down years, this discount could become quite a bargain.
