The Nasdaq has taken a rather large hit in recent weeks, sinking about 7.5% between July 18 and Aug 17. Two of the main reasons for the decline are worries about U.S. inflation and the Chinese economy. With regard to U.S. inflation, it’s in line with historical norms at 3.2%. Given this reality, I don’t expect the Federal Reserve to raise interest rates much further. If that’s the case, weakness in the major indices, including the Nasdaq should be short-lived, and could boost oversold Nasdaq investment opportunities, including:
Oversold Nasdaq Investment Opportunities: Rivian (RIVN)
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Electric vehicle (EV) maker
Rivian (NASDAQ:
RIVN)
is down 18% from its July 31 high of $27.64. And impressively, its top line
soared over 200% year-over-year last quarter to $1.12 billion. All while production last quarter climbed almost 50%, quarter over quarter. Plus, RIVN
expects to become profitable by the end of next year, with its gross loss per EV falling to $32,595 in Q2 from $67,329 in Q1.
Fueling interest, George Soros owned
4.19 million of RIVN stock as of the end of Q2, up from 3.58 million at the end of Q1. Meanwhile, responding to Rivian’s Q2 results, French bank
BNP Paribas hiked its rating on the shares to “outperform,” citing what it sees as strong demand for RIVN’s EVs and the enhanced outlook of its bottom line. RIVN stock
has a forward price-sales ratio of 2.85. That’s quite low, given the automaker’s explosive growth and its estimate of reaching profitability at the end of 2024.
bluebird bio (BLUE)
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bluebird bio (NASDAQ:
BLUE) sank about 50% so far this year. However, on July 19,
Bank of America upgraded the shares to “buy” from “neutral.” The firm believes that the US Food and Drug Administration (FDA) will approve the company’s gene therapy, lovo cel, as a treatment for sickle cell disease around the end of this year.
According to
Bank of America, lovo cel is as effective as exa cel, a competing gene therapy created by
CRISPR Therapeutics (NASDAQ:
CRSP) and
Vertex Pharmaceuticals (NASDAQ:
VRTX), In addition, the
Institute for Clinical and Economic Review (ICER), which specializes in estimating the value of drugs, believes that BLUE’s treatment is more valuable than that of its competitor.
Oversold Nasdaq Investment Opportunities: Microsoft (MSFT)
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Microsoft (NASDAQ:
MSFT) sank about 10% from its July 18 peak of nearly $360. However, the software giant is well-positioned to benefit from the proliferation of artificial intelligence. First, the increased use of AI will result in companies storing much more data, greatly raising the demand for MSFT’s cloud offerings. And secondly, the potency of MSFT’s products will be greatly enhanced by AI.
And finally, MSFT is offering new, AI-based products, which it has dubbed Co-Pilot.
Seeking Alpha columnist
The Profit Hunter estimates that Co-Pilot alone can boost the giant’s EBITDA by 23%. Making me more confident in MSFT stock, multi-billionaire Paul Tudor Jones
raised his stake in the name to nearly 242,000 shares at the end of Q2 from just roughly 18,700 shares at the end of Q1.
Super Micro Computer (SMCI)
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Super Micro Computer (NASDAQ:SMCI) fell by nearly 30% from its Aug. 7 peak. Like Microsoft, SMCI is poised to get a huge boost from the AI boom. In fact, in Q2, almost 50% of its revenue was generated from “AI-related designs,” as its sales from its “OEM appliance and large data center” markets nearly doubled last quarter versus the previous period to $1.17 billion.
Overall, the company’s top line jumped 70% versus Q1 and 34% year-over-year to $2.18 billion, and the firm’s net income rose to $194 million from $141 million during the same period a year earlier. “Next-generation CPU and AI platforms continue to drive record levels of design wins and orders,” said CFO David Weigand on its earnings call. Also, SMCI believes that its revenue can surge 2.5 times within the next “couple of years.”
Oversold Nasdaq Investment Opportunities: Roku (ROKU)
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Roku (NASDAQ:ROKU) stock may have pulled back in recent months. However, the company’s Q2 results, showed that it is still growing rapidly. Specifically, its top line climbed 11% year-over-year, while its gross profit increased 7% versus the same period a year earlier. It also added a net total of 1.9 million active accounts last quarter versus Q1. In addition, its streaming hours soared by 4.4 billion hours last quarter versus the same period a year earlier to 25.1 billion.
Moreover, the company expects its ad revenue to rebound as the overall ad market improves going forward, and it predicts that it will generate positive EBITDA, excluding some items, this year. As streaming’s share of total TV viewing continues to grow and the TV ad market recovers, ROKU stock is very well-positioned to outperform going forward.
Novavax (NVAX)
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Novavax’s (NASDAQ:
NVAX) shares have tumbled 21.5% this year. The company, which has developed a Covid vaccine that’s not based on mRNA technology, may be well-positioned to benefit from new data on the potential adverse effects of the mRNA shots.
Recently, for example, Swiss “
researchers found that 2.8% of individuals (who received mRNA booster shots) had an above-average level of troponin at day three after vaccination.”
Health Feedback reported. “When all other plausible explanations are eliminated, an elevated troponin level after the booster shot is…likely to have been caused by the vaccination and would suggest a mild cardiac injury.”
In addition, Christian Müller, a professor of cardiology at Basel University who presented the findings, explained that they showed that nearly 3% of participants exhibited evidence of having
“mild, temporary cardiac muscle cell damage” after receiving an mRNA booster,
Health Feedback noted.
The publication did state that the study did not compare the troponin levels of vaccinated individuals with people who were unvaccinated.
Still, I think that the relatively large numbers of vaccinated individuals with high troponin levels could set off alarm bells among some physicians and consumers. As a result, the demand for NVAX’s shot could very well soar, boosting the company’s financial results and NVAX stock. Given these points, I view it as one of the oversold Nasdaq stocks poised to rebound.
Exact Sciences (EXAS)
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Exact Sciences (NASDAQ:
EXAS) may have sunk in recent months. However, the adoption of the company’s Cologuard colon cancer test is growing rapidly, while its multi-cancer blood test looks poised to become a huge game changer. Revenue generated by the company’s core business, its Cologuard colon cancer test,
jumped 24% last quarter versus the same period a year earlier to $617.5 million. Also noteworthy is that its operating activities generated $100 million of cash last quarter.
Additionally, EXAS is developing a “
next-generation Cologuard test,” which has a false positive rate that’s 30% below the level of the current test. EXAS is confident that this improvement will result in many more doctors urging their patients to utilize Cologuard instead of colonoscopies.
Most exciting is the progress of the company’s multi-cancer early-detection blood test. Baylor Scott & White, a primary care organization in Texas, “
will administer approximately 50,000 Multi-Cancer Early Detection tests (from EXAS) to (its) patients.” I believe that Baylor’s decision to administer the test to so many of its patients bodes very well for medical organizations’ interest in adopting the test going forward.
On the date of publication, Larry Ramer was long NVAX,EXAS, RIVN, and SMCI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
