Friday, February 23, 2024
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3 Nasdaq Stocks to Buy for the Next Bull Run: February 2024

These Nasdaq stocks will achieve 20% EPS growth as entertainment and leisure spending trends higher

Over the past two weeks, the Nasdaq 100, a barometer for tech-heavy and growth-oriented stocks, has shown a resurgence. This comes amid some impressive earnings reports, especially from Nasdaq stocks like Meta Platforms (NASDAQ:META). As this positive news propels markets higher, we discuss some stocks that promise robust returns in the impending bull run.

Three Nasdaq-listed companies stand out for their potential. Each has demonstrated adaptability to changing consumer behaviors. Moreover, they are showing they can leverage market dynamics in their respective industries in their favor.

Today, they possess unique strategic strengths to capitalize on future opportunities. Although their sectors — travel, entertainment, and gaming — are diverse, they are unified by transformative growth driven by technological innovation. Additionally, according to Finviz, each will achieve over 20% annual earnings per share (EPS) growth in the next five years.

These Nasdaq stocks are leading innovators and deserve a place in your portfolio. They have also shown incredible earnings resilience in the face of past market volatility, which is why they provide an opportunity going forward. They are compelling picks for investors aiming to ride the next wave of Nasdaq’s bull run.

Booking Holdings (BKNG)

Booking Holdings (NASDAQ:BKNG) is a global online travel and related services leader. With its vast portfolio of brands, including Booking.com, Priceline, Kayak and Agoda, it stands at the forefront of the post-pandemic travel revival. It offers a comprehensive range of services, from accommodation bookings to flight reservations, car rentals and travel insurance.

In terms of innovation to power growth, its investments in technology to enhance user experience have been commendable. In 2023, it launched an AI trip planner that utilizes natural language. Now, users can search for subjects like “plan a trip to Paris” and create an itinerary that suggests places to stay and sites to visit. Users can also request suggestions based on their budget.

These innovations position Booking Holdings to capture the growing demand for travel in a post-pandemic world. Revenue growth is already impressive with Q3 revenues soaring 21.3% year-over-year. Room units, rental car days and airline tickets sold grew 14.9%, 20% and 56.6%, respectively, from last year highlighting strength across the board.

Financially, Booking Holdings has capitalized on robust demand to drive profitable growth. Indeed, it’s one of the most profitable Nasdaq stocks. For the nine months ended September 2023, it generated $5.7 billion in free cash flow, some 34.7% of total revenues. Given the robust cash generation, it repurchased $7.7 billion of its shares which reduced its share count by 8%.

Still, with $16 billion of the $24 billion authorization left, there is room to reduce its share count further. Management expects to complete the buyback in four years. Booking’s global footprint and robust balance sheet, with $14 billion in cash, provide a solid foundation for growth. Moreover, innovation in artificial intelligence and digital payment solutions will enhance its competitive edge.

Netflix (NFLX)

Despite stiff competition from new entrants in the streaming space, Netflix (NASDAQ:NFLX) has maintained its growth momentum. As Q4 2023 results showed, the pioneering streaming service is dominating the entertainment landscape.

The platform continues to attract more customers with its vast content library spanning various genres and languages. In Q4 it added 13.1 million global streaming subscribers compared to 7.7 million in the year-ago quarter. That addition was a quarterly record highlighting the impressive momentum.

The company’s strategy of investing heavily in original content and licensing the best intellectual property from peers is working. It is attracting new subscribers and retaining existing ones, contributing to its robust subscriber numbers and revenue growth. Notably, it closed 2023 with 260 million paid memberships and achieved Q4 revenue growth of 12.5%.

In terms of forward growth, management is optimistic, expecting 13.2% revenue growth this quarter. With a bold slate for 2024, including dramas like The Diplomat, Squid Game, and Empress, and unscripted series like Love is Blind, Tour de France: Unchained and F1: Drive to Survive, audiences have a wide selection to choose from.

Last, its foray into gaming and advertising offers new avenues for engagement and revenue. In its Q4 shareholder letter, management outlined a $600 billion revenue opportunity in pay TV, film, branded advertising and games. If Netflix captures a fraction of this market, it will be one of the best Nasdaq stocks.

Take-Two Interactive Software (TTWO)

Take-Two Interactive Software (NASDAQ:TTWO) is a leading developer and publisher of video games. Its portfolio features blockbuster franchises such as Grand Theft Auto, Red Dead Redemption, and NBA 2K, garnering a loyal and growing fan base.

This gaming giant’s success can be attributed to its high-quality game development. Its blockbuster Grand Theft Auto V is the best-selling console and PC-only game. By the end of its fiscal 2024 second quarter, it had sold over 190 million copies as of the game. Red Dead Redemption 2 is another incredible title that sold over 57 million units.

Besides new game releases, the company has utilized effective monetization strategies to spur growth. These include in-game purchases and advertising. Through strategic partnerships, advertising revenues grew from $257 million to $359 million for the six months ended Sept. 30, 2023.

Over the next year, Take-Two Interactive stands out as one of the most exciting Nasdaq stocks. It has a roster of upcoming game releases spearheaded by the much-awaited Grand Theft Auto VI. Given the huge interest the trailer garnered, analysts are optimistic about its revenue potential. Jeffries expects TTWO stock to glide higher as we approach the 2025 launch.

On the date of publication, Charles Munyi did not hold (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.

Charles Munyi has extensive writing experience in various industries, including personal finance, insurance, technology, wealth management and stock investing. He has written for a wide variety of financial websites including Benzinga, The Balance and Investopedia.

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