2 stocks to buy as Wall Street prepares for a Fed rate pivot scenario

Nasdaq has prospered in 2023, outperforming the Dow and S&P 500

Some tech stocks are back in favor thanks to easing concerns about inflation and rising interest rates

Therefore, I recommend buying Snowflake and MongoDB as fears of falling inflation will boost hopes of a near-term pivot from the Fed.

This week saw analysts reassess the Fed's ability to raise interest rates amid the SVB collapse as well as signs of easing in inflation.

After the market predicted an 80% chance of rate hikes by 50 basis points on March 10, recently, with traders now expecting a lower 25 basis point increase at the meeting. Fed's March 21-22 policy meeting, according to Investing.com's Fed Rate Monitor.

The tech-heavy Nasdaq Composite Index, which fell sharply in 2022, is now the best-performing of the three major US indexes so far in 2023, as investors return to equities. growth slowed sharply in the past year amid easing macro concerns .

Considering that, I recommend buying Snowflake stock

(NYSE:SNOW) and MongoDB (NASDAQ:MDB) amid easing concerns about Fed rate hikes and signs that inflation may have peaked. In my view, both companies still have plenty of growth potential and plenty of room to grow their businesses, making their stocks good long-term investments.


Year-to-date performance: -2.6%

Market capitalization: $44.97 billion

With the Fed approaching the end of its tightening cycle, I personally believe Snowflake is one of the best stocks to own, especially at current valuations. In my opinion, the Warren Buffett-backed technology company is well positioned to achieve continued growth thanks to strong demand for data management and analytics tools.

Shares have fallen 22.5% over the past 12 months, far worse than the S&P 500's roughly 7% drop over the same period, as sharp hikes in US central bank interest rates have caused a loss. stock prices of major software companies.

At current levels, the cloud-based data storage software provider's stock — about 67% from the record $429 peak reached in December 2020 — has a market cap of 44 .97 billion dollars.

Watch More Image Here >>>>

Despite the recent upheavals, I believe Snowflake is still on track to become one of the fastest growing companies in the software industry. For that reason, I see the stock's recent decline as an excellent opportunity for investors to take a position on this high-quality name.

Snowflake — whose customers make up nearly half of all Fortune 500 companies — reported record fourth-quarter earnings and easy-to-beat revenue on March 1. The company has now surpassed the benchmarks. 

Wall Street's revenue and profit expectations for nine consecutive quarters since the third quarter of 2020, indicate very good business performance for the company.

Product revenue for the quarter was $555.3 million, up 54% year-over-year as large enterprises spent more on cloud-based data storage and analytics services.

The data specialist said it had 7,828 customers as of January 31, 2023, up 31.2% year-on-year. Furthermore, customers with an annual recurring revenue (ARR) of $1 million or more grew about 80% to 330.

“We operate in a large and growing market that prioritizes our core businesses and stays true to our product revenue goals,” Chief Executive Officer Frank Slootman said in a statement. our $10 billion product in fiscal year 2029.”

Additionally, Snowflake's board of directors announced a new $2 billion stock buyback program, which underpins the company's positive long-term outlook. The share buyback will be funded by Snowflake's working capital and will expire in March 2025.

Đăng nhận xét

Mới hơn