Let's dive into three hidden gems that could turn your modest $1,000 into a treasure chest of long-term growth. So, buckle up, stock sleuths, and get ready for a thrill ride.
AMD: a chip off the old blockbuster
Advanced Micro Devices (AMD -0.10%) is shining bright in the semiconductor industry nowadays, with its Ryzen processors and Radeon graphics cards putting up more than a fair fight against big-name competitors. CEO Lisa Su's leadership has been instrumental in this success, driving a culture of innovation and a commitment to excellence. Under her guidance, AMD has shed its past mistakes of overpromising and underdelivering. The company is now focused on delivering high-performance products that offer great value to customers. So if want a company that's blazing its own path through the bitterly competitive semiconductor industry, AMD might just be the ticker for you.
In the past year, AMD's stock has shown impressive resilience. Shares are trading at $110, reflecting a remarkable 52% increase from their 52-week low. This impressive performance has caught the attention of several analysts. For instance, in February 2023, Cowen analyst Matthew Ramsay reiterated an Outperform rating on AMD with a price target of $130, citing the company's strong product portfolio and opportunities in the exploding artificial intelligence (AI) market.
Moreover, the company's financial results have been on an upward trajectory. In the fourth quarter of 2022, AMD reported revenue of $4.8 billion, a 49% year-over-year increase. Earnings per share of landed at $0.54. Your average analyst would have settled for $0.52 per share. This growth was driven by robust demand for its Ryzen processors and Radeon graphics cards across various segments, including gaming, data centers, and AI applications. And the recent $50 billion Xilinx acquisition should fan the flames even harder under AMD's steam engine.
As AMD continues to innovate and expand its product offerings, the company will further cement its position in the market. The stock isn't cheap but that's for good reason. You get what you pay for, namely a high-octane growth stock with its sights set on many years of continued success across many high-growth target markets.
Shopify: ringing up profits
Next in line, there's Shopify (SHOP 0.35%), a leading e-commerce platform that enables businesses and entrepreneurs to create and manage their online stores. It provides an all-in-one solution, including web design, payment processing, inventory management, and social media integrations.
If that sounds like a sweet business model in this age of everything going digital at an astonishing pace and e-commerce sales soaring on every continent, well, I think you're onto something. Shopify's annual sales have nearly doubled over the last two years and quintupled since 2018. Meanwhile, share prices have tumbled recently and the formerly high-flying stock suddenly looks quite affordable:
SHOP Revenue (TTM) data by YCharts
As the stock price tumbled 26% from its 52-week high, you might think this digital dynamo is down for the count. That may be true for the stock chart, but Shopify's actual business is healthy as a horse.
This is still the king of e-commerce platforms, and the long-term growth prospects in that target market are as impressive as ever. Sure, there's an inflation-inspired slowdown in pretty much every retail market right now, including online stores. But you shouldn't confuse a short-lived stagnation for a permanent pickle.
Oh, and did you know that Shopify already built AI smarts into its digital assistant, the Shop app? At a recent tech industry conference, Shopify president Harley Finkelstein explained how ChatGPT helps the app find the products you need.
"You can have a conversation with this incredible bot that is powered by ChatGPT, and you can say, 'I want to have a barbecue with [conference host] Keith, and it's going to be a Hawaiian theme, and there are so many people,'" Finkelstein said. "And you will see products you can buy with one click and actually create a full barbecue and a full party experience."
So the shopping experience is getting more helpful, even as shoppers everywhere are getting used to doing all types of business online. If that's not a perfect setup for launching Shopify's sales and profits to the moon, I don't know what is.
It's time to scoop up some shares while they're still a steal.
DocuSign: sealing deal after deal
Finally, let's dig into DocuSign (DOCU 0.96%), the digital document dynamo that's revolutionizing the way we sign on the dotted line. You might be scratching your head at a stock price that's down 16% from its 52-week high, but don't let that scare you. This paperless powerhouse is just getting started.
DocuSign's recent swoon is an opportunity in disguise. Despite brutal market slumps in some of DocuSign's most important client sectors such as real estate and car sales, the company's annual sales increased by 158% in the last three years. To keep up this excellent growth trajectory, DocuSign wants to expand its customer base, increase its average revenue per user, and venture into new markets like Europe and Asia. Making strides in real estate, financial services, and healthcare markets should help the company achieve these goals.
And then it's only a matter of time until market makers realize their mistake and get back to driving DocuSign's stock price higher again. Until then, DocuSign shares are trading at just 21 times forward earnings while top-line sales rose at a compound average rate of 37% over the last five years. Those shares are an absolute bargain.
Putting your $1,000 to work
With these three tempting tickers in your tableau, now's the time to make your move. Spread your $1,000 across AMD, Shopify, and DocuSign, or double down on your favorite for a potentially bountiful payoff somewhere down the road. Remember, fortune favors the bold, and when it comes to investing, sometimes you have to take a leap of faith. I don't mean you should take out a second mortgage and literally bet the farm, but this trio looks like good stewards of a fairly modest $1,000 pledge right now.
So, dust off your stock-picking hat, and let's leap into the future together. DocuSign, Shopify, and AMD want to come along for the ride. Let's say you decide to pick up 3 AMD shares, 5 DocuSign stubs, and 6 shares of Shopify, putting roughly $300 to work in each stock. You'd still have enough cash left over for a delightful family dinner after all that, or overweighting your favorite bargain idea with that last Benjamin.
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April 10, 2023 at 12:21AM
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Have $1,000? These 3 Stocks Could Be Bargain Buys for 2023 And Beyond - The Motley Fool
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