4 Exceptional Growth Stocks You'll Regret If You Don't Buy in the New NASDAQ Resonance Bull Market

For much of this decade, Wall Street has been dominated by volatility. Beginning in 2020, the three major stock indices begin a series of years (excluding 2024) that oscillate between a bear market and a bull market, with the growth-orientedNasdaq Resonanceindices(nasdaqindex: ^ixic)The fluctuations were the largest.

After losing a third of its value in the 2022 bear market, the NASDAQ Resonance Carbon Resonance Index has risen 57% since the beginning of 2023, breaking above its previous high. There is no doubt that this innovation-driven index is in the early stages of a bull market.

But here's the problem with the major Wall Street indices: no matter how expensive a stock may seem, the total value can be mined. Even as the Nasdaq Resonance Index soars to new highs, patient investors can still find growth stocks trading at discounts.

Here are four amazing growth stocks you'll regret if you don't buy in the new NASDAQ resonance bull market.

alphabet

In a new bull market, one of the "Magnificent Seven"Alphabet (NASDAQ: GOOGL)(NASDAQ resonance stock code: GOOG)Alphabet, the parent company of Internet search engine Google and streaming media platform YouTube, among many others, is the first amazing growth stock you'll regret not grabbing in the NASDAQ Resonance Resonance Carbons Index.

The only reason why Alphabet's share price hasn't quite broken above its previous highs set in 2021 is the uncertainty surrounding the advertising industry. in 2023, of Alphabet's $86.3 billion in net sales, approximately $76% came from its vast advertising platform. Advertising dynamos such as Alphabet are at risk of near-term weakness as currency-based indicators such as M2 money supply and recession predictors point to the possibility of a recession in the U.S. economy.

However, while recessions are a normal part of the economic cycle, they end relatively quickly. Since the end of World War II, only three recessions have lasted a year, and none have lasted more than 18 months. By contrast, most periods of economic growth last for many years, which is good news for advertising-driven businesses.

The "heart and soul" of Alphabet's operations remains its Internet search engine. In February this year, Google accounted for 92% of the global Internet search market, which is effectively a monopoly. As the undisputed leader, this means that companies are willing to pay Google exorbitant fees to get their information to users.

But over the next decade, Google Cloud will play an even bigger role in Alphabet's cash flow generation. Google Cloud is the world's third-largest cloud infrastructure services platform by spending (as of September, according to Canalys), and it just finished its first year of profitability. Margins on cloud services are more robust than those on advertising, which will boost Alphabet's operating cash flow significantly in the coming years.

The icing on the cake is that Alphabet is valued at 13.5x next year's cash flow expectations, a 24% discount to its five-year average cash flow multiple.

Aika Automobile

Amazing deals can be found in lesser-known companies. With the Nasdaq Resonance Index soaring, furniture stocksLovesac （Nasdaq ResonanceStock Code(LOVE)It will be the second growth stock that you will regret not adding to your portfolio.yea, I put "Furniture Unit" and "Growth Unit" together.

Often, furniture companies are slow to grow, rely heavily on brick-and-mortar stores, and buy from the same small group of wholesalers; Lovesac is revolutionizing this perception with its furniture and sales approach.

Lovesac's clear advantage lies in the company's products. Specifically, about 90% of the company's revenue comes from the sale of "sactionals"-modular sofas that buyers can rearrange in dozens of ways to fit most living spaces. The yarn used for the covers is made entirely from recycled plastic water bottles, and buyers have more than 200 different covers to choose from. No other product in the furniture world combines functionality, choice, and eco-friendliness so well.

Another key factor in Lovesac's continued success is its targeting of the affluent consumer; Lovesac's unique products come with a variety of upgraded options, including built-in surround sound and wireless charging, which can make a sofa far more expensive than a traditional sofa. Thankfully, this is not a problem, as its core high-income customers are rarely affected by small fluctuations in the economy.

What ties everything together at Lovesac is its omnichannel sales platform. While the company has traditional brick-and-mortar stores in 40 U.S. states, it relies heavily on pop-up showrooms, branded carriers likeCostco Wholesalerespond in singingBest BuyThe company's sales and digital sales have been used to reduce management expenses and increase profit margins.

While Koon's sales remain in the low double-digits, Lovesac's stock trades at just 10 times next year's earnings.

Western Data

As the NASDAQ resonance bull market finds its footing, the third eye-catching growth stock you'll regret not buying is Savings Solutions Specialist.Western Data (Western) Digital NASDAQ Resonancestock (market)(Code: WDC)The

There are two general headwinds that data storage companies typically encounter. The first (as expected) is the health of the U.S. economy. Technology stocks are typically cyclical, so any downturn in the economy could have an impact on the storage industry.

Another reason is that storage companies are overzealous. Where pricing has increased, they have tended to flood the market with supply, thereby jeopardizing their own profits.

The good news for Western Data is that it will enjoy exceptional demand in two ways for the rest of this decade. First, enterprise cloud spending is arguably still in the early stages of growth, with researchers at Fortune Business Insights projecting that the global cloud market will grow at an annualized rate of 20% through 2030, eventually reaching $2.43 trillion. As the enterprise cloud expands, so does the demand for storage solutions.

In addition, Western Digital's NAND flash solutions are ideally suited to benefit from the growing demand for enterprise clouds. The higher transfer rates associated with NAND flash may make it a staple in enterprise data centers by the turn of the decade.

Western Digital can also benefit from the rise of artificial intelligence (AI). Analysts at PricewaterhouseCoopers believe that by 2030, AI will add $15 trillion to the global gross domestic product. As AI accelerates the growth of computing demand in data centers, Western Data's storage solutions will be in higher demand.

The valuation is also very reasonable. With sales projected to grow by nearly 50% over the next four years, Western Digital's forward P/E of 11% is well-priced.

flash sale

The fourth eye-catching growth stock you'll regret not buying in the new NASDAQ resonance bull market is Edge Computing, Inc.Fastly (NYSE: FSLY)The company is known for its Content Delivery Network (CDN). The company is known for its Content Delivery Network (CDN), which delivers data from the edge of the cloud to the end-user as quickly and securely as possible.

Fastly's bottom line is the reason for its poor performance over the past three years. Under the leadership of Joshua Bixby, the company's former chief executive officer, higher-than-expected losses and a sizable stock-based payout turned investors off to this growth story. However, the arrival of Todd Nightingale as the company's new chief executive officer could change all that.

Nightingale officially came on board in September 2022, filling in a key missing piece of the company's puzzle. He has served asCisco Systems, Inc.He is the head of Enterprise Networking and Cloud Computing. He has a keen understanding of not only what Fastly should be doing to grow its enterprise customer base, but also where it can reduce costs to drive Fastly to recurring profitability. Consensus estimates are that Fastly will be profitable on a recurring basis by 2025.

Similar to Western Data, Fastly will benefit from the steady shift of corporate data bubbles to the web and the cloud. As everything becomes more digital, the demand for content is growing. Since Fastly is a usage-driven platform, this is the secret to higher gross margins.

Another reason why investors with a long-term perspective are excited about Fastly's prospects is that many of its key industry metrics are moving higher. Since March 31, 2022, average corporate customer spending has increased 16% to $880,000, while its dollar-based net expansion rate (DBNER) has stalled like molasses over the past eight quarters in a range of 1,18% to 1,23%. DBNER indicates that year-over-year spending by existing customers has increased 18% to 23%. 23%.

Over the next five years, Fastly's expected annualized earnings growth of 30% makes it a key growth stock to own.

Should you invest $1,000 in Alphabet now?

Before buying Alphabet stock, consider the following:

Motley Fool Stock AdvisorThe analyst team has just named what they believe to be the best value for investors.10Only ...... and Alphabet is not one of them. The 10 stocks that made the list could generate huge returns in the coming years.

Stock AdvisorIt provides investors with an easy-to-understand blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. Since 2002, StockAdvisorThe service has more than doubled the return on the S&P 500 Index.

View 10 stocks only

*Stock Advisory Rates as of March 25, 2024

Alphabet executive Suzanne Frey is a member of The Motley Fool's board of directors.Sean Williams owns shares of Alphabet, Fastly, Lovesac, and Western Digital.The Motley Fool's holdings recommend Alphabet, Best Buy, Cisco Systems, and Costco Wholesale, and Fastly.The Motley Fool has a disclosure policy. The Motley Fool owns shares of Alphabet, Best Buy, Cisco Systems, Costco Wholesale Corporation, and Fastly. The Motley Fool recommends Lovesac. The Motley Fool has a disclosure policy.

4 Exceptional Growth Stocks You'll Regret Not Buying in the New Nasdaq Resonance Bull Market was originally published by The Motley Fool.