If history is any guide, there’s more growth in store for the top Nasdaq stocks. Last year’s gains obliterated the dismal returns of 2022 and should continue running higher this year. Why? Bull markets tend to go on for years, and bear markets are measured in months.
Over the past 52 years, the Nasdaq Composite has only once had consecutive years of negative returns. The dot-com implosion of 2000 set the index back for three straight years. After every other downturn, the tech-heavy benchmark cobbled together multi-year runs higher. The Nasdaq Composite gained over 21% on average in the second year following a decline. While past performance does not guarantee future results, that track record bodes well for another year of growth.
While the Magnificent Seven stocks responsible for so much of the index’s performance last year will continue propping it up in 2024, the following three top Nasdaq stocks will also create lasting long-term gains for your portfolio.
ACM Research (ACMR)
ACM Research (NASDAQ:ACMR) provides advanced wafer cleaning technologies and equipment at the front-end of chip processing for the semiconductor industry. It’s a critical step in the manufacturing order flow as it eliminates contaminants from wafer surfaces.
The equipment maker primarily operates in China and benefits from the chip and equipment export controls the Biden administration imposed on technology stocks. It eliminates much of ACM’s competition. Advanced equipment makers like ASML Holdings (NASDAQ:ASML) and Lam Research (NASDAQ:LRCX) are still assessing how the export ban will affect their businesses.
Approximately 44% of ACM’s annual revenue comes from just three foundries. Although that does introduce customer concentration risk because the semiconductor market is looking at long-term exponential growth, the limited number of customers should not present much of an issue.
Wall Street certainly doesn’t think so. Analysts project ACM Research to grow earnings 43% a year for the next five years. They have a $25.75 per share consensus price target on the stock, implying a 32% upside potential over the next year. The $32 per share target suggests a 60% upside at the upper end of the range. ACMR stock appears to have lasting long-term growth potential.
Crowdstrike (CRWD)
Cybersecurity leader Crowdstrike (NASDAQ:CRWD) also has extended tailwinds pushing it forward that ought to sustain it for years. The Identity Theft Resource Center reports a record number of compromised data incidents in 2023. There were 3,205 cases last year, a 72% surge over the previous high in 2021. It will only worsen as time goes on and more businesses move data to the cloud.
That is fueling demand for Crowdstrike’s services. Revenue jumped 35% last quarter to $786 million, generating almost $27 million in profits compared to a loss of $56 million the year before. Ending annual recurring revenue (ARR) of $3 billion was a new record as gains accelerated from the year-ago period.
Customers are using a more significant number of its products, too. Crowdstrike saw a 63% adoption rate in customers using five or more products, while those using six or more were 42% and 26% for those using seven or more.
Like death and taxes, hackers will always be with us, meaning CRWD stock is one for the long haul.
T-Mobile (TMUS)
Mobile phone carrier T-Mobile (NASDAQ:TMUS) rounds out the trio of Nasdaq stocks to buy in February for lasting wealth. The telecom stock has more people covered by its 5G network than anyone else and recently surpassed rival Verizon (NYSE:VZ) as the largest U.S. carrier.
The ongoing national rollout of 5G infrastructure will fuel T-Mobile’s long-term rise. It represents the biggest upgrade to the system in over a decade and will allow users faster download speeds. Because data consumption tends to be the most profitable portion of a carrier’s revenue TMUS stock’s leadership position stands to benefit the most.
The carrier recently announced it achieved record-breaking uplink speeds of 345 megabytes per second on its 5G standalone network. They were “the fastest ever recorded in North America using sub-6 GHz spectrum.” 5G networks will be deployed in the sub-6 spectrum.
Wall Street forecasts formidable long-term earnings growth for the carrier at 27% a year. In contrast, AT&T (NYSE:T) is expected to see less than 1% earnings growth, while Verizon will see 1.5%. T-Mobile will be a winning stock for years to come.
On the date of publication, Rich Duprey held a LONG position in T stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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February 22, 2024 at 02:58PM
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3 Top Nasdaq Stocks to Buy in February for Lasting Wealth - InvestorPlace
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