The Nasdaq-100 index has been flexing its muscles, overshadowing the more traditional Dow Jones Industrial Average in a market dance that has investors glued to their screens. The Nasdaq is a vibrant mix of companies across various sectors, with technology leading the way in this symphony of growth. As we pivot towards the latter half of the year, the tech sector is poised to remain the orchestrator of the Nasdaq’s impressive performance.
While tech may be the star of the show, other sectors within the Nasdaq 100 are proving to be powerhouse performers in their own right. Whether you’re a seasoned investor or dipping your toes into the investment waters, these three Nasdaq gems offer tantalizing growth prospects. Despite their current hot streak, these stocks are still within reach, presenting opportunities for those who want to ride the wave of prosperity.
Costco (COST)
Big-box titan Costco (NASDAQ:COST) has been on a winning streak, boasting a robust 32% gain year-to-date (YTD). Despite its lofty trailing price-to-earnings (P/E) ratio of 53.5, Costco’s march towards higher valuations may require more than a simple membership fee hike.
In the realm of price increases, Costco has some untapped potential. An adjustment to its membership fees could inject vitality into its financials. Given its reputation for value, any fee adjustments are likely to be well-received by its loyal customer base.
Alongside pricing strategies, Costco has an opportunity to embrace automation, a move that could bolster its profitability by streamlining operations. By focusing on efficiency at the checkout, Costco can enhance its bottom line while offering customers an improved shopping experience.
With multiple pathways to enhanced profitability and a firm footing in a sector known for resilience, Costco emerges as a stalwart option among Nasdaq stocks.
Netflix (NFLX)
Streaming giant Netflix (NASDAQ:NFLX) has been a standout performer, racking up an impressive 45% YTD gain that has captured the attention of investors. As Netflix sets its sights on new highs, the burning question revolves around the catalysts that will propel it to greater heights.
Betting big on live sports, Netflix is charting a growth trajectory that centers on new avenues of entertainment. Despite the recent hiccup in the cancellation of the highly anticipated boxing match, Netflix is not slowing down in its pursuit of sports streaming dominance.
Reports suggest that Netflix is on the cusp of a lucrative deal to broadcast NFL games during the festive season, a move that complements its upcoming partnership with WWE in 2025. With a focus on sports content, Netflix is signaling its commitment to expanding its entertainment repertoire.
Time will tell if this foray into sports will translate into sustained growth. Nevertheless, Netflix stands as a top momentum pick within the Nasdaq realm, even as its trailing P/E ratio stands at 47.1.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) has been on a rocket ride in recent months, fueled by a renewed interest in edge artificial intelligence (AI) plays. Despite its substantial 53% YTD surge, Qualcomm’s current valuation at 28.8 times trailing P/E still presents an attractive proposition.
Following a recent stumble that saw Qualcomm shares dip 5% on reports of AI laptop compatibility issues, questions linger about the company’s position in the AI hardware landscape. While compatibility concerns may cause a short-term blip, lessons from tech giant Apple’s transition to M-series chips imply that such challenges are surmountable.
If these compatibility woes persist and trigger a further pullback, investors who missed the initial Qualcomm surge may find a second opportunity to jump on board, echoing historical tech transitions.
Regardless of recent speed bumps, Qualcomm’s journey in the AI domain continues to hold promise, offering investors a chance to ride the wave of innovation.