The rampant market volatility is evident from the CBOE Volatility Index’s 66.2% year-to-date gains. With the double whammy of soaring inflation and the Fed’s rate hikes, an economic slowdown is nearly inevitable, with the rising odds of a recession.
However, according to Nigel Chalk, deputy director of the IMF’s Western Hemisphere Department, the U.S. recession is likely to be ‘relatively short,’ given the country’s favorable economic condition.
We think quality stocks Advanced Micro Devices, Inc. (AMD), Palo Alto Networks, Inc. (PANW), and Amazon.com, Inc. (AMZN), which have registered substantial gains over the past years, are well-poised to replicate that momentum in the next decade. Thus, we think these stocks could be ideal additions to your watchlist now.
Advanced Micro Devices, Inc. (AMD)
AMD has been operating as a semiconductor company worldwide for over 50 years. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded, and Semi-Custom.
Earlier this month, AMD unveiled next-generation hardware and software roadmaps, expanded product portfolio, and strategies to accelerate growth and deliver pervasive AI leadership.
“From the cloud and PCs to communications and intelligent endpoints, AMD’s high-performance and adaptive computing solutions play an increasingly larger role in shaping the capabilities of nearly every service and product, defining the future of computing today,” said Dr. Lisa Su, AMD chair and CEO.
On May 26, 2022, AMD completed its acquisition of Pensando Systems, an edge computing, and cloud computing services developer. The company expects this acquisition to enhance AMD’s data center solutions capabilities.
For the first quarter ended March 26, 2022, AMD’s net revenue increased 70.9% year-over-year to $5.89 billion. Its non-GAAP net income came in at $1.59 billion, up 147.5% year-over-year, while its non-GAAP EPS came in at $1.13, up 117.3% year-over-year. Also, its adjusted EBITDA came in at $1.97 billion, up 129.5% year-over-year.
Analysts expect AMD’s revenue to be $26.33 billion in 2022, representing a 60.2% year-over-year increase. The company’s EPS is expected to grow 58.1% year-over-year to $4.41 in 2022. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters.
AMD has gained 1,393.2% over the past decade to close the last trading session at $80.78.
Palo Alto Networks, Inc. (PANW)
PANW provides cybersecurity solutions worldwide. The cybersecurity leader operates across various industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications.
On June 23, 2022, PANW launched its Out-of-Band Web Application and API Security to Prisma Cloud. This new product aims to help organizations secure web applications with maximum flexibility amid the rapidly evolving digital world.
In May 2022, PANW announced that Oracle Corporation (ORCL) had chosen Palo Alto Networks VM-Series Next-Generation Firewall (NGFW) as the technology to power the Oracle Cloud Infrastructure (OCI) Network Firewall. This reflects the company’s solid positioning in the cybersecurity space.
PANW’s total revenue came in at $1.39 billion for its third quarter ended April 30, 2022, up 29.1% year-over-year. Its non-GAAP net income came in at $193.10 million, up 38.4% year-over-year, while its non-GAAP EPS came in at $1.79, up 29.7% year-over-year.
Analysts expect PANW’s revenue to increase 29.1% year-over-year to $5.50 billion in 2022. Its EPS is expected to grow 27.4% per annum for the next five years. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 30% to close the last trading session at $491.91. PANW shares have gained 261.2% over the past five years.
Amazon.com, Inc. (AMZN)
This retail giant needs no introduction. The company operates through three segments: North America; International; and Amazon Web Services (AWS).
Earlier this month, Amazon Fashion announced the launch of Virtual Try-On for Shoes, an interactive mobile experience that uses augmented reality to help customers visualize how a pair of shoes will look on themselves from every angle. The company expects to enhance customer experience and expand to more brands and styles.
On April 28, 2022, Andy Jassy, AMZN’s CEO, said, “We see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020.”
For its first quarter ended March 31, 2022, AMZN’s total net sales increased 7.3% year-over-year to $116.44 billion. In addition, its net service sales came in at $59.99 billion, up 17.6% year-over-year. The company’s cash and cash equivalents came in at $36.60 billion, up 7.2% year-over-year.
AMZN’s revenue and EPS are expected to grow 16.8% and 250.6% year-over-year to $612.83 billion and $2.70, respectively, in 2023.
The stock has gained 870.6% over the past decade, closing the last trading session at $107.40.
AMD shares were trading at $78.30 per share on Wednesday morning, down $2.48 (-3.07%). Year-to-date, AMD has declined -45.59%, versus a -19.25% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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