The Nasdaq Composite, which tracks the performance of the more than 3,000 stocks listed on its exchange, has been a wild ride so far this year. After climbing as much as 24% by early July, the widely followed index fell into correction territory earlier this month, down 13% from its high before trimming its losses last week.
This downturn had some investors wondering whether the market’s bull run had come to an end. However, many on Wall Street believe this is a temporary situation. U.S. Bank Wealth Management’s chief investment officer, Eric Freedman, is unfazed and believes there’s additional upside ahead. “We still think it’s a great time to be invested,” he wrote. The analyst went on to point out that “drawdowns of 5% to 10% or more in a given year are not unusual.”
With that as a backdrop, there are a couple of top-notch Nasdaq stocks that still have plenty of room to run and could soar as much as 114%, according to select Wall Street analysts.
CrowdStrike Holdings: Implied upside of 71%
Cybersecurity specialist CrowdStrike Holdings (NASDAQ: CRWD) has made headlines this year, but not in a good way. The company rolled out a software update that took down Microsoft Windows, the first domino to fall in a global tech outage that hit banks, hospitals, and airlines, among many others.
The subsequent fallout has been embarrassing, to say the least. During the DEF CON hacker convention earlier this month, CrowdStrike was presented with the Pwnie Award for the “most epic fail” for causing the worldwide IT outage. Company president Michael Sentonas accepted the award in person, owning up to the company’s mistake. The move was called “a public relations win and a master class in crisis management” by Jeremy Foo, CEO of public relations firm Elliot & Co.
CrowdStrike also has a long track record of growth, as evidenced by its recent results. In the first quarter of its fiscal 2025 (ended April 30), revenue grew 33% year over year to $921 million, driven higher by strong annual recurring revenue (ARR). This suggests that CrowdStrike still has gas in the tank, though we’ll have to wait until the company reports its second-quarter results later this month for confirmation.
CrowdStrike’s very public faux pas aside, a surprising number of investment banks are still bullish on the stock, and Oppenheimer is leading the way. While recognizing the short-term pressure on the stock, the analysts “remain positive on the long-term opportunity.” As such, they maintained their outperform rating and price target of $450. This represents potential upside of 71% compared to Friday’s closing price.
Furthermore, D.A. Davidson analyst Rudy Kessinger recently noted, “[CrowdStrike] will quickly regain their footing and momentum given their still strong reputation and best-of-breed cybersecurity platform.”
According to IT news website CRN, the vast majority of CrowdStrike’s existing users plan to stick around. Industry watchers cite the company’s world-class cybersecurity solutions and its subsequent response to the outage. Wall Street is clearly in agreement. Of the 52 analysts who issued an opinion of the stock in July, 49 (or 94%) rate the stock a buy or strong buy, and none recommend selling.
Finally, CrowdStrike’s forward price/earnings-to-growth (PEG) ratio, which takes into account the company’s impressive growth trajectory, is 1.88, according to S&P Global Market Intelligence. Any number less than 1 indicates an undervalued stock, but for a company like CrowdStrike that’s still young and growing explosively, this leaves plenty of room for pleasant earnings surprises.
Baidu: Implied upside of 102%
Another Nasdaq stock with a great deal of upside, according to Wall Street, is Baidu (NASDAQ: BIDU). The company is a tech titan in China and the search leader, often referred to as the “Google of China.” According to internet statistics aggregator StatCounter, Baidu dominates the internet search landscape in its home country and controls more than 52% of the market.
What gives Baidu an edge is the seemingly endless supply of consumer information supplied by its search business. This, in turn, provides the data necessary to effectively target its digital advertising, the cash cow of its business.
However, Baidu’s biggest opportunity is arguably generative artificial intelligence (AI). Its homegrown Ernie Bot 4.0, which CEO Robin Li describes as “the most powerful large language model in China,” rivals the capabilities of OpenAI’s GPT-4.
The company has been investing heavily in AI despite a weak economy, which has weighed on recent results — and therein lies the opportunity. In the first quarter, Baidu’s total revenue rose just 1% year over year to $4.4 billion, though its earnings per share (EPS) slumped 6% to $2.07. While Baidu notes that online marketing will remain the company’s “bread-and-butter” for some time to come, management believes AI will drive the company’s top- and bottom-line growth well into the future.
One Wall Street analyst believes Baidu’s future will come sooner than later. Benchmark analyst Fawne Jiang maintains a $180 price target and a buy rating on the stock. This represents potential upside of 102% compared to Friday’s closing price. The analyst notes that the first quarter is historically Baidu’s weakest in terms of digital ad revenue, but the company’s AI cloud business is helping to pick up the slack.
There’s a growing chorus on Wall Street who share this opinion. Of the 35 analysts who offered an opinion on the stock in July, 29 (or 83%) rated it a buy or strong buy, and none recommended selling.
Finally, Baidu stock is selling for a song, priced at just 12 times earnings, which factors in very little future growth. Even a slight upturn in China’s economy could jump-start digital ad spending, sending the stock higher.
Should you invest $1,000 in CrowdStrike right now?
Before you buy stock in CrowdStrike, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CrowdStrike wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $763,374!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of August 12, 2024
Danny Vena has positions in Baidu, CrowdStrike, and Microsoft. The Motley Fool has positions in and recommends Baidu, CrowdStrike, Microsoft, and U.S. Bancorp. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
2 Nasdaq Stocks to Buy Before They Soar as Much as 102%, According to Select Wall Street Analysts was originally published by The Motley Fool
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel
