Why is earnings season the perfect time to make your move?
Earnings announcements lead to market volatility. So, this allows investors to bag top-quality stocks at a discount. The ongoing mixed earnings season has led to a dip in several stocks. And, while it could be a temporary reaction, it can allow you to load up your portfolio. Now is the time to start looking for long-term stocks to buy on dip.
Remember that temporary market volatility is just that, temporary. It could be an immediate reaction to the numbers or the guidance and will cool down in the long term. Some of the blue-chip stocks have seen a dip after the recent results announcement.
Let’s dive into the seven long-term stocks to buy on the dip.
Amazon (AMZN)
There are multiple reasons to add Amazon (NASDAQ:AMZN) to your portfolio but one of the biggest reasons is the dip in the stock after the results. The company missed revenue expectations and reported a lower guidance which led to a disappointment in the market.
Amazon reported a revenue of $147.98 billion and an EPS of $1.26. The Amazon Web Services (AWS) revenue stood at $26.3 billion while the advertising revenue missed expectations and came in at $12.8 billion.
The management added that consumers have become cost-conscious and are choosing cheaper products which will lead to a dip in revenue in the third quarter. The weaker-than-expected guidance impacted the stock which is down 7% over the past month and is exchanging hands for $166.24, much lower than the 52-week high of $201.
Amazon’s long-term picture looks attractive and it continues to hold a large market share in the cloud computing segment. AMZN will bounce back as consumer spending improves, so plan to buy and hold for the next five years.
Nike (NKE)
Nike (NYSE:NKE) doesn’t need any introduction since the brand is a popular name in the sports industry. The legacy business has had a tough year with its stock down 30% year-to-date (YTD). This dip is due to a drop in sales, but I believe Nike has the power to bounce back.
The company’s fiscal 2024 results saw a modest 1% year-over-year (YOY) rise in sales and generated $51.4 billion in revenue. Its management is aware of the lackluster sales and is planning a comeback. It has increased the marketing and advertising budget by 6% and is looking to benefit from the Paris Olympics as a catalyst. Thus, Nike has worked on an ad campaign around it.
Trading at $73, the stock has steadily dropped since January and is much lower than the 52-week high of $123. This is a long-term buy and hold in the dip. I am certain Nike has the potential to make a comeback and is a dividend-paying stock with a yield of 2%.
Airbnb (ABNB)
Online lodging marketplace, Airbnb (NASDAQ:ABNB) hasn’t had a good year so far despite a strong start. ABNB stock is down 7% in the past six months and is trading for $127.88 as of this writing. Rising competition and the growing housing inventory have caused trouble for the business. However, its fundamentals are strong.
In the first quarter, it saw a 17% YOY jump in the active listings, and it started to expand into less popular markets. It saw impressive growth in the gross nights booked, and the total revenue jumped 18% YOY. The company had the most profitable first-quarter ever but it didn’t reflect on the stock price.
Airbnb is set to report results next week, and a weaker guidance could lead to a dip in the stock. I believe Airbnb is a solid business and an ideal long-term player. Despite competition, the company has the potential to dominate the market and has performed exceptionally well over the past year. The pent-up travel demand and ongoing summer holidays could boost the company’s financials.
McDonald’s (MCD)
When McDonald’s (NYSE:MCD) is lagging in the market, you do not need to worry about the company. Instead, you need to start worrying about the economy. MCD has understood that higher costs are no longer going to work and with cost-conscious consumers, McDonald’s will have to derive a plan to bounce back.
The company has launched the $5 adult happy meal which has been a success and is being extended. However, the recent quarterly results were disappointing. It missed earnings and revenue estimates. The company saw a revenue of $6.49 billion and an EPS of $2.97, the revenue was flat YOY. Also, it saw a dip in same-store sales.
This isn’t something that happens with McDonald’s often, but the inflation has hurt its business. The stock is down 9% over the past six months and is exchanging hands for $268. I am certain McDonald’s will see better days as consumer spending improves, until then you can enjoy the dividend yield of 2.49%. It continues to remain a tasty restaurant stock for the long term.
Advanced Micro Devices (AMD)
Nvidia’s (NASDAQ:NVDA) biggest competitor and a strong player in the artificial intelligence race, Advanced Micro Devices (NASDAQ:AMD) is making every attempt to win the market.
The company reported impressive numbers for the second quarter with a revenue of $5.8 billion and earnings per share of $0.69. The revenue saw a 9% YOY jump while it swung from an operating loss a year ago to an operating profit in the second quarter. AMD saw a record growth in the data center revenue with a jump of 115% YOY.
Despite the strong fundamentals, AMD stock hasn’t been able to soar higher. It is exchanging hands for $133 and is down 25% in the past six months. AMD’s achievements may not look as bright if compared with Nvidia. But if you look at the company independently and the progress it has made, AMD does shine amongst the competitors. The dip is a chance to buy this AI stock.
The management has raised the full-year revenue guidance for the AI data center GPUs to $4.5 billion, driven by the rapid adoption of its MI300 series GPUs.
SoFi Technologies (SOFI)
Fintech company SoFi Technologies (NASDAQ:SOFI) has done everything right. Yet, the stock hasn’t been able to hit double-digits since the start of 2024. Trading at $6.73, SOFI stock has dropped 25% YTD. It recently reported stellar fundamentals and saw significant growth in its user base. Its revenue came in at $599 million and saw a 41% jump in members.
I have been recommending SOFI stock for a while now but many are worried about the future of the company after a rate cut. SoFi Technologies has established itself as a very strong financial institution which doesn’t rely on a single segment for revenue.
The diversified business will keep the revenue steady in the coming quarters. SoFi Technologies has started to rely less on lending and is pivoting towards financial services products which now comprise 45% of the company’s revenue.
Despite the fantastic results, the stock price did not budge. However, I think it is a sign that you should load up on this fintech. It could double your money in the next two years.
Nvidia (NVDA)
Industry leader Nvidia (NASDAQ:NVDA) can be an excellent addition to your investment portfolio. The company holds the largest AI chip market share and is benefitting from the imbalance between the demand and supply of chips. Set to report results next month, Nvidia will be sharing how its clients profit from their AI chips.
Despite the competition, Nvidia has remained a tech industry leader, and I strongly believe its dominance will continue throughout the year. The stock has become affordable after the recent stock split. But it is down 10% over the past month due to the tech industry pullback.
While it has nothing to do with Nvidia or its fundamentals, the pullback is a chance to pounce. NVDA will report impressive numbers and beat expectations with revenue exceeding $28 billion. This could give the stock a good reason to rally. Long-term investors who held on to Nvidia have already taken home solid profits. This tech stock wouldn’t disappoint.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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