The NASDAQ Composite Index lost a third of its value last year as technology and growth stocks came crashing down.
But don’t count out the index just yet.
The bellwether technology stock index has staged a strong recovery this year, chalking up a gain of 25% year to date as it enters a new bull market.
Along the way, several stocks have also rebounded strongly and hit a 52-week high.
Investor sentiment has turned positive on these stocks because of a growing recognition of their merits accompanied by a strong earnings profile.
We feature four of these US growth stocks and you can determine if they deserve a place in your buy watchlist.
Nvidia (NASDAQ: NVDA)
Nvidia is one of the largest chipmakers in the world that invented the graphics processing unit (GPU) in 1999 which led to the growth of the personal computing gaming market.
The company is now fuelling the artificial intelligence (AI) boom and is helping to fuel investments in the metaverse, an immersive virtual world that allows users to meet up and interact.
Just this week, Nvidia became the first chipmaker to reach a trillion US$ in market value as its shares soared 180% year to date to a 52-week high of US$419.38.
The company had just released a mixed set of earnings for its fiscal 2024 first quarter (1Q FY2024) results ending 30 April 2023.
Revenue was down 13% year on year to US$7.2 billion but net profit climbed 26.3% year on year to US$2 billion.
However, it was Nvidia’s forecast for its second quarter that got investors excited.
The company expects to clock in revenue of US$11 billion, far outshining Wall Street’s most optimistic revenue forecasts of US$7.15 billion.
Nvidia’s CEO, Jensen Huang, also unveiled a new supercomputer platform to help technology groups build generative AI models, and he remarked that AI is creating a “new computing era”.
Netflix (NASDAQ: NFLX)
Netflix is the market leader in streaming TV and operates a subscription-based streaming service that allows customers to watch movies and TV series.
Shares of the company hit a 52-week high of US$405 recently and are up 33.2% year to date.
Netflix also reported a mixed set of earnings for its fiscal 2023’s first quarter (1Q 2023) ending 31 March 2023.
Revenue inched up 3.7% year on year to US$8.2 billion but net profit fell by 18.3% year on year to US$1.3 billion due to higher technology and development expenses.
The streaming giant’s free cash flow, however, more than doubled year on year from US$801.7 million to US$2.1 billion.
Netflix also managed to grow its paid membership base by 4.9% year on year to hit a new high of 232.5 million.
Just last week, the company started to crack down on the rampant practice of password sharing in the US and more than 100 countries by requesting that users add a member outside their home for an additional fee.
Mercadolibre (NASDAQ: MELI)
Mercadolibre is an e-commerce player and a market leader in the Latin American region.
The company also offers an online payment platform (Mercado Pago) and a logistics solution called Mercado Envios.
Shares of the e-commerce company have soared 51.3% year to date and recently hit a 52-week high of US$1,365.
Mercadolibre has continued to post healthy growth in its latest 1Q 2023 earnings.
Revenue increased by 35.1% year on year to US$3 billion while net profit more than tripled year on year from US$65 million to US$201 million.
The company also generated a positive free cash flow of US$770 million for the quarter, reversing the free cash outflow of US$370 million a year ago.
Gross merchandise value climbed 23.1% year on year to US$9.4 billion and would have increased by 43.3% year on year if not for foreign exchange headwinds.
The total payments volume climbed 46.1% year on year to nearly US$37 billion with items sold increasing by 15.7% year on year to 309 million.
Unique active users on Mercadolibre’s platform jumped by nearly 25% year on year to 101 million.
Uber (NYSE: UBER)
Uber provides ride-hailing services, freight transport and also food delivery services via its Uber Eats service.
Shares of the company have surged 48.1% year to date and are just shy of their 52-week high of US$40.50.
Revenue grew by 29% year on year to US$8.8 billion with gross bookings increasing by 19% year on year to US$31.4 billion.
Although Uber booked a net loss for the quarter, the ride-hailing company generated a positive free cash flow of US$549 million.
Operating metrics also saw an improvement with the number of trips increasing 24% year on year to 2.1 billion in 1Q 2023.
Uber also grew its monthly active platform consumers by 13% year on year to 130 million.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.