Good Startup Companies To Buy Stock In
Tech stocks delivered an uncharacteristically sluggish performance in 2022. The Technology Select Sector SPDR ETF (ticker: XLK), a popular exchange-traded fund, lagged behind the S&P 500 by about 10% last year as investors rotated from growth stocks to value stocks. For more than a decade, brief periods of tech sector underperformance have consistently been long-term buying opportunities, and tech stocks have once again tipped back toward outperformance so far in 2023. Inflation and interest rates remain headwinds for tech stock valuations in the near-term, however, making stock selection critical.
good startup companies to buy stock in
Apple produces the iPhone, iPad, Apple Watch, Mac computers and other personal computing devices. Its lucrative services segment includes its App Store, Apple Music, iCloud and licensing businesses. Analyst Angelo Zino says Apple's ecosystem, customer retention rates and growing total addressable market creates upside for Apple shares. Zino says Apple has a track record of impressive execution, an attractive capital allocation strategy and stable free cash flow generation. He projects revenue will decline 1.8% in fiscal 2023 but will rebound to positive 8% in 2024. CFRA has a "buy" rating and $165 price target for AAPL stock.
Microsoft is the world's largest software company that is best known for Windows, Office and Azure cloud services. Analyst John Freeman says Microsoft's transition to a cloud-based business model has been a tremendous success, and offerings such as Office 365, Dynamics and Teams have gained major traction. Microsoft's Azure infrastructure cloud services may be the crown jewel of its cloud business, but the company also generates cloud-based revenue from LinkedIn, Bing and Xbox Live. Freeman says Microsoft also has "tremendous potential" with OpenAI's ChatGPT artificial intelligence chatbot. CFRA has a "strong buy" rating and $317 price target for MSFT stock.
Nvidia designs and sells high-end graphics and video processing chips used for desktop and gaming computers, workstations, and other advanced computing servers and supercomputers. Not only is Nvidia one of the best-performing stocks in the entire market in the past 15 years, its year-to-date gain of 63.5% through March 3 is the best performance of any stock on this list so far in 2023. Zino says he is bullish on Nvidia's data center momentum, its opportunities in the central processing unit, or CPU, market and its investments in generative AI. CFRA has a "buy" rating and $250 price target for NVDA stock.
Visa is a global credit card leader and operates the world's largest retail electronic payments network. Analyst David Holt says Visa's business model is insulated from cyclical economic downturns and changing consumer trends. Holt says Visa's diversified exposure to several different payment categories allows it to generate sustainable and reliable earnings growth over time. In addition, adjacent payment verticals and new use cases could be growth sources. He projects 8.5% revenue growth in fiscal 2023 and 11% revenue growth in fiscal 2024. CFRA has a "buy" rating and $263 price target for V stock.
Mastercard is another leading credit card and digital payments specialist and is the second-largest global payment processing company. Like Visa, Mastercard is relatively insulated from economic volatility. Holt is bullish on Mastercard's exposure to trends such as remittances, virtual cards and commercial point-of-sale payments. In addition, an ongoing recovery in cross-border payments could be a positive catalyst, and Holt says Mastercard's capital-light business model generates operating leverage and impressive earnings growth. He says Mastercard is a long-term winner from the secular shift from cash and check payments to digital payments. CFRA has a "buy" rating and $415 price target for MA stock.
Cisco Systems provides networking, cloud and cybersecurity hardware and software solutions. Cisco shares also pay a 3.2% dividend, the highest of any stock on this list. Analyst Keith Snyder says the Wi-Fi 6 upgrade cycle and global 5G deployments generate bullish tailwinds for Cisco's demand. While component shortages may continue to weigh on near-term growth, Snyder says supply disruptions should subside in early fiscal 2023. He says Cisco is well positioned to continue to benefit from a global rise in bandwidth consumption, cloud computing and data center usage. CFRA has a "strong buy" rating and $60 price target for CSCO stock.
Accenture is a global information technology services firm that specializes in consulting and outsourcing. Holt says Accenture has a loyal client base, a solid balance sheet and a long track record of peer-leading earnings growth. Exposure to Russia and foreign exchange headwinds have weighed on that growth in the past year, but Holt says Accenture's underlying business remains strong. He says Accenture is a long-term market share gainer, and roughly $7 billion in capital returns in fiscal 2023 will also help support the stock. CFRA has a "strong buy" rating and $333 price target for ACN stock.
Salesforce is the world's largest provider of cloud-based customer relationship management, or CRM, software. Freeman says Salesforce is one of the most disruptive, innovative software companies in the world, yet its stock is trading at an historically low valuation. He says Salesforce is the largest winner from cloud migration, and he anticipates the company will continue to expand its roughly 30% share of the CRM market. Freeman projects the company's sales and service clouds will continue to grow revenue in the mid-teens percentage range. CFRA has a "strong buy" rating and $256 price target for CRM stock.
Adobe produces creative content software and other applications used for marketing and e-commerce. After a rough 2022, Adobe has continued to lag so far in 2023. The stock is only up 2.2% through March 3, but Freeman says the weakness is a buying opportunity. He says Adobe has a dominant share and significant competitive advantages within key content creation markets. In addition, high-margin Document Cloud sales have grown to 14% of Adobe's total revenue, boosting profitability. Finally, Freeman says Adobe shares are trading at a valuation discount to historical levels. CFRA has a "buy" rating and $394 price target for ADBE stock.
Shares of microprocessor and graphics semiconductor stock Advanced Micro Devices are up a whopping 3,296% over the past decade, but Zino says there's still more room for upside. He says the ramp up of the company's next-generation EPYC processor will improve AMD's share of the data center CPU market. In addition, he says new product launches will help expand gross margins in the second half of 2023 and beyond. Zino projects flat revenue growth in 2023 but a rebound to at least 20% growth in 2024. CFRA has a "buy" rating and $90 price target for AMD stock.
It can be challenging to offer a precise definition of a startup: It can be a business creating a new product or service under conditions of extreme uncertainty, or a company aiming to solve a problem where the solution is not obvious and success is not guaranteed.
However you define a startup, it used to be that you needed both wealth and good connections to invest in them. This is no longer the case, however, and average investors can easily grab a piece of an exciting startup opportunity using crowdfunding sites.
Ordinary people can invest in startups via crowdfunding sites. Startup investing platforms offer a curated selection of companies, and require varying minimum buy-ins. Major players in the crowdfunding startup space include:
AngelList is another leading startup investing platform, but it only admits accredited investors with incomes of at least $200,000 ($300,000 if married) or net worth of at least $1 million, excluding their primary residence. Minimum buy-ins on AngelList are at least $1,000.
When you invest in a startup via a crowdfunding site, you enter into an investment contract with the company. Broadly speaking, there are four different kinds of investment contracts, each of which offers different ways to make money from your investment:
How you approach startup investing will be unique to you and your financial situation. Experts recommend doing plenty of research before putting your money on the line. You should be able to answer these questions before making a startup investment:
Before we can discuss how to find the best startups to invest in, we need to talk about the risks and rewards of investing in startups. Why should you invest in a startup? What makes this type of investment different from investing in a traditional asset like stocks or bonds?
Investing in a startup is different from traditional assets because a stock or a bond is a public investment, whereas a startup is a private investment. Investing in a private asset is an excellent way to diversify your investment portfolio.
What is SaaS? SaaS stands for Software as a Service. Essentially, SaaS companies allow you to access an application or software over the internet instead of installing and maintaining it on your computer or network. This model has skyrocketed in popularity in the last decade, and it shows no signs of slowing.
The possibilities for tech and SaaS companies and products are endless, leaving plenty of room for new startups to come into the market and make an impact. However, this endless realm of possibilities sometimes creates false opportunities.
Investing in retail is always risky since there is quite a bit of overhead cost associated with this industry. Startups will need to account for warehousing, shipping, and other supply chain issues. Hiccups with inventory can spell trouble for a retail or eCommerce startup.
The next category of startups you may want to consider are energy startups. Renewable energy has been a part of the international conversation for decades now. Companies looking to solve the global energy crisis stand to gain financial winnings, fame, and accolades. 041b061a72