April’s market rally may have fully unwound February’s and March’s sell-offs. However, between steep valuations and a mixed start to the first-quarter earnings season, at least some investors are rethinking things again. Another correction may well be the market’s next order of business.
Don’t sweat a steep sell-off too much. In fact, if a pullback is in the cards, it’ll be a long-term buying opportunity.
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Here’s a closer look at three names to consider buying if any sweeping bearishness reels in the recent rallies that have made them overpriced for newcomers.
Taiwan Semiconductor Manufacturing
You’re certainly familiar with chipmakers like Qualcomm and Nvidia. But did you know that semiconductor companies make little to none of their own silicon?
It’s true! Most of them outsource this equipment- and labor-intensive work to third-party contract manufacturers like Taiwan Semiconductor Manufacturing (NYSE: TSM). Indeed, despite the chip industry’s efforts to wean itself from dependence on the company, Counterpoint Research says that TSMC alone still accounts for more than two-thirds of the global foundry business.
As long as demand for artificial intelligence processing chips remains insatiable, TSMC will thrive. That’s why this ticker has made surprisingly consistent bullish progress since late 2022, when the launch of OpenAI’s ChatGPT started an AI hardware race.
There’s nothing wrong with paying a premium for a quality stock. If you can hold out for the pullback that history says is coming sooner or later, though, this ticker’s been a reliably good one to buy on a dip.
Roku
Streaming technology outfit Roku (NASDAQ: ROKU) might be one of the market’s best-kept secrets, as well as one of its most misunderstood names.
Yes, its fate and fortune are tethered to the streaming business’s; the company also operates its own streaming channel. By and large, its role means it wins regardless of which streaming services are falling in and out of favor. You only need to look at last quarter’s results to see it. Roku’s Q1 revenue was up 22% year over year, driving a 27% improvement in gross profit.
People are now engaged with their streaming tech almost like they are with their mobile phones, which is a rather resilient relationship.