The market struggled in 2022 as the Federal Reserve raised interest rates seven times to battle inflation. Despite lower inflation in October and November, many economists anticipate the U.S. central bank to boost rates again this year, with many experts expecting a recession in 2023.
Given the headwinds, the NASDAQ index has plummeted over 33% year to date, and some quality Nasdaq firms may be trading below their intrinsic values due to the decrease.
Many investors may use the latest pullback in the stock market as an opportunity to pick up some of the best NASDAQ stock picks for January 2023 as long-term investors may benefit from a well-diversified portfolio of equities across various industries, and below Finbold has listed five of them.
Tesla (NASDAQ: TSLA)
As of December 28, Tesla’s (NASDAQ: TSLA) stock has reached the point where it is technically the most oversold it has ever been since the company went public 12 years ago. TSLA has had a price decline of 60.2% over the previous three months, making it the stock that has performed the worst relative to the S&P 500 index during that time.
The price of Tesla stock skyrocketed during the pandemic, and it seems unlikely that it will give up all of its COVID-era profits just yet. If you had purchased your shares just before the pandemic was proclaimed on March 11, 2020, you might have paid $40.53 per share instead of the current price of $113 per share.
Full-time trader and CEO and Founder of Eight Global, Michaël van de Poppe, highlighted that a ‘relief rally is around the corner’ and that it is ‘probably someone closing shorts and reversing trade.’
“TSLA continuing the bounce as it’s currently trading at $117, which is 12% higher than the recent low. Needs more strength, but if we keep on getting the momentum today & tomorrow -> good weekly and setting up for more upside to $170. Still knife catching.”
Moreover, the first Tesla Semi full-size trucks were delivered in December. Given that the EV “has triple the power [of] any diesel truck on the road right now,” as TSLA puts it, going 500 miles on a single charge with a full load, it has the potential to be a game-changer for the EV company.
United Airlines (NASDAQ: UAL)
Morgan Stanley, known for being one of the most pessimistic firms on Wall Street, has identified United Airlines (NASDAQ: UAL) as a top airline option.
Ravi Shanker, an analyst at Morgan Stanley, noted a number of positive triggers, including a comeback in international travel as well as a new deal that United inked with its pilots.
Shanker continued by saying that the airline’s, “earnings recovery out of the pandemic has kept pace with, if not led, peers,” and that widespread fears about the company’s profitability have been put to rest.
In addition, analysts at Cowen have said that UAL stock is their top selection among airline companies. They cited the company’s substantial exposure to international flights as the reason for their judgment.
Coinbase (NASDAQ: COIN)
Coinbase (NASDAQ: COIN), America’s biggest crypto exchange, seems to be closing the year on a low note, with declining sales and profitability. Coinbase’s stock has reached an all-time low this year, trading in the $31.83 – $49.85 band during the past month, and it is presently trading around the lows of this range.
This closes off a horrific 2022 for Coinbase investors, with the company’s price down about 87% year so far and over 23.19% in just the last month.
Nonetheless, several prominent investors have lately expressed faith in the business, and the exchange has performed significantly better than many others in the crypto field, particularly mining corporations. Ark Invest, directed by Cathie Wood, maintained its strategy of purchasing Coinbase stock, adding a total of 296,578 Coinbase shares to its exchange-traded funds (ETFs).
If the cryptocurrency market can regain momentum in 2023, investing in Coinbase shares might yield rewards throughout the year.
Rivian (NASDAQ: RIVN)
Rivian (NASDAQ: RIVN) had a challenging year in 2022, but 2023 may be a turning point for the company as supply networks recover from the effects of the pandemic. Rivian could thrive in 2023 if it can ramp up its production effectively.
Ramping up car production is difficult. It’s not going to be simple to make this firm a major producer of these vehicles; it’s going to take a lot of money and time. The good news is that the company does have a lot of money; it has $14 billion in cash and equivalents, which means it has enough money to support itself managerial activities until at least 2025. Therefore, in reference to that, it has a solid backing there.
There will be a massive movement toward electric vehicles in the automotive sector as the globe goes in the direction of more environmentally friendly alternatives. For instance, the EV industry in the United States set new milestones in 2021, with light electric vehicle sales exceeding 607,600 units—approximately 83% higher than in 2018.
Digital World Acquisition Corp (NASDAQ: DWAC)
Trump SPAC Digital World Acquisition (NASDAQ: DWAC), which is taking Trump’s social media company and Truth Social app public, confirmed it extended the date it has to complete a business combination to March.
The stock price has seen both an increase and a decrease depending on how investors view Trump’s exclusive usage of the platform. Due to the ongoing investigations being conducted by the DOJ and SEC, it is now difficult to determine whether or not the merger will take place.
However, industry insiders are certain that the merger will be finalized, and this makes the future of DWAC in 2023 somewhat more promising. After many months of delay, investors in the blank-check acquisition business finally got around to voting on whether or not to grant DWAC more time to close a transaction one month ago.
For the time being, DWAC has been granted the extension it needs to assist Truth Social in being publicly traded. It is in Trump’s financial interest to continue making that commitment until the merger is successfully completed. Therefore, it would seem that the forecast for DWAC, Truth Social, and Trump in 2023 could be seen as rather optimistic at this point.