So far, investors have had a difficult time in 2022. This is especially true for the tech and internet industries. While the S&P 500 has declined 13.5% thus far, the Nasdaq 100, which comprises the top 100 stocks by market capitalization on the Nasdaq exchange, has plummeted 22%. Many high flyers during the last decade have suffered significant losses as a result of this decline. Now may be an excellent time to buy more of your favorite tech stocks if you have cash available.
Here are two excellent Nasdaq 100 equities to look into buying in May.
Autodesk (ADSK 2.87%) is a software firm that provides products for a variety of sectors, including architecture, construction, engineering, and media/visual effects. AutoCAD and Revit are its main offerings. AutoCAD is a vintage computer-aided design (CAD) program that was launched in 1982 and is still used by many engineers and designers today. In fact, even though Autodesk is encouraging businesses to go beyond the basic AutoCAD product, the industry is growing nicely for the firm, with revenue increasing 14% last fiscal year to $1.2 billion.
Revit is a 3D design program with an emphasis on developing information modeling standards called BIM. BIM is a global standard that architects, construction firms, and governments are adopting in order to better and more efficiently create 3D models while working on projects. The norm is growing popularity throughout the world; however, only a few countries have more than 50% penetration on global projects.
What does this signify? If the trend of product BIM usage continues, Revit should receive a significant boost to its bottom line since it has a more than 50% market share in BIM software. The tailwind can be tracked in Autodesk’s AEC business segment, which includes BIM. Last fiscal year, the sector generated $1.96 billion in revenue, up 19% compared to the previous year (YOY).
Autodesk has a number of long-term software projects that are in the early phases, including Autodesk Construction Cloud and Fusion 360. According to management, both products are growing fast but aren’t relevant to the business right now.
Autodesk is currently valued at $42 billion, with the stock dropping 31% this year. This fiscal year, Autodesk expects to generate around $2.17 billion in free cash flow. That results in a forward P/FCF of 19 for the stock, which is below the market avg. With robust growth and a big opportunity with Revit, as well as new software offerings, Autodesk stock appears to be a wonderful investment right now.
2. Match Group
Match Group (MTCH 0.11%) is the maker of a variety of popular dating apps and internet sites. Tinder, Match.com, Hinge, Pairs, and other similar services are all owned by the firm. The tide of online dating has been rising in acceptance over recent decades, allowing Match Group to take part in it. And with fewer than 100 million active monthly users throughout its services at of the end of Q1 2019 (that’s less than one-tenth the size of Instagram), Match Group has a lot of expansion potential into new markets during the next decade
Match Group’s revenue increased 20% year over year in Q1. Adjusted operating income grew 19% yearly to $273 million, as the company experienced strong growth across a variety of its services (18 percent growth from Tinder, 22 percent from the rest of its brands).
The market has taken fright with Match Group stock, selling it off by 44% in 2022. This might be for a variety of reasons, but one reason could be soft revenue projections for the second quarter. Management now forecasts revenue to increase at 13%-14% YOY in Q2 owing to foreign currency fluctuations and the Ukraine/Russian conflict.
However, if you consider the long-term trend and realize that internet dating is a fast-growing industry, it’s easy to overlook these short-term currency problems and get bullish on the stock. The stock has a market capitalization of $22 billion. With solid growth prospects and a dominant position in online dating, Match Group is an easy bet right now.