Do you have $500? These 2 growth stocks are good buys during the market sell-off
We may be acting like the unimaginable is happening, but the current stock market crash is nothing new. In fact, the reference S&P500 the index falls by at least 10% at least once every two years on average.
The important thing to remember is that every previous crash has been erased by a subsequent bull run. No one knows if stocks will fall further before rallying again, but recovery is still near for stocks whose underlying businesses are doing well.
Duolingo (DOUOL 34.02%) and pubmatic (PUBM 16.16%) recently released exceptional first-quarter results that didn’t get the attention they deserved. These two are likely to top the broad market when it recovers and you don’t need to be rich to get in on the action. At recent prices, any amount of money, even $500, is more than enough to load your portfolio with these promising growth stocks.
If you harbor a desire to learn a foreign language or just have school-aged children, you’re probably already familiar with this company’s increasingly popular smartphone app. Duolingo’s language learning gamification combined with artificial intelligence (AI) algorithms that constantly refine lessons have made it a top-tier educational app.
Most adults use Duolingo to brush up on a foreign language before visiting a new country, but that’s not where the money is. I’m excited about this stock as educational institutions around the world increasingly depend on Duolingo to power their programs.
Long-term investors love Duolingo because it’s constantly improving. Its AI-powered algorithms relentlessly weed out lessons that turn subscribers away while promoting the lessons that work best. With the only language-learning courses successfully employing AI today, the company’s lead over the competition seems easily defensible.
Getting native English speakers to spend their hard-earned money on language education is an uphill battle compared to selling teaching English as a Second Language (ESL). Perhaps that’s why Duolingo’s most important growth engine, the Duolingo English Test, is consistently overlooked by investment banking analysts on Wall Street.
The Duolingo English test is increasingly accepted as a standardized measure of communication skills by US universities and employers. Learners don’t necessarily need to subscribe to Duolingo premium to succeed, but why take the risk when your professional future depends on a successful outcome?
Duolingo has posted record quarterly earnings twice since its stock peaked last fall, but the stock is still down more than half. With a competitive edge growing day by day, investors can reasonably expect this stock to eventually recover and reach new heights.
The Internet as we know it wouldn’t exist without advertising, but the way advertisers buy their inventory is rapidly changing thanks in part to this company. Pubmatic operates a sell-side platform that connects publishers with ad buyers who bid in real time to access their available ad inventory.
Shares of Pubmatic soared after the company’s public debut in late 2020, but the stock has fallen about 68% from its peak in early 2021. That’s more than a unsurprising as first quarter revenues climbed 25% year over year, even though far fewer people were stuck at home all day than at the start of 2021.
Pubmatic’s bottom line even remains squarely in positive territory and the impending loss of browser cookies won’t be much of an issue since Pubmatic does not rely heavily on advertisements that appear in Internet browsers. These days, Connected Televisions (CTVs) are where the big bucks are, and Pubmatic is succeeding on that front. CTV’s first-quarter revenue jumped more than 400% year over year.
Pubmatic does not have the size of its main competitors, Metaplatforms and Alphabet. but it still has a strong advantage over these titans of digital advertising. Publishers and advertisers know they won’t end up competing with any of Pubmatic’s other businesses for your attention.