Sellers capitulated in the bear market of 2022 by dumping high-growth tech stocks at the end of the year. Markets got rid of companies impatiently, instead of waiting for them to turn around.
Tax-loss selling pressure ended on the first trading day of the year. Investors interpreted weak job hiring figures as a sign that the central bank would not raise rates by much in 2023.
In addition, the December 2022 consumer price index report suggested that inflation moderated. To increase in value, technology stocks need interest rates to stop rising. As a result, markets rose after the favorable CPI report.
To maximize returns, investors have three stocks that have positive catalysts ahead.
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Adobe (NASDAQ:ADBE) posted record fourth-quarter and fiscal 2022 revenue. Revenue from the digital media segment increased by 10% year over year. This year, the company expects total revenue of up to $19.3 billion.
In the last year, ADBE stock lost 35.3% of its value. Shares trade at a forward price-to-earnings of below 20 times. Customers need Adobe’s Experience Cloud to power their digital business. The product manages its marketing workflow.
As corporate customers cut costs while simultaneously seeking productivity gains, Adobe’s Experience Platform will give them a scalable solution. This saves them time and money.
Adobe stock is on an uptrend. It will soar in 2023 if subscription revenue grows by north of 20% a year.
Coinbase Global (COIN)
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Coinbase Global (NASDAQ:COIN) is a cryptocurrency platform. The FTX bankruptcy was one of many crypto disasters last year. Customers withdrew their assets from crypto platforms, including Coinbase.
In a filing on Jan. 10, 2023, the company said it would reduce its headcount again. It will cut its staff count by 25%, or by 950 people. This will cost up to $163 million in restructuring charges.
Coinbase reaffirmed its 2022 adjusted EBITDA within around $500 million. It also said it will meet its annual monthly transacting user and transaction revenue per user target,
COIN stock bottomed at below $40 to close at close to $50 on Jan. 13, 2023.
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StoneCo (NASDAQ:STNE) stock lost almost half its value in the last year. At a forward P/E of just three times, the deep discount is one of many catalysts for 2023.
The company has growth momentum that will continue into this year. It offers valuable financial services that will leverage its newly built distribution channels. For example, StoneCo has access to new markets like the micro merchant segment. It will increase its distribution channels, raising its growth potential.
Investors should expect StoneCo to allocate its capital in areas that add to growth. Interest rates limit the momentum. When rates peak, expect this fintech’s share price to soar.
On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Lau is a contributing author for InvestorPlace.com and numerous other financial sites. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. He shares his stock picks so readers get actionable insight to achieve strong investment returns.