Market Crash or Massive Opportunity? 7 stocks to watch

Every investor is well aware of the volatility that has plagued the markets in recent weeks. Those same investors are trying to understand whether a market crash or a massive opportunity is ahead. While no one knows with 100% accuracy, there are several stocks that investors should watch to better understand the future direction of the market.

These stocks represent certain narratives and general trends that move the markets. Certain share classes and categories will outperform during this period of volatility. Investors can better position themselves by understanding these broad movements and their repercussions.

Whether the current period is a market crisis or a massive opportunity remains to be seen. As I write this, S&P 500 it is growing by almost 2.5% per day. It fell almost as much as the day before. Recession fears, employment data, Federal Reserve rate cut expectations and more are making the market extremely volatile. Current volatility is an extension of general volatility that has increased in the modern era. That said, let’s understand current volatility through the lens of seven stocks to watch.

Nvidia (NVDA)

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Plan for continued volatility in Nvidia (NASDAQ:NVDA) stock. The company – arguably the biggest in the world – is due to release earnings on August 28. In 2024, Nvidia shares appreciated by as much as 185%. They have corrected in the past month, falling nearly 20% as fears about artificial intelligence reach an all-time high. YTD gains are now around 110%.

The central theme of future volatility over the next few weeks will be the release of Nvidia’s upcoming Blackwell chips. There is much controversy surrounding this delay. When the news was released, some analysts reacted negatively, while others argued that Nvidia’s dominance made any delay a non-event. Days after the rumor began to spread, Nvidia categorically denied any such problems.

Instead, Nvidia noted that chip sampling has begun and an acceleration of H2 production is on track. The conflicting claims created a period of market intrigue over the next few weeks ahead of the August 28 earnings. Nvidia looks set to continue its comeback given its claims about Blackwell production and the fact that many analysts are optimistic if there are any delays. appear.

Wolfspeed (WOLF)

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Small cap stocks incl Wolfspeed (NASDAQ:WOLF) deserves investors’ attention at this time. The Fed’s upcoming September pivot should catalyze small-cap stocks again, as it did in July.

Wolfspeed is a small-cap firm that didn’t particularly benefit from July’s rotation into small-caps and away from large-cap tech. However, due to the likely rate cuts in September and its unique business, Wolfspeed is a buy stock.

Wolfspeed is a leader in the growing high-tech industry. The company is a market leader in silicon carbide (SiC). SiC is a material with superior properties to the silicon commonly used in the semiconductor industry. Silicon carbide has higher thermal conductivity and can operate at higher voltages and temperatures than traditional silicon.

This has led many to believe that Wolf Speed ​​is a massive emerging opportunity with a first-mover advantage through its leading position in the material. Silicon carbide chips have applications in growing markets including electric vehicles, 5G, IoT and more. While it’s easy to see Wolfspeed’s appeal given these facts, losses are mounting at the firm. It will benefit greatly from cheaper borrowing soon, so for bold investors, Wolfspeed could be a huge opportunity.

Coca-Cola (KO)

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Unsurprisingly, Coca cola (NYSE:KO) stocks have thrived over the past month as fears of a market crash have grown. The company has become one of the most well-known defensive positions and a bastion of safety during market turbulence. The winning machine seems to withstand any storm long or short.

The latest storm over the past month saw KO shares rise 9%. Despite the strong performance, investors have reason to believe KO stock won’t rise much further. I say this because one technical indicator, the relative strength index, indicates that KO stock is currently overbought. The so-called RSI is considered to indicate overbought territory at a level of 70 or higher. Coca-Cola stock currently has an RSI above 97.

This is a reasonable indication that the markets will soon move away from Coke, or at least less will move into Coke. Although KO stock still has some way to go before it hits its consensus price target, suggesting upside, those waiting for prices to fall will benefit from higher dividend yields. The current RSI suggests that it might be a better option.

Apple (AAPL)

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Apple (NASDAQ:AAPL) will continue to be one of the most exciting trades in the stock market as it trades AI. The stock has performed very well since the June 10 introduction of AI, called Apple Intelligence. That was, until the last few weeks, when the larger AI game lost steam.

While Apple is late to the game and the timing is probably unfortunate, there’s a lot to like about AAPL at $210. First, the consensus price for the stock is near $240, with some analysts believing it could reach $300.

All these advantages are based on the successful launch of Apple Intelligence. Apple intelligence will require the release of iOS 18 in September. However, Apple Intelligence will not be available at the launch of iOS 18. Instead, it will be available with subsequent iOS 18 updates.

Users will need an iPhone 15 Pro or better to access these AI features. Apple may charge $20 for access to the most advanced AI features.

The point here for investors is that Apple will likely receive a boost in revenue from iPhone upgrades, Apple Intelligence subscriptions and an increase in consumer spending as rate cuts are enacted.

UFP Technologies (UFPT)

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UFP technologies (NASDAQ:UFPT) is another small-cap stock to watch. As mentioned earlier in this article, there is continuous turnover in small-cap stocks. My colleague Joel Baglole noted that the rotation has lost momentum since early August, but that UFP Technologies is one of the more interesting small-cap plays.

The stock is up nearly 650% over the past five years and more than 82% in 2024 alone. The company recently released earnings that once again beat expectations. Revenue and earnings per share both came in much better than expected.

The medical device company is very well positioned to grow rapidly. UFP Technologies has been on a three-company acquisition spree in July, ending with its July 16 acquisition of Marble Medical.

Those acquisitions — combined with lower borrowing rates — could catalyze the company into another level of growth, raising prices in the process, making it one of the stocks to watch.

Palantir (PLTR)

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Palantir (NYSE:PLTR) will continue to be one of the most interesting firms to watch as the next few weeks on the stock market unfold.

Investors are already aware of how quickly Palantir has evolved into a profitable firm and one that is rooted in the enterprise AI opportunity. A lot has been said about this, but the point is that Palantir continues to prove the doubters wrong.

The company has been profitable for over a year and continues to be. It is also rapidly emerging as a commercially oriented AI firm, providing an on-demand AI platform to the private sector. Additionally, Palantir is a well-known public company with close ties to the government. Those ties are only getting stronger as the company just announced a partnership with Microsoft (NASDAQ:MSFT) to bring AI to government agencies.

That sent Palantir shares up 10% in intraday trading. Palantir is highly likely to continue to rise among the stocks to watch given its strengthening public ties and rapid growth from a commercial standpoint.

Pinterest (PINS)

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Investors should avoid Pinterest (NASDAQ:THOSE) in the coming weeks and months. The rationale for this statement is relatively simple and is tied to recent Q2 earnings results.

The results themselves were actually strong, with Pinterest revenue coming in 1% higher than anticipated. However, markets are always forward-looking. Unfortunately, Pinterest is projecting Q3 growth in the 16 to 18% range. Analysts were looking for 19% at the consensus level.

So it’s clear that Pinterest will have a lot of work to do this quarter to try to calm fears of slowing growth. That’s not the only problem facing the firm, nor the only reason to think the stock will trade sideways or worse.

Pinterest shares are more expensive than all but 8% of the competition on a P/E basis. The P/E ratio is currently at its 10-year average. However, Pinterest doesn’t look particularly strong right now, so I see no reason to assume that investors will want to buy it at these prices.

At the time of publication, Alex Sirois did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publishing Guide.

At the time of publication, the responsible editor had (neither directly nor
indirectly) any positions in the securities mentioned in this article.