3 Nasdaq stocks are likely to produce big gains

The widely followed Nasdaq-100 index has risen 13 of the last 14 weeks, a huge move that dates back to Halloween. The AI ​​boom and hopes of multiple Fed rate cuts this year have pushed the tech-oriented benchmark to record highs. Although the Nasdaq’s price-to-earnings (P/E) ratio has risen more than 30 times (from 24 times a year ago), traders continue to bid up its components and buy any semblance of a dip.

A major catalyst in recent days has been corporate earnings reports. The strong fourth quarter performance and outlook of several Nasdaq-100 companies has been commonplace. Amazon.com and Meta Platforms have produced some of the biggest fireworks. Even some non-tech names like industrial machinery supplier Paccar and snacks maker Mondelez International are getting in on the action. In a couple of weeks we will find out if NVIDIA’s release can keep the Nasdaq-100 rally alive.

Luckily for traders, the fun may be far from over.

More than half of Nasdaq-100 companies have yet to release fourth-quarter data. This leaves plenty of opportunities to take advantage of short-term swings related to upcoming conference calls. But with over 50 CEOs taking to the podium in the next 30 days, how can you manage this watchlist?

One approach is to focus on stocks that have historically had the greatest post-earnings reactions. Scrolling through stock charts can reveal big moves, but there is a more efficient way. Volatility data such as beta and standard deviation indicate how much a stock fluctuates relative to the market or its own history, respectively. Adding them to a list and sorting them can be a quick way to see high-risk candidates.

Here are some examples of Nasdaq-100 stocks with high beta and high standard deviation that are poised to experience volatile earnings movements in the near future.

When does DexCom report?

DexCom, Inc. NASDAQ:DXCM will announce fourth-quarter 2023 earnings after the close on Thursday, February 8. The continuous glucose monitoring (CGM) systems specialist is expected to report earnings per share (EPS) of $0.43, which represents growth of 26% over the prior year. It has beaten Wall Street’s EPS estimates for five consecutive quarters, including a resounding beat last time around.

Thanks to increased global awareness of the benefits of real-time CGM devices, third-quarter EPS came in at $0.50, beating the Street estimate of $0.34. The stock soared 10% on more than three times normal volume and hasn’t looked back since. DXCM is up more than 50% from its October 2023 low, but its chart suggests further gains are ahead. A recent “life cross” indicates a long-term bullish trend and makes the recent pullback to $132.40 an attractive pre-earnings entry point.

Will DoorDash Beat Fourth Quarter Earnings?

DoorDash, Inc. NYSE:DASH has been one of the most interesting Nasdaq stocks to trade over the past year. After missing fourth-quarter 2022 earnings by a mile, the delivery services platform has topped analysts’ expectations in terms of earnings per share in two of the past three quarters. A much smaller-than-expected third-quarter loss, linked to strong order volumes, caused the stock to gap 16% on Nov. 2.

It has been trending upward ever since, with the market anticipating another strong report and profitable quarter in the second half of 2024. DoorDash is seeing its monthly active user (MAU) base increase and getting significant contributions from advertising. During the fourth quarter, it added Best Buy to its marketplace along with grocery chains Save Mart, Lucky and Food Maxx. Last month, Camping World, Golf Galaxy and The Vitamin Shoppe signed on as on-demand delivery customers.

Is MELI a good money making game?

As one of the most volatile components of the Nasdaq-100, MercadoLibre NASDAQ: APPLES is known for providing some post-earnings fireworks. The “Amazon of Latin America” has topped Street EPS forecasts for seven consecutive quarters. In the process, its shares have tripled from its 2022 low and look set to challenge its all-time high of $2,020.00.

MercadoLibre is experiencing growth in all three of its core markets – Brazil, Argentina and Mexico – as well as other international markets. Both fintech and credit revenues increased significantly compared to last year following the launch of new products and technologies, as well as geographic expansion. The company, which grew its active user base to 120 million, announced that it reported record Black Friday sales, with particular strength in its largest market, Brazil. Look for this to result in a “fuerte” (strong) fourth-quarter earnings report on February 22.

Before you consider DexCom, you’ll want to hear this.

MarketBeat tracks daily Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and DexCom wasn’t on the list.

While DexCom currently has a “Moderate Buy” rating among analysts, top analysts believe these five stocks are better buys.

View the five stocks here