Nasdaq stocks generally equate to higher-growth, technology-dominated firms in the eyes of most investors. The index is generally more rate-sensitive than leading indexes like the Dow and the S&P 500. This growth has led to the rise of the best Nasdaq stocks to buy.
In any case, the Nasdaq contains more than 3,300 publicly listed firms and is also a stock exchange and not only an index. Its counterpart, the New York Stock Exchange, includes less than 3,000 publicly listed firms.
In 2023, Nasdaq-listed firms have grown exponentially. That growth has been primarily attributable to AI and a handful of leading firms that have contributed in an outsized manner to overall growth.
So here are the best Nasdaq stocks worth investing in as we move closer to the end of 2023.
Diamondback Energy (FANG)
Diamondback Energy (NASDAQ:FANG) is probably not the first stock you consider when discussing the Nasdaq. Generally, oil firms are more traditional and tend to be found on the NYSE. Nevertheless, Diamondback Energy is one of the best Nasdaq stocks.
The reason investors should consider buying FANG shares is pretty straightforward. The company has a solid chance to reward shareholders when it releases third-quarter earnings on Nov. 7. This could happen due to the simple dynamics of its operations and its dividend. Diamondback Energy operations are concentrated in the Permian Basin of west Texas. WTI crude, from the area, has steadily risen in price during the 3rd quarter.
That suggests that Diamondback Energy could provide strong results when it releases earnings a week into November. The firm pays a base plus variable dividend that will give extra returns for investors. The firm increased the base portion of that dividend when it released Q2 earnings.
Fastenal (FAST)
Fastenal (NASDAQ:FAST) is another non-tech Nasdaq stock to buy this month. The company recently released strong earnings that are particularly important regarding recession fears.
Fastenal operates 3,400 locations and sells products to an industrial base. That scope and broad exposure to the economic engine make it something of a recession correlate. The news is good: Fastenal just beat Wall Street’s expectations, and the earnings beat is very welcome in current turbulent markets.
Fastenal also releases its earnings relatively early in the earnings cycle. Thao makes it a stock to watch as an early gauge for investor expectations each quarter.
Sales are up 5.7% over the last nine months, and sales and earnings are a similar 5.6% during the same period. Fastenal sells primarily to a manufacturing and non-residential construction base. The growth figures send a tentative message that suggests cautious optimism for a continued recovery. The increase in earnings means that Fastenal is also one of the best Nasdaq stocks to buy.
Applied Materials (AMAT)
Reliable tech stocks like Applied Materials (NASDAQ:AMAT) are in a solid position. When I say reliable, I mean that shares, including AMAT, pay dividends and are more stable than most other tech stocks, which generally lack dividends.
That’s why Applied Materials stands out among other Nasdaq stocks that have grown more dangerous in late 2023. It’s fair to say that investors remain intensely interested in AI. Applied Materials offers secular exposure to AI and provides software and equipment for chip makers. However, it’s also fair to assert that the AI run-up has created real fear: Many firms are simply overpriced and won’t produce revenues commensurate with price increases over the last few months.
Applied Materials is far more established than those kinds of AI firms and has secular trends in its favor. The chip sector will continue to demand software and equipment as the industry matures. Consider AMAT shares for that reason and because they provide a modest income. It’s definitely one of those best Nasdaq stocks.
ASML (ASML)
ASML (NASDA Q: ASML) is similar to Applied material regarding its catalysts. It has the same positives backing it as an investment: Secular growth, dividends, and relative stability. It also holds a relative monopoly over its niche. No other firm can produce the photolithography systems it does, which are used to make chips.
The AI opportunity has just begun. What’s important to understand is that ASML’s revenues will likely contract in 2023. Not by much, but still, a contraction is likely. It has to do with rates, and that favors ASML moving forward. Rate increases are nearing the cycle peak, meaning lending will increase at some point soon. That’ll make it easier for chip firms to justify expenditures for ASML’s massive uncostly photolithography equipment.
That thinking typifies that the opportunity in ASML shares will persist for years as AI takes off.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is the final semiconductor stock on this list. It is similar to the others here. It provides software to chipmakers. Further, AVGO shares are near their low price target currently.
Investors with a year-long perspective will likely find that AVGO shares will work to their advantage. Earnings and revenues are expected to grow at healthy rates, es and percentages have a relatively low beta of 1.13. In other words, Broadcom shares are likely to preserve capital in the worst-case scenario while being more likely to grow overall.
Broadcom recently signed a deal with Google (NASDAQ:GOOG, GOOGL) to strengthen generative AI cloud security. Broadcom’s Symantec arm will work to assess emerging threats about generative AI and enterprise. Demand for enterprise-level cybersecurity is bound to rise as more large companies add AI functionality. Those firms will be willing to shell out dollars for the added security, giving Broadcom future sales streams.
DexCom (DXCM)
DexCom (NASDAQ:DXCM) sells diabetes monitoring equipment that has grown in demand, pushing the stock higher.
In Q2, DexCom’s sales grew by 25%, reaching $871.3 million. It’s expected that DexCom will increase by 20% between 2023 and 2023, which is part of why its shares have so much upside built in.
Let’s start with the defensive reasoning behind investing in DXCM shares currently. Healthcare stocks tend to do well in bear markets as a general rule. People with diabetes require constant glucose monitoring that persists no matter the economic headwinds.
There are also significant growth catalysts for DexCom. One in three American adults could have diabetes by 2050, according to previous data, and the prevalence of diabetes is increasing. Those statistics are scary because of the health implications at large. That said, DexCom stands to benefit from the tree, and its shares should grow as a result. The company is well-funded and reported over $3.6 billion in liquid reserves at the end of Q2. Thus, investors should not be worried, not that DexCom produces losses anyway.
Cisco Systems (CSCO)
Cisco Systems (NASDAQ:CSCO) will buy Splunk (NASDAQ:SPLK). The announcement has done little to Cisco’s stock but should add value to the firm overall. Adding Splunk is expected to add $4 billion in annual recurring revenue to Cisco Systems. Cisco also expects synergies to occur because of the deal. That is code speak for headcount reductions. In turn, investors should expect reduced expenses in the future for Cisco.
The acquisition isn’t expected to harm Cisco Systems materially. Buybacks are an essential consideration for CSCO shareholders. The IT firm is not on the growth side of tech. Instead, it’s firmly entrenched in the stable and reliable side of tech that is less exciting but more prone to preserve capital. Its dividend is essential, and management must telegraph zero disruption to such programs to sell the acquisition to shareholders. If the deal can clear regulatory scrutiny, it should add to Cisco Systems meaningfully.
On the date of publication, Alex Sirois 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.