Here are Wall Street’s favorite Nasdaq stocks as ‘signals around bottoms are starting to appear’

But they see “signals that tend to perk up around bottoms are starting to appear.”

They added: “But in the spirit of ‘the market prices things in before they happen,’ there doesn’t seem to a whole lot of the picture that the investment community is missing.”

If they are right, it means investors have already priced in the uncertainty of a rising-rate environment and geopolitical concerns, and the market should get back on an upward path soon.

Below is a list of stocks in the Nasdaq-100 Index that are highly rated by analysts and expected to rise in price by up to 72% over the next year.

Here’s how far the broad indexes have fallen from their all-time intraday highs:

Only the Nasdaq Composite Index COMP, -1.80% and Nasdaq-100 Index NDX, -1.57% are considered to be in correction territory, with declines of at least 10% from their 52-week intraday highs (which happen to be all-time highs for all four indexes).

The Jefferies team cautioned that it might be too soon to assume the end of last week was the worst of the pullback, but they also gave several reasons that it might be:

• “[T]he current 42-day slump since the NDX all-time high on 11/19 is already nearly as long as the tightening-caused ’18 selloff (which lasted 64 days).”
• The market is pricing in four increases to the federal funds rate by the Federal Reserve this year, which may be overly aggressive.
• Over the past seven interest-rate-increase cycles, “most of the pain tends to occur during the first month,” and the S&P 500 SPX, -1.46% and Russell 2000 RUT, -1.78% indexes tend to perform better during the first 12 months following an initial rate increase than they perform in a “typical” 12-month period.
• The 12-month performance of the S&P 500 was “positive after every single one of the last seven initial hikes.”

Screening the Nasdaq-100

The Nasdaq-100 Index is made up of the 100 non-financial stocks in the full Nasdaq Composite Index, by market capitalization. It is tracked by the Invesco QQQ Trust QQQ, -1.51%.

Among the Nasdaq-100, about two-thirds of the stocks are rated “buy” or the equivalent by a majority of analysts polled by FactSet. Narrowing further to a “conviction list,” here are the eight with at least 85% “buy” ratings, sorted by upside potential over the next 12 months implied by consensus price targets among analysts polled by FactSet:

You can click on the tickers for more about each company.

Then read Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

To the right, you can see how much the stocks have fallen from their 52-week intraday highs. CrowdStrike Holdings Inc. CRWD, -5.29% has fared worst, but is also expected by analysts to roar back the most.

Don’t miss: This sector of the S&P 500 is expected to show the fastest sales and dividend growth in 2022 and 2023