Incyte (INCY): The biopharmaceutical company expects continued revenue growth from its flagship drug Ruxolitinib after the FDA approval for additional treatments
Roku (ROKU): The TV streaming platform will benefit from multi-year agreements with entertainment giants
First Trust Nasdaq Semiconductor ETF (FTXL): Provides exposure to select semiconductor companies that offer value and growth potential
Nasdaq 100 stocks: the Nasdaq building lit up at night
Source: Shutterstock
Since the beginning of 2022, the Nasdaq Composite has fallen around 18%, while the S&P 500 Index is down roughly 10%. In other words, tech shares, which were among the darlings of the pandemic, have lost some of their appeal in the face of rising interest rates.
Wall Street is currently debating how Nasdaq shares, especially tech stocks, can be affected in a high-inflation and rising-rates environment. The Federal Reserve (Fed) is expected to raise interest rates, possibly by over 1% in the coming weeks.
For instance, CNBC recently reported, “… tech companies could be hurt the most by the Fed’s hiking campaign as investors take less risk and buy stocks with steady profits, rather than growth shares…”
On the other hand, research by BlackRock (NYSE:BLK) highlights that increasing rates are not necessarily bad for Wall Street names. Thus, it is not possible to know how the rest of the year could fare for NASDAQ stocks.
After all, the Nasdaq-100 Technology Sector Index has lost about 27% so far in the year and 18% in April alone. But the decent decline offers a good entry point in many of these fundamentally robust names.
The first Nasdaq stock of the day is Incyte (NASDAQ:INCY), a biopharma name with a market capitalization (cap) of $16.75 billion. Its flagship drug Ruxolitinib, marketed in the U.S. as Jakafi, is used to treat myelofibrosis and polycythemia vera.
Incyte announced Q4 FY21 results on Feb. 8. Revenue increased 9.3% year-over-year (YOY) to $863 million. Net income was $2.54 per diluted share, up from 68 cents in the prior-year quarter. Cash and equivalents ended the year at $2.35 billion.
Last September, Ruxolitinib was also approved for use to treat dermatitis and entered the market as Opzelura. The drug is currently in the FDA approval process to treat vitiligo as well. These additional indications for Incyte’s central product could provide a significant opportunity for revenue growth.
INCY stock is trading flat year-to-date (YTD) but has lost more than 12% over the past year. Shares are trading at 20.12 times forward earnings and 5.69 times trailing sales. Meanwhile, the 12-month median forecast for Incyte stock stands at $90.00. Interested readers could regard a potential decline toward the $70 level as a good entry point.
Roku (ROKU)
ROKU Stock Will Continue Benefitting From the TCL Partnership
Source: Michael Vi / Shutterstock.com
Next up on our list is the TV streaming platformROKU (NASDAQ:ROKU). This Nasdaq company offers streaming devices, an operating system (OS) for Smart TVs, and even the Roku Channel.
Roku released its Q4 FY21results on Feb. 17. Revenue jumped 33% YOY to $865 million. Adjusted EBITDA decreased 24% to $86.7 million. Net income was 17 cents per diluted share, down from 49 cents in the prior-year quarter. Cash and equivalents ended the year at $2.15 billion.
Roku has successful relationships with all the large entertainment giants, including a recent multi-year agreement with Amazon (NASDAQ:AMZN) Prime Video. It has also recently launched CNN+ and Discovery+, owned byWarner Bros. Discovery (NASDAQ:WBD), on its platforms.
However, declining subscriber numbers reported by Netflix (NASDAQ:NFLX) has sent chills through the media and entertainment industry. As a result of the headwinds, ROKU stock has lost 60% YTD. Shares are trading at 4.98 times trailing sales. Meanwhile, the 12-month median price forecast for Roku is at $158.
Nasdaq Stocks: First Trust Nasdaq Semiconductor ETF (FTXL)
AI. Circuit board. Technology background. Central Computer Processors CPU concept. Motherboard digital chip. Tech science background. Integrated communication processor. 3D illustration representing semiconductor stocks
Source: Shutterstock
The last discussion on Nasdaq stocks focuses on an exchange-traded fund (ETF). The First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL), provides exposure to U.S. semiconductor names. These chip companies are selected based upon three investing factors: volatility, value, and growth. The fund started trading in September 2016 and has an expense ratio of 0.60%.
FTXL, which tracks the Nasdaq US Smart Semiconductor Index, has 30 holdings. With regards to sub-sectors, we see semiconductors leading at 78.78%, followed by production technology equipment at 21.22%. The top 10 stocks in the portfolio account for over half of net assets of $91.6 million.
Broadcom (NASDAQ:AVGO); Intel (NASDAQ:INTC); Texas Instruments (NASDAQ:TXN); Micron Technology (NASDAQ:MU); and QUALCOMM (NASDAQ:QCOM) are among the most prominent holdings.
FTXL is around its 52-week lows and has declined almost 28% YTD. At present, the fund is trading at 21.94 times trailing earnings and 4.75 times book value. Potential investors could find value around these levels.
On the date of publication, Tezcan Gecgil 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.
