A lot has been spoken about the “September Effect” when most investors see their portfolios plunge. There are several theories behind this and multiple reasons that have led to a historical underperformance. It is often considered a month of losses since traders start to readjust their portfolios and many firms tend to sell their holdings this month. This is also the time when investors start to consider their annual profit and loss which leads to buy and sell action.
Key Points in This Article:
- You can start your investment journey with as little as $100.
- September is a period of market correction and any dip in the three stocks discussed here is a chance to buy.
- Palantir, Uber and PayPal Holdings are some of the top stocks to own in the current market situation.
- If you’re looking for an AI stock to make the most of the AI hype, grab a free copy of our “The Next NVIDIA” report. We’ve identified a stock that could generate 10x returns.
While this month is all about market volatility, smart investors know that it is also a chance to load up on hot stocks. Long-term investors should look beyond the temporary dip and accumulate stocks that look promising. If you are not willing to bet a large amount, start with $1,000 and consider these three under $100 stocks for this month. These are highly promising stocks with the potential to keep moving higher in the long term. Let’s take a look at them.
Uber (UBER)
A big winner of 2024, Uber (Nasdaq: UBER) has impressed investors with strong fundamentals, steady growth, and a significant stock upside. Trading at $71, the stock is up 23% year-to-date and 54% in the past 12 months. It has outperformed the S&P 500 index in the past two years and the stock has doubled since 2023. I think the stock looks undervalued and could keep the momentum going.
Uber’s results were impressive with a 16% year-over-year jump in revenue and a 19% jump in gross bookings. The revenue jump was driven by a double-digit gain in monthly active users, trips, and a surge in gross bookings. It completed 2.8 billion trips in the second quarter.
The company has the potential to scale up the business model by cutting operating expenses like sales and marketing. Despite the competition, Uber remains an industry leader and is a top choice for many. As people return to office, Uber’s services have become even more relevant. The company is steadily expanding across the world and its monumental performance in the past two years has impressed investors.
If the bottom line keeps expanding steadily, the company’s valuation will become more compelling and the stock could trade at a premium. Loop Capital has recently increased the price target of Uber stock to $84 with a buy rating. I am highly optimistic about the business and believe Uber is a great stock to own below $100.
Palantir Technologies (PLTR)
Up 84% YTD, Palantir Technologies (NYSE: PLTR) is on a rally and has soared 26% in the past month. Trading at $30, PLTR stock is priced for perfection and is an ideal tech stock to own amid the growing demand for artificial intelligence (AI). With better economic reports, the entire tech sector has recovered but Palantir set itself apart with stellar quarterly numbers.
The second quarter saw a 27% jump in revenue to $678 million and the EPS soared 89% to $0.09. Known as the supplier of intelligence software to the military and government agencies, Palantir is catching on with commercial clients. With the growing popularity of its Artificial Intelligence Platform (AIP), the company has seen impressive growth in commercial clients. The U.S. commercial customer count jumped 83% YOY to 295 customers and the commercial revenue soared 55% YOY to $159 million.
Palantir’s numbers prove that the company is moving in the right direction and has ample space to grow. Yes, Palantir is an expensive stock but the management has proved its strength amid the competitive market. Customer adoption and commercial expansion have helped the company gain solid momentum. I think the company meets all the criteria to be a part of the S&P 500 and we could see it join the index next year.
Palantir has the potential to double your money. It has bright growth prospects and is one of the best AI stocks.
PayPal Holdings (PYPL)
PayPal Holdings (NASDAQ: PYPL) may not have had a great 2024 but the stock looks extremely cheap at the current level. Down from the high of $308, the stock is exchanging hands for $72 and is at its 52-week high. The dip is a good chance to load up on this stock.
PayPal is in a strong position and is profitable. For the second quarter, it reported an 8% YOY jump in revenue to $7.9 billion and the EPS jumped 17% YOY to $1.08. Its payment volume soared 11% YOY while the payment transactions increased 8% to $6.6 billion. The company has a debt of only $12.2 billion while the cash and cash equivalents stood at $18.3 billion, putting the company in a favorable position despite high inflation.
However, an interest rate cut could help improve PayPal’s business as consumer spending could see an improvement. Lower interest will lead to an improvement in consumer spending and it could translate to higher payment volume. While the competition is fierce, the company has managed to keep its payment volume and revenue growing, showing consumer loyalty. The company also has the necessary resources to invest in business growth.
There is no sugarcoating the fact that PayPal stock is beaten down but I think this is the time to make your move. The long-term picture for PayPal looks attractive and the company is in a solid financial position.
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