3 Stocks That Are Going To Boom

With the S&P 500 and the Dow Jones Industrial Average (DIA) at near-record highs, investors are feeling enthusiastic about the market’s prospects. They are pushing popular stocks like Tesla (TSLA), Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT) up, confident that there is no end to the gains in sight. 

However, many experienced investors and analysts are proceeding with caution when it comes to buying shares at their peak. This group is disinclined to put cash into the most sought-after companies. Instead, they are working to maximize their returns by focusing on undervalued stocks that show signs of taking off in the near future. 

All signs indicate that there are three stocks that are going to boom: Walgreens Boots Alliance (WBA), Zoom (ZM), and IonQ (IONQ). Here’s what you need to know. 

IonQ, Inc.

Rounding out the list of stocks that are going to boom is IonQ, a quantum computing hardware and software company that began trading publicly on October 1, 2021. Rather than a traditional IPO, IonQ went public through a special purpose acquisition company (SPAC). 

The science behind quantum computing is complicated, but the underlying concept is simple. Standard computers and quantum computers process information using entirely different methods. While standard computers rely on transistors, 1s and 0s, quantum computers rely on qubits. These can be 1 or 0 simultaneously. When linked, qubits deliver exponentially more computing power, while linked transistors can only increase power linearly. 

The benefit of the exponential increase in power is the quantum computer’s ability to solve complex problems and analyze tremendous amounts of data quickly. This isn’t just a difference of several hours or days. In 2019, Google demonstrated that a quantum computer required mere minutes to solve a problem that a standard computer would need 10,000 years to complete. 

Applications for this type of computing power will transform humanity. For example, quantum computing can increase the rate at which drug trials are completed, they can create impenetrable digital security, and they can monitor the environment to provide early warning of contamination and other changes that begin subtly. 

What makes IonQ an important player in the emergence of quantum computing? Why is IonQ stock a buy? In short, the company built the most powerful trapped-ion quantum computer in the world. Through the use of ionized atoms, IonQ says its computers are capable of “longer, more sophisticated calculations with fewer errors than any quantum computer yet built.” 

True, IonQ isn’t making any money – yet – and its management projects that the company will remain free-cash-flow-negative through 2026. That means this stock is relatively high-risk. However, for those who regret missing the IPO for Tesla (TSLA), Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT), IonQ could be a once-in-a-lifetime opportunity. 

Zoom Video Communications

In early 2020, Zoom (ZM) was relatively unknown. Large, established video conference platforms from Microsoft (MSFT), Google (GOOG), Adobe (ADBE), and Cisco (CSCO) attracted the lion’s share of business customers, and individuals were content with FaceTime and Skype.

The world changed suddenly in March 2020, and video conferencing was no longer a luxury. Online learning and remote work were thrust upon an unprepared population, and the market for video conferencing services expanded overnight. 

Zoom quickly became the go-to choice for businesses and schools that didn’t have a platform in place because it offered features that weren’t available through alternative services. For example, anyone could host a 40-minute call free of charge with up to 100 participants. Many of those early customers eventually subscribed to paid plans once they were comfortable with the product. 

Stock prices rose from January 2020’s roughly $70 per share to nearly $560 per share in October 2020. They have since dropped about 50 percent, but that’s still quite a return over January 2020. 

Some investors have decided that Zoom is passe. The company enjoyed its 15 minutes of fame, but post-pandemic, it will fade back into the shadows as larger competitors regain market share. Other investors aren’t so sure. They think Zoom is the future of work – in fact, they are quite certain that Zoom stock is going to boom. But why? 

It’s true that use of Zoom video conferencing tools saw exceptional growth due to new customer acquisition at the height of the pandemic, and it is also true that the company is unlikely to duplicate the rate of new customer acquisition. However, that doesn’t mean revenues and earnings will stagnate. Zoom (ZM) has retained most of its new customers more than a year later, and it has new, more advanced products for them. 

Zoom studied how its video conferencing services were being used, and it developed upgrades to meet its clients’ needs. Zoom Phone and Zoom Rooms are the company’s answer to user requests, and both have potential to create substantial profits for the company. 

At the moment, less than five percent of current clients have Zoom Phone, and less than five percent have Zoom Rooms. That’s likely to change. Zoom Phone and Zoom Rooms are an improvement over traditional conferencing tools, and they are a step ahead of existing video conferencing systems.

That makes the products a logical next step for clients who are ready to upgrade. As they do, Zoom should realize top-line and bottom-line growth, and the stock price is likely to follow. In other words, at today’s relatively low price, Zoom stock is a buy. 

Walgreens Boots Alliance

The need for healthcare services is growing exponentially, and the traditional infrastructure can’t keep up. That was made exceptionally clear during the height of the COVID-19 pandemic when preventive and non-emergency care was postponed to conserve resources for the sickest patients. 

Companies that were once on the edge of healthcare service were called upon to fill the gap. Pharmacies had a particularly critical role in pandemic-related testing and vaccination initiatives, and demand for basic health clinic services increased. 

In July 2020, the Walgreens Boots Alliance (WBA) announced a new partnership with VillageMD to launch 700 full-service in-store clinics throughout its Walgreens pharmacy footprint. Healthcare clinics within retail stores aren’t a new idea. Walmart (WMT) and CVS (CVS) have offered these services for years. 

However, as with e-commerce, streaming video, and web-hosting services, the pandemic sparked new interest from consumers. The gradual growth trends shot up suddenly as non-traditional shopping, education, work, and health-related behaviors went mainstream. 

The Walgreens full-service clinics will bring more traffic into the stores, and repeat visits will become the norm as relationships between patients and providers deepen. After all, unlike competing clinics, these will be staffed with physicians. From a revenue perspective, the on-site clinics are likely to generate additional pharmacy sales – an area where Walgreens sees higher margins. 

These clinics are just one piece of a larger plan to turn the company around. Over the past year, management has put a variety of expense-reduction measures in place, and the company has prioritized improvements in operating efficiency. Together, these measures are expected to deliver more than $2 billion in savings by the close of fiscal 2022. 

On top of that, Walgreens is investing resources into digitization and direct-to-consumer sales – both critical to meeting customers’ changing expectations. As all of the pieces come together and results hit the Walgreens Boots Alliance financials, most analysts agree that share prices will grow at a respectable rate. The gravy on top? Shareholders also enjoy a 4.05 percent dividend yield. 

Overall, Walgreens Boots Alliance stock is set to potentially boom, and investors who buy at value prices will see the biggest rewards. 

 

 

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