Separate the Growth Plays from the Hype Plays for Big Profits Ahead

Growth investing isn’t dead. But companies that were posting strong growth in the past year are either going to falter now that the economy has slowed – or they’ll continue to show that they’re strong growth plays in the years ahead.

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  • Investors can follow some big trends seeing capital flows and deals occurring now to get an idea of where the best opportunities are for growth stocks. One such trend still seeing investor interest right now is in AI.

    Otherwise known as artificial intelligence, software being used to create more efficient programs and ways of doing business are seeing tremendous value as the economy slows.

    That should be good news for C3.ai (AI), one of the up-and-coming names in the space. However, investors have sent shares down 72 percent in the past year, even as revenue has been growing and the company CEO says the business is fine.

    As long as the company can keep growing, and it can turn a profit in time, shares should rebound to new highs.

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  • Action to take: Right now, shares trade for just over twice the cash on the books. And revenues stand to continue growing at a mid-double-digit rate. So shares are poised to move higher with the markets in time.

    For traders, the January 2023 $25 calls, last going for about $2.50, offer the potential to see high-double-digit gains in the coming months on a move higher in shares.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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