Market Rebound: 3 Stocks to Buy for the Next Leg Higher

Last week the market experienced one of the fastest rises in volatility since the Covid-19 pandemic and the Great Financial Crisis. The VIX index rose above 60 on Monday morning, which was a 40-point jump from the day before. However, what followed was equally impressive as volatility fell nearly just as fast as it rose, and today the VIX is below 17.We know now that the unwind of the Yen carry trade led to a capitulation of the most levered traders and it seems that the worst is already behind us. And it makes sense that we can look forward confidently and use this as an opportunity to pick up shares in the best stocks.We have a nice list bullish factors holding up this market; the economy remains robust while inflation continues to ease, the Federal Reserve will begin lowering rates soon leading to an expansionary policy and earnings at the best companies in the world continue to grow nicely.Sometimes you must see through the scary headlines and look at the most important variables that drive markets such as Fed liquidity and earnings growth. When investors do it like that, they can see these sharp corrections for what they really are, opportunities.Some of the best stocks in the world went on sale this last week and here I am going to identify three of my favorites. Nvidia (NVDA), Meta Platforms (META) and AppLovin (APP) have been some of the best performing stocks in the last year and based on their Zacks Ranks, growth forecasts and valuations remain unambiguously attractive.Image Source: Zacks Investment Research AppLovin Stock Boasts a Top Zacks RankLesser known that the other two, AppLovin is a mobile technology company that specializes in mobile app growth, monetization, and user acquisition through its suite of software and services. AppLovin provides a powerful platform that enables app developers to enhance their marketing strategies, optimize user engagement, and maximize revenue. The company operates one of the largest mobile ad networks in the world and has also expanded into app development, acquiring and partnering with various gaming studios.AppLovin really has it all, as the stock enjoys powerful momentum pushing it higher, strong growth forecasts and a very reasonable valuation. Additionally, AppLovin has a Zacks Rank #1 (Strong Buy) rating, boosting the odds of a near-term rally. Analysts have unanimously raised earnings estimates by a significant margin in just the last week. Over the next three to five years, analysts expect earnings per share (EPS) to growth 20% annually.Image Source: Zacks Investment ResearchEven with the incredible appreciation the stock has experienced over the last two years it still trades near its lowest relative valuation. Because sales and earnings are growing so fast, the stock has actually gotten cheaper over the last year. Today, APP is trading at a one year forward earnings multiple of 22.9x, which is right in line with the broad market and well below its three-year median of 64.5x.Image Source: Zacks Investment Research Meta Shares Approach All-Time HighsMeta Platforms is another stock that has put up truly stellar earnings results and price appreciation since the 2022 lows. In the chart below we can see that the price of META is bumping up against its recent all-time highs, and if it clears that level could begin another major bull leg.Also visible in the chart is just how well Meta Platforms stock held up during the recent market correction and how quickly it has snapped higher.Image Source: TradingViewAlso worth noting is that Meta Platforms boasts a Zacks Rank #2 (Buy) rating, reflecting upward trending earnings revisions and improving the near-term outlook of the stock. In the last month FY24 earning estimates have increased by 3.7% and FY25 by 2.6%. Current year sales are expected to grow 19.6% and next year’s sales are expected to climb 14%. Furthermore, analysts project EPS to grow 19% annually over the next three to five years.Meta Platforms is trading at a one year forward earnings multiple of 24.9x, which is just above the market average and just below its 10-year median of 25.1x. META also now pays a tidy 0.38% dividend to shareholders.Image Source: Zacks Investment Research Nvidia Continues to Show Impressive GrowthFor the first time in nearly two years, Nvidia is not at the top of the Zacks rank, however it still boasts a Zacks Rank #2 (Buy) rating. Nvidia has of course been hugely influential to the broader market and the primary beneficiary of the AI boom. The company’s vision into what AI could be, and its ability to position itself as the key piece of infrastructure for the technology had set it on a path to more than triple its sales and nearly 7x its EPS in the last two years.Over the last month the stock experienced its sharpest correction since the big bull run began, but like the others, investors have been snapping up shares during the sell off. Also like the others, Nvidia still enjoys a reasonable valuation, attracting new investors.We can also see that the price action in NVDA is looking quite bullish as well, as on Monday, the stock broke out from a descending channel.Image Source: TradingViewToday, Nvidia is trading at a one year forward earnings multiple of 45.8x. This is above the broad market average and just above its 10-year median of 42.7x. Although that may appear elevated to some investors,analysts forecast NVDA EPS to grow 37.6% annually over the next three to five years, simply indicating a valuation priced for tremendous growth in profits.Image Source: Zacks Investment ResearchFinal ThoughtsAs markets show signs of rebounding, the potential for the next leg higher is enticing. Nvidia, Meta Platforms, and AppLovin have all demonstrated strong fundamentals, impressive growth forecasts, and reasonable valuations that make them attractive picks. However, it's essential to remember that the market is unpredictable and can turn volatile without warning.While the current outlook might be optimistic, investors should always prioritize risk management. Maintaining a diversified portfolio, setting stop-loss orders, and not overcommitting to any single position can help mitigate potential downsides. The market will ultimately do what it wants, and staying vigilant while focusing on long-term goals is key to navigating these opportunities wisely.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report AppLovin Corporation (APP): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks