Stock Market

Don’t Wait! 3 Fearless Stocks to Buy Before Year-End

The last bear market ended a little over a year ago. Since then the S&P 500 has rallied 27% higher. However not all stocks participated. In fact, it was the so-called Magnificent 7 group of stocks that carried the broad market index throughout most of the year. Despire the unsureness we have seen this year, there are some fearless stocks to buy making themselves known.

Nvidia (NASDAQ:NVDA) alone represents 3% of the popular benchmark’s total weighting. Its tripling in value had an outsized influence on the S&P 500’s performance. But Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Tesla (NASDAQ:TSLA) all played a big role in the bull market that followed.

Of course, that means the other 493 stocks barely impacted the results, or worse, worked against it. Many investors worry another bear market might be on the horizon. Although they occur on average every 3.5 years, one can happen anytime. Sharp investors understand that’s the time to buy. Of the 27 bear markets that have growled their way into existence since 1928, there have been 28 bull markets that followed.

You need to be fearless in the face of uncertainty. What follows are three tremendous stocks to buy now before year-end.

CrowdStrike Holdings (CRWD)

A sign with the Crowdstrike (CRWD) company logo

Source: VDB Photos / Shutterstock.com

Like death and taxes, it appears cybercrime will always be with us. The Identity Theft Resource Center says there were 2,116 data breaches in the first three quarters of 2023. That surpasses the all-time high hit in 2021 when there were 1,862 breaches. That’s where CrowdStrike Holdings (NASDAQ:CRWD) comes into play.

Through a combination of artificial intelligence (AI), machine learning, and old-fashioned human intervention, the cybersecurity leader’s Falcon platform sifts through trillions of events weekly. It quickly recognizes and responds to potential threats over time as it learns and grows. Customers are flocking to the platform, with client counts rising 45% from last year. Nearly two-thirds of them purchased at least five or more cloud module subscriptions.

Net new annual recurring revenue (ARR) hit $223.1 million, a new all-time record for CrowdStrike. Almost one-third of its revenue comes from international customers, up from 28% just three years ago. Subscription gross margin now stands at 78%, three percentage points higher than last year.

This is a stock you can buy in any market or almost anytime. Yet it is one you might want to boldly buy before the end of the year.

Digital Ocean (DOCN)

A laptop screen displays the logo for DigitalOcean (DOCN).

Source: monticello / Shutterstock.com

Cybersecurity is going to be a long-term growth trend, but so is helping businesses transfer their data to the cloud. Digital Ocean (NASDAQ:DOCN) is carving a niche out for itself by targeting small- and medium-sized business (SMB) to assist with the move. 

SMBs don’t have the resources to pay for the cloud services of Amazon, Microsoft, or Google, but their needs are just as great as their larger brethren. For companies without large IT departments (or no IT department at all), Digital Ocean simplifies the move to the cloud. It makes the cloud accessible by having clients up and running within minutes of inquiring.

Revenue is expected to accelerate following its acquisition of AI cloud provider PaperSpace, and was up 16% in the third quarter. Net dollar retention rate, or the amount of new money existing customers spend with it each year, was 96%. That was slightly less than the 104% it had in the second quarter. Average revenue per customer, however, rose 6% year over year.

Digital Ocean is a small-cap stock itself making it the perfect vehicle for startups and other small businesses to attain their cloud goals. It’s also a perfect stock to buy now before the end of the year.

Digital Realty Trust (DLR)

A hallway with server racks on either side in a data center

Source: dotshock / Shutterstock

Yet another enduring trend we’re likely to see is the growth and strength of data centers. With all the data moving to the cloud, it needs to reside somewhere, namely in data centers. Digital Realty Trust (NYSE:DLR) is one of the largest real estate investment trusts (REIT). It owns 312 centers including 66 that are held as investments across 39.5 million square feet of space. Among its biggest customers are Oracle (NYSE:ORCL), IBM (NYSE:IBM), and Meta Platforms.

Data centers essentially serve as the backbone of the internet. They are the nerve center for everything that occurs in the cloud. They provide the warehousing for the servers and networking equipment in a secure, climate-controlled environment. As companies continue to transition their data to the cloud, they turn to Digital Realty Trust to house it.

Yet as a REIT, Digital Realty is required to return most of its profits to shareholders as distributions. The REIT’s dividend yield stands at 3.7% annually. Those profits could grow exponentially due to the advent of AI. Because of the vast computing power, storage space,  and low-latency networking for training and running models required, the demand for data centers will grow. That makes Digital Realty Trust a fearless stock to buy now before the end of 2023.

On the date of publication, Rich Duprey did not hold (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.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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