5 Oversold Growth Stocks to Buy Now

Investing in high-quality, oversold growth stocks could help investors generate lucrative returns in the months ahead.

PayPal ( PYPL ): Announced a shift in its focus from active user growth to more efficient capitalization of existing customer base.

Upstart ( UPST ): Despite a potential decline in lending activity, management still has strong confidence in its AI-based loan underwriting models.

Source: Freedom365day / Shutterstock.com 2022 has been a turbulent year for Wall Street . The Nasdaq 100 index has sold off over 11% last month and is currently down almost 24% year-to-date (YTD). Therefore, many tech stocks currently offer a discount shopping opportunity for long-term investors. But InvestorPlace.com readers still need to be selective on which oversold growth stocks to include in portfolios.

In mid-April, James Bullard, the president of the St. Louis branch of the Federal Reserve, announced it’s a “fantasy” to believe that small, modest increases in interest rates can tame the highest inflation the U.S. has seen in four decades. Therefore, we can expect volatility in the markets to continue in the second half of the year as well.

Nonetheless, investing in high-quality, oversold growth stocks with solid fundamentals now could help investors generate risk-adjusted returns well into the future. According to Morgan Stanley (NYSE: MS ), among the trends that deserve investors’ attention in 2022 are “Innovation… Deglobalization…Decarbonization… Transformation of the U.S. labor market…”

Against this backdrop, here are five oversold growth stocks that could shield investor portfolios from further market crashes. ASML (ASML)

Our first oversold growth stock today is the Dutch company ASML (NASDAQ: ASML ), the leading manufacturer of photolithography systems used by semiconductor foundries to produce chips.

ASML reported Q1 results on April 20. Revenue came in at 3.5 billion euros, down from almost 5 billion euros the previous quarter. Earnings per share (EPS) was 1.73 euros, down from $4.39 per share for the prior quarter. Cash and equivalents ended the period at $4.94 billion.

The chipmaker finished the quarter with net bookings of 7 billion euros, highlighting strong demand for its extreme ultraviolet lithography (EUV) machines. The growth in bookings has increased ASML’s backlog to a whopping 29 billion euros.

The company issued solid revenue guidance of 5.1 to 5.3 billion euros for the second quarter, up from 4 billion euros a year ago.

ASML stock has declined more than 29.5% YTD. Shares trade at 30.2 times forward earnings and 11.4 times sales. Meanwhile, the 12-month median price forecast for ASML stock stands at $774.50 . HP (HPQ)

Our next oversold growth stock HP (NYSE: HPQ ), one of the largest manufacturers of PCs, printers, and printer supplies worldwide.

HP released Q1 results on Feb. 28. Revenue increased 8.8% year-over-year (YOY) to $17.03 billion. Adjusted diluted earnings increased to $1.10 per share, compared to 92 cents a year ago. Free cash flow stood at $1.4 billion. Cash and equivalents ended the period at $3.39 billion.

In early April, Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B ) revealed an 11% stake in the company , making it the largest shareholder of HP. Warren Buffet has a keen eye for value.

HPQ stock is almost flat YTD but has risen more than 12.5% in the past year. Shares are trading at 8.4 times forward earnings and just 0.66 times trailing sales. The 12-month median price forecast for HP stock is $36 . Nvidia (NVDA)

Next up is Nvidia (NASDAQ: NVDA ), the global leader in designing advanced computer chips used in disruptive technologies, such as autonomous driving, robotics, and virtual reality (VR).

The chipmaker announced Q4 FY22 results on Feb. 16. Revenue increased 53% YOY to $7.64 billion. Adjusted earnings per diluted share came in at $1.32, up 69% YOY. Cash and equivalents ended the period at $2 billion.

Management has recently launched Nvidia Omniverse , a platform for Web 3.0 developers to create their own metaverse products. Moreover, Nvidia’s autonomous driving technology is expected to hit the road in 2024 model Mercedes-Benz (OTCMKTS: DMLRY ) vehicles.However, the chipmaker faces short-term headwinds from bearish cryptocurrency trends due to its mining-related hardware. Furthermore, multiple analysts have also been forecasting a significant decline in Nvidia’s gaming chip business.NVDA stock has dropped more than 40% YTD. Shares are trading at 30.1 times forward earnings and 15.9 times sales. The 12-month median price forecast for Nvidia stock stands at $332 . PayPal (PYPL) Financial technology (fintech) giant PayPal (NASDAQ: PYPL ) facilitates online and mobile payments on behalf of consumers and merchants. Its portfolio of payment products includes PayPal, Venmo, BNPL, and Braintree.Paypal reported Q1 […]

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