The Nasdaq looks poised to clinch a new record high Thursday, with the tech-heavy index currently at 14,181.58 at the time of writing.
It has been a good week for the index, which also hit a fresh high on Monday as names like Peloton (NASDAQ: PTON), Splunk (NASDAQ: SPLK), Tesla (NASDAQ: TSLA), and Zoom Video Communications (NASDAQ: ZM) all rose higher.
But while these names have been moving higher this week, all four are between 30% and 50% below their 52-week highs.
And traders say that gives investors a buying opportunity for two of the names.
BK Asset Management’s Boris Schlossberg says Peloton is his pick.
“I really like Peloton because to me, this is a secular success story,” Schlossberg, the firm’s managing director of FX strategy, said. “I think Peloton is really going to be sort of the Netflix (NASDAQ: NFLX) of the workout world.”
Schlossberg argued that even with the world opening back up and people returning to gyms, “the convenience of Peloton is so compelling that I think they are going to maintain their subscriber base.”
“Wall Street loves to value subscription services,” Schlossberg added. “That’s the future digital economy and that’s what makes Peloton such a compelling long-term buy.”
Peloton shares got a boost on Monday after Loop Capital initiated coverage with a Buy rating and a $140 price target.
The firm said in a note that, while the stock is down nearly 35% below its high set back in January following voluntary recalls of its Tread and Tread+ treadmills and the associated negative press surrounding the safety of the products, the impact on Peloton from the issue should be minimal.
“Although we fully expect some impact from the recalls, we believe the impact will be short-lived and that management’s guidance likely bakes in an excessive amount of conservatism,” Loop Capital analysts said.
In addition to Peloton, Piper Sandler’s Craig Johnson said he also likes Tesla now, noting a consolidation in the stock’s chart.
“From my perspective, you’ve got 40-plus percent upside, 17% downside,” Johnson, the firm’s senior technical research analyst, said. “This is a stock that I think can do well moving into the second half of the year.”
“It looks like the fundamentals and technicals seem to align here,” Johnson added.
Johnson isn’t the only one on Wall Street who’s bullish on the electric car maker.
Morgan Stanley analyst Adam Jonas said in a note from Monday that the stock is a Buy, and issued a $900 price target for the stock – 46% higher than the price as of this writing.
“Let’s begin with a healthy dose of intellectual honesty on the starting point for the stock,” Jonas said. “Even bulls should admit that the rise in the stock price during the second half of 2020, while perhaps deserved in principle, was packed into a highly concentrated time frame.”
Jonas added that upcoming catalysts for the stock include capacity expansion in Texas and Germany, and said that he predicts Tesla will open up five more plants between now and the middle of this decade and another new vehicle model.
Canaccord analyst Jonathan Dorsheimer says there’s another catalyst for the stock: residential solar power.
“Tesla is creating an energy brand and an Apple-esque ecosystem of products with customer focused connectivity, seamlessly marrying car, solar, and back-up power,” Dorsheimer said.