5 Historically Cheap Growth Stocks to Buy With Confidence in the Wake of the Nasdaq Correction

The Nasdaq Composite has been on a wild ride, with investors throwing caution to the wind after former President Trump's decisive victory in the recent U.S. election. The market's euphoria is understandable, given Trump's pro-business agenda, but it's crucial to remember that broader uncertainties still linger. These include a structural slowdown in China, a tough task for the Fed on inflation, and ongoing geopolitical flashpoints abroad. In such a volatile environment, investing in stocks with solid fundamentals can provide a much-needed anchor.

Solid fundamentals refer to consistent earnings growth, high profit margins, and manageable debt levels. These companies demonstrate strong cash flow and an attractive return on equity, often benefiting from a competitive advantage and skilled management. For investors seeking stability, companies that pay steady dividends and lead their industries typically show resilience across economic cycles, making them reliable long-term investments.

In this context, brokerage firm Oppenheimer recently named some of its favorite fundamental stock picks, all of which have also earned consensus “Buy” ratings on Wall Street. Let's dive into these five stocks that offer a blend of growth potential and stability.

1. Goldman Sachs (GS)
- Market Cap: $166.4 billion
- YTD Performance: Up 54.4%
- Dividend Yield: 2.28%
- Analyst Rating: Moderate Buy
- Mean Target Price: $553.45

Goldman Sachs is a global investment banking, securities, and financial management firm with a rich history dating back to 1869. Its four main business segments include investment banking, global markets, asset management, and consumer and wealth management. The company's strong market position and diverse revenue streams make it a top pick for investors looking for stability and growth.

2. SAP (SAP)
- Market Cap: $289 billion
- YTD Performance: Up 49.4%
- Dividend Yield: 1.01%
- Analyst Rating: Strong Buy
- Mean Target Price: $256.33

SAP is a European tech giant and one of the world’s leading providers of enterprise software and solutions. Founded in 1972, SAP develops software solutions for businesses of all sizes and industries, with a focus on Enterprise Resource Planning (ERP) software, cloud services, data and analytics, customer experiences, and industry-specific solutions. Its strong market position and innovative product offerings make it a compelling investment.

3. Clearwater Analytics (CWAN)
- Market Cap: $6.64 billion
- YTD Performance: Up 42.1%
- Analyst Rating: Moderate Buy
- Mean Target Price: $25.55

Clearwater Analytics is an Idaho-based fintech company that provides a SaaS (Software as a Service) platform for investment accounting, performance measurement, and risk analysis. Its goal is to create a cloud-based platform that simplifies the complex processes of portfolio accounting, investment data aggregation, and performance measurement. The company's innovative technology and strong market position make it an attractive investment.

4. Toll Brothers (TOLL)
- Market Cap: $15.5 billion
- YTD Performance: Up 46.8%
- Dividend Yield: 0.60%
- Analyst Rating: Moderate Buy
- Mean Target Price: $155.12

Toll Brothers is a prominent luxury homebuilder founded in 1967. The company specializes in designing, building, marketing, and selling luxury homes and communities. Its strong brand and focus on high-end properties make it a reliable investment in the housing market.

5. Equinix (EQIX)
- Market Cap: $87.7 billion
- YTD Performance: Up 10.7%
- Dividend Yield: 1.87%
- Analyst Rating: Strong Buy
- Mean Target Price: $960.29

Equinix is a major global player in data centers and internet infrastructure. Founded in 1998, Equinix operates International Business Exchange (IBX) data centers, which serve as critical points of infrastructure for global businesses. Operating as a Real Estate Investment Trust (REIT), the company's strong market position and growing demand for data center services make it an attractive investment.

In conclusion, the current undervaluation of these growth stocks presents a unique opportunity for investors. The recent market correction, driven by uncertainty surrounding tariffs and weaker economic indicators, has created a buying opportunity for these historically cheap growth stocks. As the market corrects and valuations normalize, these stocks have the potential for significant future growth. Investors should consider adding these stocks to their portfolios for long-term gains.