Dogecoin (CRYPTO: DOGE) has become one of the most hyped assets on the market today. This is understandable when you consider that the cryptocurrency is up 7.733% so far this year, well ahead of the benchmark S&P 500the return of 11.84% over the same period.
However, investors should also consider the high volatility of Dogecoin. Dogecoin is down more than 50% from its all-time high of $ 0.74 last month (so, yes, it was more than 14,000% at one point). This cryptocurrency is not covered by any asset and has hardly any lasting advantage over competitors in terms of transaction fees or processing and settlement speeds. And since the number of Dogecoins that can be mined is not strictly limited, this cryptocurrency is extremely sensitive to headline risks.
This makes Dogecoin a highly speculative investment for retail investors – one that should be avoided most of the time. Instead, NVIDIA (NASDAQ: NVDA), Skillz (NYSE: SKLZ), and Jushi stocks (OTC: JUSHF) be able to demonstrate much better portfolio holdings in the long term.
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If you’re looking to invest in leading semiconductor technology that powers artificial intelligence, cloud computing, autonomous driving, 5G, and several other next-generation trends, NVIDIA may be the stock for you.
In the first quarter of fiscal 2022 (which ended May 2), NVIDIA had an excellent performance despite the ongoing global semiconductor scarcity. Revenue rose 84% year over year to $ 5.66 billion and diluted earnings per share (EPS) rose 106% to $ 3.03. In the first quarter, gaming revenue rose 106% year over year to $ 2.76 billion, while data center revenue increased 79% year over year to $ 2.05 billion.
NVIDIA has long been known as the leader in gaming for its graphics processing units (GPUs) and further strengthened that position with the introduction of GeForce RTX 30-series GPUs in September. Since then, GeForce has sparked a massive GPU upgrade cycle in the gaming industry, and the demand for NVIDIA-powered laptops and desktops from students, gamers, and developers has exceeded supply.
In fact, the RTX 30 series has played a vital role in helping NVIDIA recapture some of the discrete GPU market modern micro devices (NASDAQ: AMD). (“Discrete GPU” refers to a GPU that is separate from the central processing unit, or CPU.) The company then ended 2020 with 83% of the market share for discrete GPUs.
NVIDIA’s data center segment is seeing solid demand from massive data center customers who are building an infrastructure to deliver AI capabilities to their customers. Management has also announced that it will launch its first central processing unit (CPU) for data centers, the ARM-based “Grace” chip, by 2023. With the ability to run 10 times faster than existing servers, Grace CPU can further strengthen NVIDIA’s position in the global data center market.
With this in mind, the premium rating appears justified, even though NVIDIA is trading at more than 40.8 times expected earnings. Even at these high levels, investors can get nice returns by purchasing this market-leading semiconductor stock.
The mobile esports platform Skillz has been on a wild ride for the past few months. The company went public in December via the Special Purpose Acquisition Company (SPAC) route at an opening price of $ 17.89, hit as low as $ 46.30 in February, then hit an all-time low of $ 12 in April , $ 40. The dramatic decline has been linked to several factors, including investors moving from growth stocks to value stocks, some negative short seller reports, untimely capital increases, and stock dilution with significant insider selling.
However, the sheer scale of Skillz’s sell-off seems unjustified. Skillz provides a platform for mobile game developers to organize competitions and then collects 15% of the gross income paid by players participating in these competitions. In the first quarter of fiscal 2021 (ended March 31), Skillz’s monthly active users increased 3.8% year over year to 2.7 million, and the number of paying users increased 81% to 467,000.
In an open letter to retail investors, Skillz founder and CEO Andrew Paradise highlighted the platform’s high level of commitment and noted that once users start paying, they’ll stay with the company for the long term. While Skillz is currently only focusing on paying users, Paradises Brief mentioned plans to explore other monetization methods such as “non-intrusive advertising” and “gamifying other industries and experiences” in an attempt to generate new revenue streams in the years to come.
In the first quarter, Skillz revenue rose 92% year over year to $ 84 million, up from its previous forecast of $ 80 million. The company also raised its estimate of year-over-year revenue growth for fiscal 2021 from 59% to 63%. However, these guidelines do not include the potential gains from launching new games or entering new regions.
The company has signed a multi-year gaming contract with the National Football League (NFL). While this deal won’t add materially to Skillz’s revenue in fiscal 2021, it will attract more users to the platform. The company also plans to get into India by the end of fiscal 2021, which is expected to grow the addressable market by 65%. Against this background, the chances remain high that Skillz can show a steep sales growth in the coming quarters.
Skillz is currently trading 31 times after 12 month (TTM) sales and is still quite expensive, especially since it is not profitable. However, the company is a solid bet on the growth potential of the mobile gaming market, which has grown at an average growth rate of 23% annually between 2015 and 2020. With a gross margin of 95% and cash on hand of $ 613 million and zero debt, Skillz offers retail investors an attractive risk-reward ratio.
3. Jushi stocks
US multi-state cannabis operator Jushi Holdings has soared over 450% in the past 12 months – and for good reason. While one of the smaller U.S. cannabis companies, the company has strategically selected high-growth, limited-competition markets to operate in including Ohio, Pennsylvania, Virginia, Illinois, California, Nevada, and Massachusetts.
Jushi currently operates 11 medical marijuana pharmacies in Pennsylvania and plans to open another seven in 2021. That presence seems even more impressive when you consider that Pennsylvania’s limited licensing structure reduces competition.
There are 528,000 registered medical marijuana patients in Pennsylvania and the market is projected to generate revenue of $ 1.5 billion through 2023, meaning Jushi will benefit dramatically in the months ahead. As Pennsylvania moves towards recreational marijuana legalization, which is a major issue ahead of the 2022 elections, Jushi’s extensive presence can help its brands quickly establish its brands in this emerging market.
Jushi currently operates four pharmacies in Illinois, a state that legalized the sale of recreational cannabis as of January 1, 2020. With an estimated annual rate of $ 1.3 billion in 2021, Illinois is well positioned to be a key revenue driver for the company. The company also holds one of only five vertically integrated licenses in Virginia that allow it to grow, process, and sell medicinal cannabis to customers in a market of limited competition. Virginia is expected to start selling recreational cannabis in 2024, which will further strengthen Jushi’s addressable market.
For the first quarter of 2021 (ending March 31), Jushi revenue increased 29% sequentially to $ 41.7 million. The company also has a strong balance sheet with $ 168 million in cash and $ 82 million in debt. With a robust strategy and solid financial data, Jushi could prove to be an attractive investment for retail investors.
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Manali Bhade has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Jushi Holdings, NVIDIA, and Skillz Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.