Investors should use market volatility to enter positions in fundamentally sound stocks. Two such names are Tesla (NASDAQ:TSLA) and Peloton (NASDAQ:PTON), and they are worth buying on market weakness based on their popularity and product traction.It’s been a strong start to October thus far for the tech sector, with the Nasdaq-100 Index (QQQ) bouncing sharply from its September lows and extending its year-to-date gain to 19% after a brief pullback. This significant outperformance is despite inflation concerns and the possibility of rate hikes as early as 2023, which could make it more difficult to justify the valuations we’re seeing among high-flying growth names. However, while the market as a whole remains quite expensive, two names remain reasonably valued as long as they can continue to execute on their growth plans. These two names are Tesla (TSLA) and Peloton (PTON), and while they’re not on buy ratings, they are names worth keeping at the top of one’s shopping list if we do see some turbulence in the market. Let’s take a closer look at both names below:
(Source: TC2000.com)
Tesla and Peloton have little in common, with the latter company being a tech-leisure name and the other being an auto manufacturer with industry-leading self-driving technology. However, both companies have performed exceptionally well since the March 2020 lows, with Peloton gaining more than 400% even after its recent correction and Tesla up a whopping 1100%. At current levels, neither name offers a large enough margin of safety, but with the margin expansion profiles each have, and their strong revenue growth rates (50%+ revenue growth rates), I believe both names are buy-the-dip candidates if we do get a sharp sell-off in the coming months. Let’s dig into Tesla a little closer below: