2025 is a solid start. Inflation rates last month were moderate, and the three largest stock market indexes were current as of January 16. The stock market has risen significantly recently, with technology stocks leading the charge in this regard. bull market.
However, not all tech stocks got the memo for impressive price gains. Some of my favorite stocks in this sector are currently trading well below their 52-week highs, but their business prospects still look great. With these various trends in mind, you should consider buying some A year (NASDAQ: ROKU) a MongoDB (NASDAQ: MDB) shares in January.
Here's why.
Let's start with MongoDB. The next-generation database software specialist's trailing sales have grown 49% over the past two years. Free cash flow jumped 520% over the same period:
However, MongoDB stock has only gained 25% in this period. To put that performance in context, the S&P 500 (SNPINDEX: ^GSPC) rose 49% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) a 75% increase.
The database specialist's chart includes a 29% decline since December 9, 2024. The company reported third-quarter results that day, beating Wall Street consensus earnings estimates by 73%, while revenue came in 6% above target average of the analyst. The stock was still crumbling the next day as longtime Chief Fire Officer Michael Gordon also announced his resignation. The company also offered modest guidance for the next quarter, but that should be less interesting because MongoDB has a habit of making its earnings projections low.
And Gordon leaves on friendly terms. He's still making investor conference presentations, and the subject of his departure hasn't even come up for discussion. Instead, Gordon spent most of that fireside chat underscoring how healthy demand is for MongoDB's highly flexible database solutions. In particular, the Atlas cloud database is becoming a popular large-scale data manager artificial intelligence (AI) projects.
I will admit that MongoDB stock is not cheap based on traditional metrics. At the same time, the company has achieved its 74x price-to-earnings ratio by growing sales at a compound annual rate of 45% over the past five years. The recent stock price drop looks like a wide open buying window.
Roku's story is remarkably similar to MongoDB's. Many investors wrote it off as a play on the 2020 coronavirus lockdowns, driving the high-flying market down to Wall Street's bargain basement in 2022 and 2023. The stock has mostly floated sideways since that, including a 19% price reduction in the market. generally prosperous market year from 2024.