KEY POINTS: 2 STRONG NASDAQ STOCKS

  • After a strong rally that lasted almost two weeks, the Nasdaq fell on Wednesday.
  • Palo Alto Networks and Amphastar Pharmaceuticals set new highs.
  • Both stocks have the potential to go even higher.

Investors saw respite early this week from the harsh market conditions that have prevailed throughout much of 2022. However, the Nasdaq Composite(^IXIC) dipped on Wednesday, trading down almost a full percent as of 1:30 p.m. ET. Overall, the market community is still struggling with the uncertainty, but two Nasdaq stocks are up and hitting highs.

Indeed, even with all the potential headwinds facing the market, some Nasdaq stocks are still hitting all-time highs. Among the companies setting new price highs throughout their histories, Palo Alto Networks (NASDAQ:PANW) and Amphastar Pharmaceuticals (NASDAQ:AMPH) stood out from the relatively small crowd. Below, we’ll look at those stocks to see what’s driving them up.

Palo Alto Networks

On a down day for Wall Street, shares of Palo Alto Networks rose 1.5 percent early Wednesday afternoon, bringing its year-to-date return to 87%. The cybersecurity firm has received a lot of attention lately, primarily due to the geopolitical threats of cyberwarfare that the Russian occupation of Ukraine poses.

Palo Alto has done an excellent job of publicizing the importance of good cybersecurity. For example, in a news release issued earlier this week, the firm underlined that even though most state and local government organizations are aware of the dangers posed by ransomware infections. Moreover, fewer than half have a ransomware incident response plan if an infection occurs.

Palo Alto has positioned itself to be the preferred provider of cybersecurity services, with many businesses adopting its platform. Revenue has increased by more than 100% since fiscal 2018, with a 30% increase year over year in the most recent quarterly report. Adjusted net income was up modestly, and Palo Alto projected sales growth of 25% to 26% for the entire year, along with earnings per share of $7.23 to $7.30.

There’s a lot of competition in the cybersecurity stock market.  Palo Alto isn’t the only successful firm offering these critical services. Nonetheless, it has outperformed many others to keep its share price up during this slump, and it still holds a solid position to gain from cybersecurity’s resurgence.

Amphastar

Amphastar’s stock has increased 54% since the start of 2022, adding another 1% on Wednesday. The pharmaceutical firm has had considerable success with its intranasal, inhalation, and injectable medications, and investors respond to good outcomes.

Amphastar’s recent financial results, including the fourth-quarter and full-year figures announced earlier this month, reveal the company’s current business. The quarter saw revenue rise 26% year over year, ending 12 months with 25% sales growth. Adjusted earnings more than doubled for both periods, coming in at $0.42 per share for the fourth quarter and $1.37 per share for 2021.

Amphastar’s most significant income boost came from Primatene Mist and epinephrine sales, which saw increases of 60% and 152%, respectively. The firm credited the success of Primatene to a well-funded marketing push, while a new multi-dose vial aided epinephrine sales. In addition, the introduction of the injection emergency kit treatment, Glucagon, provided Amphastar with a valuable new stream of revenue.

Amphastar Pharmaceuticals has filed five abbreviated new drug applications with the FDA. If approved, they will serve markets worth $4 billion and several biosimilar and generic drugs in development. Thus targeting another $25 billion in sales. As a result, investors have high expectations for Amphastar to continue its success, and the stock reflects that potential.

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