Stocks to buy

In 2023, there is expected to be a significant wave of growth in the stock market, with investors looking for opportunities to get ahead. Considering the risk-on sentiment seen in the market following the most recent Fed rate hike, investors are clearly taking the view that monetary policy may shift dramatically at some point this year. 

While a smaller Fed rate hike is generally a good thing for risk assets (and a pause is better), rates are still likely to head higher from here. How high they go, and how long the Fed keeps them high, remains to be seen.

That said, if the market is right, and the Federal Reserve resorts to cuts rather than hikes in the future, the stocks below could go on a tear for the rest of the year.

Let’s dive in!

COIN Coinbase $71.42
NVDA Nvidia $221.73
BROS Dutch Bros $38.86

Coinbase (COIN)

A Bitcoin rests on top of a computer with the Coinbase (COIN) logo and a trading chart.

Source: Nadezda Murmakova / Shutterstock.com

One of the most notable performers in the current market (among many) is Coinbase (NASDAQ:COIN). This past week, COIN stock saw an intra-day move of more than 20% following the recent Fed rate hike. However, it’s clear that investors have found a number of other reasons to get bullish on COIN stock in the near term.

As I discussed in my recent piece, Coinbase is among the more speculative and interest rate-sensitive stocks in the market. Thus, macro factors likely play a bigger role in valuing this company.

That said, this past week saw a judge throw out a proposed class-action lawsuit that would allow investors to sue Coinbase for purportedly offering unregistered securities. Indeed, this potential negative headwind has been hanging over COIN stock for some time, leading to a clear relief rally.

Over the course of the year, how the Fed chooses to react to macro indicators will likely drive significant volatility in COIN stock. For those looking for a higher-beta way to trade the market, this is a stock to keep an eye on.

Nvidia (NVDA)

Closeup of mobile phone screen with logo lettering of nvidia corporation on computer keyboard. NVDA stock.

Source: Shutterstock

A company many long-term growth investors continue to look to, Nvidia (NASDAQ:NVDA) has certainly disappointed over the past year. That said, there are plenty of reasons to believe this is a company that could benefit in an economy driven by accommodative monetary policy moving forward.

Nvdida’s cutting-edge graphics processing unit technology powers exceptional computing capabilities, facilitating the creation of advanced technologies.

Nvidia is leading the way into the technological future by offering robust processing capacities to different applications, including quantum computing. The company has established a software development kit referred to as cuQuantum. This kit leverages Nvidia’s existing GPU software to enable quantum computing by allowing developers to build workflows explicitly tailored for quantum computing and, hence, make the most of this technology.

In July, Nvidia launched a novel platform that unites classical and quantum computing abilities. This robust combined computing platform has driven creativity across various industries, including finance, health and artificial intelligence. It is now utilized to enhance progress in R&D endeavors. 

I think these factors, along with a risk-on environment for growth stocks, could lead NVDA stock to outperform this year.

Dutch Bros (BROS)

Dutch Brothers (BROS) at Papago Plaza in Scottsdale Arizona.

Source: RicoPatagonia / Shutterstock.com

Last on this list of stocks to watch following the recent Fed rate hike is Dutch Bros (NYSE:BROS). A major coffee chain that’s swiftly expanding across the United States, Dutch Bros’ outstanding track record of growth is predicted to continue. This makes it an intriguing stock for investors looking for long-term plays.

I think the company’s growth trajectory will remain intact despite the recent Fed rate hikes. Should these hikes slow, and the economy is able to catch its breath, Dutch Bros could be among the biggest beneficiaries, given its broad economic exposure to the American consumer.

While competition remains fierce, it’s also true that the company’s business model is relatively defensive, no matter what happens. That’s because the inexpensive everyday luxuries Dutch Bros provides, along with its loyal customer base, have significant value. 

The company had a remarkable year of growth in 2022, expanding its store count by 133 locations, bringing its total to 671 stores nationwide despite the obstacles posed by the Covid-19 pandemic. This is especially remarkable as the company only had 370 stores three years prior in 2019.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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