3 Breakout Stocks to Buy Now

After this week’s incredible recovery in the market that obliterated any bears who were caught offsides, there are several stocks breaking out to new highs that could be worth a look at this time. Breakouts are always a great way to gauge the overall level of bullishness in the market, which is why it's so nice to see some of the biggest names in the market making constructive moves after plenty of negative sentiment dominating headlines on Monday. What’s nice about buying stocks at breakout levels is that there is little to no overhead resistance, which means they could trend nicely if they can hold onto their gains at new highs.

Investors can even use technical breakouts as logical long-term entry points in quality companies that are making their way out of a period of consolidation. Keep in mind that if a stock can’t hold its breakout price level, traders and investors will know exactly when to consider exiting the position, which means defining risk for breakouts is quite straightforward. Are you sold on why buying breakouts can be such a profitable strategy? If so, keep reading on for a brief overview of 3 breakout stocks to buy now.

Facebook (NASDAQ:FB)

There are plenty of reasons to consider adding shares of this mega-cap tech company, including the fact that the social media giant is hitting new all-time highs ahead of its Q2 earnings release next week. Consider the fact that Facebook is taking advantage of a huge secular shift towards digital advertising, which is a long-term trend that could reward shareholders for years to come. The company’s social media networks like Facebook and Instagram are an advertiser’s dream since they allow for targeted ads and help companies to leverage consumer data.

The company also recently won a partial victory over the FTC thanks to a favorable court ruling on June 28th, which is certainly a positive for Facebook in the near term. While antitrust concerns will linger over the tech giant in the coming months, it’s still a breakout stock worth buying given how profitable Facebook’s business model is and how quickly ad spend is recovering following the pandemic.

Paypal (NASDAQ:PYPL)

Paypal is arguably one of the most exciting fintech stocks to own for the long-term, and the fact that the company is breaking out to new all-time highs ahead of its earnings announcement next week could mean that institutional investors are expecting fireworks from the report. The company’s digital and mobile payment solutions are used by consumers and merchants all over the world and have plenty of upside given long-term trends like more consumers shopping online. It’s hard to envision a future where physical cash is the primary payment method, which means a business like Paypal has a fantastic opportunity to capitalize on the growth of the digital payments space.

Last quarter, Paypal saw its revenues rise by 31% year-over-year thanks to a 50% increase in total payment volumes. The company boosted its forward guidance after the strong Q1 report and is seeing a lot of net new active accounts, which is another positive to consider if you are looking to start a long-term position in the stock. Finally, Paypal’s move into the cryptocurrency space could be a massive opportunity for the company over the long term, particularly if we see another rally in the crypto market later this year.

Snapchat (NYSE:SNAP)

Another breakout stock worth buying at this time is Snapchat. The social media stock closed up over 23% following a blowout Q2 earnings report and is very likely the top social media stock not named Facebook to own going forward. The company’s camera application is attracting plenty of new users on a consistent basis, and there is clearly a lot of advertising potential given that its user base primarily consists of younger demographics.

Snapchat’s Q2 earnings were quite impressive, as the company reported revenue growth of 116% year-over-year to $982 million, which was the highest quarterly growth for the company over the last four years. The company’s daily active users also increased 23% year-over-year to 293 million, which is another impressive figure that confirms the company’s network continues to expand at a torrid pace. As long as the stock can hold its post-earnings gap, it could be a breakout worth buying.