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2023 has been a far better year for my ISA compared to 2022. We’re now halfway through the year, and my portfolio is already up by double digits. Yet there continue to be many lucrative buying opportunities in the stock market today. And two firms from my best stocks to buy list that I’ve recently been loading up on are Keywords Studios (LSE:KWS) and MongoDB (NASDAQ:MDB).

AI vs Keywords

As a quick reminder, Keywords Studios is a critical supplier of talent services to the video game industry. The company owns a global network of development studios that work alongside some of the biggest publishers in the world, including Electronic Arts, Activision Blizzard, and Ubisoft.

This picks & shovels play in gaming has proven immensely profitable over the years. After all, the stock price has increased roughly 1,120% over the last decade. That’s an average 28.4% annual compounded rate of return, making it by far one of the best stocks to buy in 2013.

But in 2023, its performance has been pretty dreadful. Year-to-date, the shares have fallen by over 35% as investors fear AI may soon disrupt this company’s business model. While this has some validity, the reaction seems overblown, in my opinion.

Several leading AI tools used in game development today, such as Yokozuna Data and KantanAI, are owned by Keywords. And management has been actively ramping up its investments in this space in preparation for the eventual technological shift.

While the stock trades at a high P/E ratio of 35, compared to its historical track record, that’s pretty cheap. And it’s why I’ve been drip-feeding more capital into my position.

A new database is needed

Like many tech stocks, MongoDB got pummelled into the ground last year, falling by over 60%! And while the stock certainly got ahead of itself before that in terms of valuation, this again looked like an overreaction. That’s why I’ve been steadily buying more since June last year. And considering the stock has climbed over 40% since then, my conclusion seems spot on (at least for now).

Story continues

MongoDB is a software-as-a-service company attempting to disrupt database titans like Oracle. Instead of using a traditional relational table approach designed in the 1970s, the company uses a new method called document-oriented.

Document-oriented databases aren’t always the best choice. But when it comes to massive unstructured data, much like what’s used to train machine learning algorithms, they’re much faster than relational table databases. So, it’s no surprise that in its latest earnings report, revenue grew by almost 30%, with losses shrinking from $77.3m to $54.2m year on year.

As an unprofitable enterprise, the risk is undoubtedly elevated. And with the cost of external capital increasing, shareholders will likely encounter further volatility in the future. But given the impressive technology and track record of consistently beating expectations, I’m cautiously optimistic about the long-term growth potential of this business. That’s why I believe it’s one of the best stocks to buy today.

The post My 2023 best stocks to buy list: shares I think are poised for a recovery appeared first on The Motley Fool UK.

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Zaven Boyrazian has positions in Keywords Studios Plc and MongoDB. The Motley Fool UK has recommended MongoDB. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2023

Article originally posted on mongodb google news. Visit mongodb google news