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If you want to enter the market in 2024, historical patterns are on your side. According to the analysis of Nasdaq Composite Going back to 1971, after a recovery year like the one experienced in 2023, the tech-heavy index rose an average of 19% each year.
For investors, stock split This is a way to bet on the continuation of a pattern. A stock split occurs when a company splits each share into lower priced units to make each share more liquid and available to smaller investors. While these events don’t impact the company’s fundamentals, they are encouraging signs that the stock is moving in the right direction.
Let’s talk about why we recently split two stocks — Nvidia (NASDAQ:NVDA) and monster beverage (NASDAQ:MNST) — This could be a great purchase in the new year and beyond.
1. Nvidia
Aside from the big crash in 2022, Nvidia’s stock price has risen almost exponentially over the past decade. To keep prices at rock-bottom levels, the company’s management has conducted five stock splits, most recently a 4-for-1 stock split in July 2021. The stock has risen dramatically since then, but it’s not too late for investors to bet on continued success. .
Historically, Nvidia’s growth has relied on its ability to take advantage of new technology faster than its rivals. this is, Graphics processing unit (GPU), was originally designed to render video game visuals before finding another use in cryptocurrency mining.but generative artificial intelligence (AI) may be the big change that determines Nvidia’s future in the near future.
Sales of AI chips in the third quarter led to a 206% year-over-year increase in revenue to $18.1 billion. Nvidia has plenty of room for continued growth, as industry experts expect the market for AI training hardware to expand from $45 billion to $400 billion by 2027. .
To be honest, competition is probably going to get tougher. However, NVIDIA’s economic moat stems from its speed to market, which has led to a strong community of developers building software and servers around its hardware, resulting in less compatibility. They may be reluctant to switch to a competitor.
2. Monster Beverage
Similar to Nvidia, Monster Beverage’s stock price has risen dramatically over the past decade, with continued stock splits (six in total). The most recent conversion took place in March last year, giving investors two shares for every one they previously owned. Despite the $60 billion Market capitalizationthe energy drink maker still enjoys healthy business momentum.
Net sales increased slightly to $1.9 billion, up 14.3% year over year, but the company saw particularly strong growth in its new alcohol business, driven by new product launches such as The Beast Unleashed. Sales increased significantly by 58% to $42.3 million. A line of malt alcoholic beverages — designed to appeal to existing energy drink customers with similar flavors and brands.
Monster’s rapid growth in alcohol highlights the attractiveness of its brand and its ability to diversify its business by leveraging its existing supply chain and distribution network.
with Expected price/earnings ratio (PER) Monster stocks are Nasdaq-100 However, the premium appears to be justified given the earnings momentum. Third quarter net income increased 40% year over year to $452 million.
focus on the basics
While stock splits and historical patterns can give investors confidence in putting money into the stock market, fundamentals are the most important consideration. Nvidia and Monster Energy have performed well in the past. But more importantly, both companies have what it takes to continue to generate returns for investors over the long term.
Should you invest $1,000 in Nvidia right now?
Before buying Nvidia stock, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks What investors can buy right now…and Nvidia wasn’t among them. These 10 stocks have the potential to generate impressive returns over the next few years.
stock advisor We provide investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks every month.of stock advisor Since 2002, the service has more than tripled S&P 500 returns*.
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*Stock Advisor returns as of December 18, 2023
Will Ebifang has no position in any stocks mentioned. The Motley Fool has a position in and recommends Monster Beverage and his Nvidia. The Motley Fool has a disclosure policy.
“History Says the Nasdaq Will Soar in 2024: 2 Great Split Stocks to Buy Before It’s Too Late” was originally published by The Motley Fool.
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