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Following a strong 2023, the S&P 500 started 2024 with a solid 4.5% gain. The main question for investors is: Are these gains temporary, or is this the beginning of another sustained bull market?
Market legend and billionaire wealth manager Ken Fisher has been keeping a close eye on the current situation and has some thoughts on where we might be headed.
“The strong performance in global stocks in January does not allay doubts,” he said, adding, “Interest rates are going to rise for a long time!” World economic recession! Regional wars intensify! You know all the reasons why bears claim this bull market is doomed and extend their claims to 2023. Not again. Markets move based on surprises, whether positive or negative, things that people don’t know much about or pay attention to. This year, these surprises will be even better and will shock everyone again like in 2023. ”
But word is cheap and money speaks, so take a look at two megacap tech stocks that Fisher is buying in hopes of solid upside: Nvidia (NASDAQ:NVDA) and Metaplatforms (NASDAQ:META). Let’s. This year’s profit. A closer look may reveal why Mr. Fisher makes such a big purchase.
Nvidia
First on Fisher’s list is Nvidia, a fast-growing leader in the semiconductor chip industry. Nvidia is currently his third largest publicly traded company in the world after Microsoft and Apple. The stock price has been rising rapidly over the past few years. In the last 12 months he has increased by over 250%.
A key driver of Nvidia’s success in recent years has been the high quality of its chipset products. Nvidia has long been a leader in the GPU segment, and these chips were originally designed to meet the processing needs of high-end computer graphics programs, making them popular with computer gamers, professional graphic designers, data center operators, and more recently, out-of-the-box customers. We are acquiring users who can. – In AI applications. Each of these areas requires high-capacity chips, and Nvidia has built a reputation as a trusted brand for those users.
The data center industry is a particular bright spot for Nvidia. The company’s market share in GPUs for the data center industry accounts for approximately 83% of Nvidia’s total revenue. Nvidia reported in raw numbers that its revenue to data centers was $18.4 billion in its fourth quarter 2024 report. This marked a 409% increase over the previous year.
Overall, NVIDIA’s fiscal 2024 fourth quarter total revenue was $22.1 billion, a record for the company and an increase of 265% year-over-year. Fourth quarter sales also exceeded expectations by $1.55 billion. In the end, Nvidia realized non-GAAP EPS of $5.16 per share. This beat expectations by 52 cents per share.
As for billionaire investor Ken Fisher, he’s clearly bullish on Nvidia. In his fourth quarter of 2023, the last quarter of the calendar year, he purchased 594,243 shares of stock, bringing his total holdings in NVDA to 8,943,979 shares. At current prices, Fisher’s Nvidia stock is worth $6.58 billion.
In addition to Ken Fisher, Nvidia also caught the attention of Loop Capital analyst Ananda Barua. 5-Star experts are optimistic about NVIDIA based on its solid data center business, exposure to the growing AI industry, and its potential to continue to realize strong returns.
“Our research suggests that NVDA has significant upside potential for Street revenue and EPS from 2024-2025 and 2025-2026 from data center GPUs (Figure 1 and 3). Specifically, 2024/2025 and 2025/2026 revenue and EPS of $132.4 billion and $30.00 (vs. Street of $95.8 billion and $21.76) and $175.6 billion and $40.00. ($110 billion vs. For those looking at quarterly trends…NVDA’s 1. Quarterly results vs. Street, 2. Guidance vs. Street. It shows a clear pattern of beats and raises,” Baruah opined.
Quantifying this stance, Baruah rates NVDA stock a Buy, with a price target of $1,200, implying a solid 63% upside over the next 12 months. (Click here to see Baruah’s track record)
High-end tech stocks always get some love from Wall Street, and NVIDIA stock has 38 recent reviews from Wall Street analysts. These reviews include 36 Buys and just 2 Holds, resulting in a consensus rating of Strong Buy. (look Nvidia stock price prediction)
meta platform
The next stock we’ll look at is Meta, the parent company of Facebook and the newest member of the “trillion dollar club.” With a market capitalization of $1.21 trillion, Meta is the smallest of these mega-cap stocks, yet remains the world’s sixth-largest publicly traded company.
In addition to Facebook, the company’s flagship social media company, Meta also owns Messenger, Instagram, and WhatsApp. In the company’s last quarterly report, covering the fourth quarter through full year 2023, Meta reported viewership growth across all of its social media platforms. The company’s DAP (Daily Active Family Members) totaled 3.19 billion in December 2023, an 8% increase over the previous year. The monthly active number (MAP) for the month was 3.98 billion, an increase of 6%. Facebook accounts for the largest share of these users. The platform had 2.11 billion daily active users in December 2023, marking a 6% year-on-year increase. Facebook’s monthly active users (MAU) reached 3.07 billion, an increase of 3% year-on-year.
For Meta, active users are a key metric. The company leverages these numbers to generate advertising revenue, and in the fourth quarter of 2023, Meta’s total revenue will be his $40.11 billion, an increase of 25% year-over-year, compared to his forecast of $900 million. $40 million more. Annual revenue increased 16% to $134.9 billion. The company’s GAAP-measured EPS for the quarter was $5.33 per share, beating estimates by 39 cents per share. META stock is up more than 33% so far this year and about 175% over the past 12 months.
While these numbers indicate solid returns, there are better options for return-conscious investors. Meta announced the start of its regular quarterly dividend in its quarterly report. The first payment is set at 50 cents per share and is scheduled for March 26th. At $2 per year, you get a modest forward yield of 0.42%. The key here is not the current yield, but a stronger commitment to return on capital. The dividend announcement was also accompanied by a $50 billion increase in the company’s share buyback authorization.
All of this makes for an interesting backdrop for Ken Fisher’s strong embrace of meta. In the fourth quarter of 2023, the billionaire added his 414,520 shares of META stock to his portfolio. His total stake in Meta currently stands at 5,456,958 shares, worth $2.55 billion.
Turning to the analysts, we talk to Ivan Feinseth, a 5-star analyst at Tigress Financial. He believes Meta’s lead in social media and its push into AI are key points for the stock.
“META is well-positioned to benefit from ongoing innovations. Enhanced integration of AI capabilities and new product introductions will further increase user engagement and continue to accelerate revenue growth. META continues to benefit from its dominant position in digital advertising and growing user engagement. META’s continued advertising success continues to be driven by strong click-to-action conversions. “This reflects improved ad performance through an engaging in-platform advertising experience that connects advertisers with marketing data and leverages AI across the advertising platform,” said Feinseth.
To this end, Feinseth gives META stock a Strong Buy rating and a $575 price target, implying a 23% upside by the end of this year. (Click here to see Feinseth’s track record)
Generally speaking, there have been 41 recent reviews on the META stock from the Street, with 38 Buys, 2 Holds, and 1 Sell, resulting in a Strong Buy consensus. The stock is trading at $468.03, with an average price target of $529.02 and a potential one-year upside of 13%. (look Meta stock price prediction)
To find good ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, the tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. Content is for informational purposes only. It is very important to perform your own analysis before making any investment.
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