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The stock market fell more than 25% in 2022, but it exploded again in 2023, and as history shows, there’s more to come.of S&P500 It closed just shy of its all-time high at market close on Tuesday. If it eventually hits a new all-time high, that event and a 20%+ rally from recent lows will mark the beginning of the next bull market.
So why does it matter? Since 1957, bull markets have lasted on average nearly five years, giving investors an average return of just over 169%. Back to the beginning of the deal. Nasdaq Composite 1972, history shows that every year Continue The market recovery has helped the tech-heavy index post an average annual gain of 19%.
The economy is generally unpredictable, so things could get much worse before they get better, but historical data suggests a good year ahead for investors.
There are many reasons to buy a stock, many of which include the expectation that the stock will ultimately make a profit for the investor. One reason is that bull markets tend to benefit many stocks. Here are the top 10 growth stocks to buy in 2024 before the bull market takes hold.
Image source: Getty Images.
1. Alphabet
Significant decline in digital advertising and pause in cloud spending growth will hurt in 2022 alphabet (Google 0.40%) (GOOG 0.40%) Although the situation is difficult, economic improvement is sparking a recovery. Google remains the global search leader, the world’s largest online advertiser, and the cloud infrastructure provider of the “big three” and will continue to underpin its fortunes.
Perhaps the biggest catalyst is Alphabet’s work on artificial intelligence (AI). Alphabet recently unveiled Gemini, a program it claims is the most advanced generative AI system ever. We also offer over 100 pre-built AI models and custom tools to improve user productivity via Google Cloud.
This gives Alphabet multiple catalysts for stock price growth in 2024. The stock is trading at four times its forward selling price, making the stock historically cheap.
2. Amazon
Economic headwinds from soaring inflation weighed on Amazon (AMZN -0.36%) In 2022, we are starting to see the buds of growth. Digital retail is recovering, and AI is increasing cloud spending and accelerating two of its biggest growth areas.
The company also has a stake in AI, offering all its top generative AI models to its cloud customers via Amazon Web Services (AWS). The company continues to integrate AI into every aspect of its operations, increasing productivity in the process.
The twin tailwinds of an improving economy and AI will propel Alphabet further. The stock is a bargain, as it trades at just 2x forward sales.
3. MercadoLibre
mercadolibre (Meri 4.20%) Probably the least well-known company on this list. The company is a leading provider of e-commerce and digital payment services in Latin America, and business is strong. Despite experiencing record growth last year, in the third quarter sales increased by 69% and operating profit increased by 194%.
This trend is expected to continue. The adoption of e-commerce in this region is the fastest in the world, with a population of about 668 million people, twice that of the United States, so the pool of potential customers is much larger.
In addition to MercadoLibre’s expanding margins and strong cash flow, investors shouldn’t be fooled by this Latin American powerhouse.
4.Microsoft
microsoft (MSFT 1.00%) The company faced the same headwinds as its technology rivals, but responded by investing $13 billion in OpenAI, the creator of ChatGPT, to start an AI gold rush. What followed was a series of activities to integrate generative AI tools across a range of products and services. and AI cloud products. The company’s AI-powered digital assistant Copilot has seen strong demand and is the centerpiece of Microsoft’s “fastest growing $10 billion business” in history.
The demand is definitely there. Microsoft’s Azure cloud revenue growth outpaced its competitors in the third quarter of the calendar year, with 3 percentage points of that growth coming from AI demand.
The company’s stock is selling for 32 times forward earnings, which is especially reasonable given the outlook.
5. Nvidia
Nvidia (NVDA -0.20%) The processor has long been the gold standard in gaming, data center, and artificial intelligence (AI) use cases, capitalizing on the generative AI boom that occurred last year. As a result, the AI chip shortage is expected to last until 2024. NVIDIA is expanding production to meet accelerating demand and continues to invest in research and development to create ever-improving solutions.
The company has achieved triple-digit year-over-year sales and profit growth in each of the past two quarters, and the surge in demand for AI is expected to continue. Nvidia’s price-to-earnings (PEG) ratio is less than 1, making it a bargain compared to the broader market.
6. Palantir Technologies
Based on decades of experience, Palantir Technologies (PLTR 0.48%) We were already ready when AI became popular last year. The company quickly pivoted and added generative AI models to its repertoire that work in conjunction with Palantir’s AI-powered data analytics. The resulting artificial intelligence platform (AIP) is attracting strong interest, with management stating that “the demand for AIP is unlike anything seen in the past 20 years.”
The stock price may seem expensive at 11 times expected sales, but management has said that Palantir is “qualified for inclusion in the S&P 500” after posting profits for four consecutive quarters, based on the company’s recent financial results. stated in the announcement. As one of the few pure AI stocks, Palantir is well-positioned to benefit from the ongoing AI gold rush.
7. Roku
Despite several punitive years, Roku (Roku -0.69%) remains the most widely used streaming platform in the world, accounting for 51% of the market. Last year’s ad spend shortfall is starting to improve, and with 76 million active accounts and multiple viewers, this is an attractive opportunity for advertisers to ignore, driving advertising growth on the platform. are doing.
Additionally, the long-term tailwinds of cord-cutting and deteriorating broadcast viewership are driving the continued shift of advertising from broadcast to streaming. Roku is the only place he can reach such a loyal audience, where he spent 26.7 billion hours, or about 3.9 hours per day. And with forward sales at roughly 3x, investors are getting a bargain.
8. Shopify
The economic downturn is largely in the rearview mirror, but things are getting better. Shopify (shop 0.12%). E-commerce spending is back to growth, and as a leading provider of software tools for online sellers, Shopify is positioned to grow. The company releases new generative AI tools to help sellers thrive and holds a minority stake. global e-onlinehelps merchants expand into international markets.
Shopify cut jobs, scaled back its logistics business and streamlined its operations last year to focus on its mission of empowering digital retailers. This has driven strong growth and profitability, making Shopify an attractive opportunity for investors.
9. Tesla
tesla (TSLA -3.67%) has a reputation as a battleground stock, but continues to defy its detractors. Last year, the Model Y was the first electric car to become the world’s best-selling car by a wide margin. Despite headwinds and price adjustments (which led to a temporary decline in profits), the company continued to push further into the automotive mainstream.
Things will become even more favorable for Tesla as inflation subsides and interest rates are expected to fall next year. This could help the company return to its long-term production goal of 50% annual growth, while also expanding profit margins.
Finally, 5x forward sales is a pretty reasonable valuation, especially considering the stock price has increased more than 2,300% over the past decade.
10. Trade Desk
Some investors are surprised by the economic impact of the aforementioned decline in marketing spending in 2022. trade desk (TTD -1.65%).The company’s self-service digital advertising platform actually works with Alphabet and meta platformposted growth even as its rivals suffered year-over-year revenue declines.
“Over the past few quarters, we’ve gained more market share than at any time in our history,” CEO Jeff Green said late last year. His Koa AI co-pilot, recently released by The Trade Desk, should further this trend and help advertisers get the most out of their ad campaigns.
Finally, with a price-to-earnings ratio (PEG) of less than 1 (the standard for a cheap stock), Tradedesk is an attractive bargain.
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