3 stocks that will make you richer in 2024

By | April 1, 2024

It’s almost the end of the first quarter of the calendar year and the good news for investors is that the S&P500 The index has delivered steady gains of 9% through 2024. More importantly, the stock market appears to be trending more upward as the year progresses, thanks to the strong earnings performance of the big names in the index.

Not surprisingly, analysts have quickly increased their predictions about where the S&P 500 could be by year’s end. bank of America now expects the S&P 500 to reach 5,400 by the end of 2024, up from the previous forecast of 5,000. Goldman Sachs raised its forecast last month to 5,200 from 4,700 in December, but it appears the investment bank will have to raise its expectations further as the index has already passed that mark.

This broader stock market rally will be a big boost for companies like these Nvidia (NASDAQ: NVDA), The Trade Bureau (NASDAQ: TTD)And Micron technology (NASDAQ:MU). All three companies benefit from a key catalyst that could help them maintain impressive levels of growth into 2024 and beyond.

Let’s take a look at the reasons why all three stocks are likely to move higher as the year progresses.

1. Nvidia

Nvidia stock has posted an impressive 87% gain through 2024 at the time of writing. And it still has the potential to post more gains this year thanks to its aggressive product roadmap that should allow it to extend its dominance in the lucrative market for artificial intelligence (AI) chips.

Nvidia estimates that data centers are on track to spend $250 billion this year on accelerated computer chips, such as the graphics processing units (GPUs) the company sells.

CEO Jensen Huang says this viable data center revenue opportunity is growing at 25% annually. Nvidia sold $47.5 billion worth of data center chips in fiscal 2024 (which ended in January this year).

Revenue from this segment has more than tripled year-on-year in the 2024 financial year. And the huge revenue opportunity Huang sees means the company’s data center business still has plenty of room for growth, especially considering the company reportedly has a near monopoly in the market. AI chip market with an estimated market share of 95%.

The arrival of the company’s next-generation Blackwell AI GPUs later this year could help Nvidia maintain its firm grip on this market. The upcoming chips are four times faster than the current generation of Hopper chips for AI training, and are said to be 30 times faster in AI inference workloads.

The new graphics cards will reportedly cost between $30,000 and $40,000, which would represent an increase from the $20,000 to $30,000 price range of the current H100 graphics cards. Considering that these new chips reportedly cost $6,000 to produce, Nvidia will likely make a solid profit on its next-generation AI chips.

All this explains why ten analysts have raised their earnings estimates for the current fiscal year in the past month. The company is expected to end the year with earnings of $22.73 per share, compared to $12.96 last year.

As a result, there’s a good chance Nvidia shares will soar higher in 2024 thanks to improved pricing power. Therefore, it would be a good idea to buy this AI stock now at 35 times forward earnings, a discount out of five. -annual average of 39.

2. The Trading Desk

Trade Desk stock is up 21% this year and there’s a good chance it could end 2024 with much stronger gains. The company’s growth is accelerating due to increased digital advertising spend and increasing adoption of its programmatic advertising platform.

The Trade Desk’s AI-powered cloud-based platform is in high demand as it enables marketers to purchase ad inventory, create campaigns, and optimize them using real-time data to deliver stronger returns on investment. advertising dollars spent. That led to a 23% year-over-year revenue increase in the fourth quarter of 2023 to $606 million.

The Trade Desk’s guidance of $478 million in revenue for the current quarter means revenue is on track to increase 25% compared to the same period a year ago. That would be an improvement over growth in the previous quarter.

It’s not surprising why The Trade Desk is witnessing an acceleration in growth. According to analytics firm eMarketer, programmatic ad spend is expected to grow three times as fast as non-programmatic spend. More specifically, the company expects U.S. programmatic ad spend to grow nearly 16% by 2024, up from 11.4% last year.

The reason behind the faster growth of programmatic ad spend is that this method of advertising automates the media buying process using real-time data. Advertisers can bid on ad inventory in real time to keep their costs low and show their ads on different channels, depending on where they can improve audience targeting.

The Trade Desk could therefore end 2024 with stronger revenue growth compared to the 23% revenue growth achieved last year to $1.95 billion. Investors looking for a growth stock would do well to buy the shares right now, as they appear to be built for more upside potential in 2024.

3. Micron technology

Shares of Micron Technology are up 39% this year, and the company’s latest results suggest the bull run is just beginning. The memory specialist crushed Wall Street expectations for the second quarter of fiscal 2024 (for the three months ended February 29) with $5.8 billion in revenue and $0.42 per share in adjusted earnings.

Consensus estimates predicted a loss of $0.25 per share on revenue of $5.35 billion. However, Micron posted a surprise gain as revenue rose 58% year over year.

And the $6.6 billion revenue estimate for the current quarter indicates that revenue is on track to grow at a faster pace of 76% from last year’s quarter.

The huge increases in the chip manufacturer’s top and bottom line figures come from the improvement in the dynamics of the memory chip market. According to Micron, the supply-demand balance tightened in the memory industry last quarter, driven by strong demand from AI servers and improving conditions in the PC and smartphone markets.

And supply cuts by memory manufacturers should ensure Micron continues to benefit from a strong pricing environment.

Overall, the memory industry is expected to generate nearly $130 billion in revenue by 2024, up 45% from last year, according to Statista.

As a result, analysts predict a 56% increase in Micron’s revenue this year to $24 billion, followed by another 43% increase in fiscal 2025 to $34.5 billion. This massive revenue growth should also translate into stronger earnings power. Therefore, it would be a good idea to buy stocks before they soar higher following the post-earnings rally.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Bank of America, Goldman Sachs Group, Nvidia, and The Trade Desk. The Motley Fool has a disclosure policy.

3 Stocks That Will Make You Richer in 2024 was originally published by The Motley Fool

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