Finding promising stocks to steer through the future year in the constantly changing financial markets is both a strategic challenge and a thrilling opportunity.
With the S&P 500 up 20%, investors are recognizing the subtleties of a reviving market as we approach 2024. A sharp eye and a nuanced strategy are necessary to maintain the delicate balance between capturing the climb of promising stocks and avoiding potential overvaluations.
In this post, we choose the top 10 most promising stocks for 2024 by examining their past results, projected growth rates, and the general market factors that are influencing their futures.
10 Most Promising Stocks to Buy for 2024
These promising stocks, spanning diverse sectors from technology and e-commerce to transportation and electric vehicles, present a comprehensive outlook for investors seeking a blend of resiliency and growth potential in their portfolios.
1. Alphabet (GOOG, GOOGL):
Alphabet takes the lead as a top promising stock for 2024, driven by the dual forces of advertising and artificial intelligence (AI) proliferation. With revenue streams from ad sales through Google and YouTube, Alphabet saw a 9% rise in ad revenue in the third quarter, signaling a positive trajectory. The introduction of the Gemini generative AI model positions Alphabet for future growth, and with a modest price-earnings ratio of 20, the stock appears undervalued.
Alphabet’s significant investments in generative AI, particularly in Google search and cloud services, showcase its commitment to technological advancements. With a compelling Q3 2023 revenue of $76.7 billion and a forward-thinking approach to AI integration, Alphabet remains attractively priced, presenting a prudent investment option.
2. Amazon (AMZN):
Amazon secures the second spot as a top promising stock for 2024, with CEO Andy Jassy’s efficiency initiatives driving a remarkable improvement in margins throughout 2023. Despite challenges in its Amazon Web Services (AWS) cloud computing business, the company’s overall revenue surged by 13% in the latest quarter. Amazon’s focus on maintaining efficiency, combined with the anticipated demand for AWS driven by artificial intelligence, positions it for a prosperous 2024 with improved margins.
Jassy’s strategic approach, distinct from his predecessor Jeff Bezos, instills confidence in Amazon’s ability to sustain its gains. As the company’s business hits its stride, investors can expect a banner year ahead, navigating the evolving landscape with resilience and growth potential.
3. Visa (V):
Operating in the commercial services sector, Visa emerges as a top promising stock with a market cap of $521 billion. Known for its payment processing network and related services, Visa’s primary income source comes from fees generated through transactions. The company’s impressive operating margin of 64% sets the stage for ongoing network investments, shareholder dividends, and substantial share buybacks.
While Visa’s dividend yield may be modest, its history of consistent profitability and a newly authorized $25 billion share buyback program highlight the company’s commitment to shareholder value. With built-in inflation protection and an expectation of double-digit growth in EPS for fiscal year 2024, Visa stands out as a resilient and promising investment option.
4. Microsoft (MSFT):
Microsoft, a stalwart in the technology sector with a market cap of $2.8 trillion, secures its position as a top promising pick. Renowned for developing software and computing services, Microsoft’s key products, Windows and Microsoft Office 365, enjoy global recognition. The company’s significant presence in cloud computing, holding the second spot with a 22% market share, solidifies its standing.
Microsoft’s foray into artificial intelligence, with investments in OpenAI and the upcoming release of an AI-powered version of Windows, positions it at the forefront of a potentially fast-growing market. With a unique blend of exposure to new markets and robust financial strength, Microsoft offers investors an intriguing mix of risk and reward.
5. Meta Platforms (META):
Formerly Facebook, Meta Platforms leads global digital connectivity through its social media dominance with platforms like Facebook, Instagram, WhatsApp, and Messenger. In 2023, CEO Mark Zuckerberg’s vision for efficiency materialized, with Q3 revenue surging 23% to $34.1 billion, surpassing estimates.
Operating in two segments, Family of Apps (FoA) and Reality Labs (RL), Meta Platforms demonstrates resilience despite RL’s ongoing losses. The company’s robust user base supports lucrative targeted advertising, with advertising revenue reaching $33.6 billion in Q3. Priced at around 19 times forward earnings, Meta Platforms offer potential for robust growth as revenue accelerates and operating margins expand.
6. Adobe (ADBE):
Adobe is a $274 billion technology company that focuses in publishing, analytics, and content creation tools. With an estimated 30 million paying subscribers, Adobe Creative Cloud is a prime example of the company’s dominance in the creative software market.
Adobe’s upside in artificial intelligence is evident through practical features like “generative expand” in Photoshop. Analysts anticipate further AI integration driving subscription revenue in 2024 and beyond. With double-digit topline growth and an operating margin of 36%, Adobe emerges as a top promising stock for investors seeking a blend of innovation and financial stability.
7. Booking Holdings (BKNG):
A leading online travel agency with a market cap of $109 billion, Booking Holdings outperformed analysts’ earnings expectations for the past four quarters. In the third quarter, the company efficiently grew its diluted EPS by 66% year over year, accompanied by a 21% revenue increase.
Booking Holdings’ size advantage and expanding inventory of hotels and vacation rentals position it for further market share gains. With post-pandemic travel growth and continued inventory expansion, the company remains a top promising stock for investors eyeing the travel and hospitality sector.
8. Apple (AAPL):
With a $3 trillion market capitalization, Apple is a well-known technological company best known for its iPhone, MacBook Macs, Apple Watch, iPad, and other associated products and software. Apple’s steadfast customer devotion and reliable user experience give its business stability and predictability even in the face of declining sales for some items.
While the company faced sales declines in some segments, its high-margin services business contributed to growth in diluted EPS. With a loyal brand following, Apple remains a top promising stock for investors seeking long-term stability and a consistent track record of customer retention.
9. Li Auto (LI):
Li Auto, listed on NASDAQ with the ticker LI, entered the electric vehicle market with the mass production and delivery of its first electric car in February. The company’s MEGA multi-purpose vehicle features advanced charging capabilities, offering a 500 km range on a 12-minute charge.
Positioned as a key competitor to Tesla in China, Li Auto aims to surpass traditional luxury car brands like BMW, Mercedes-Benz, and Audi in Chinese sales by 2024. With a focus on quality, brand building, and a lineup of new models, Li Auto presents a compelling opportunity in the fast-growing Chinese electric vehicle market.
10. Union Pacific (UNP):
Operating in the transportation sector with a market cap of $141 billion, Union Pacific is a dominant U.S. railroad company providing commercial transportation and delivery services. While its recent quarter saw mixed results due to soft shipping volume and inflationary pressures, the company’s new CEO achieved early wins in operating metrics.
As Union Pacific improves efficiency, generating cash for shareholder dividends and share repurchases, the company is poised to navigate any continued volatility in shipping volumes. With a focus on operational improvements, Union Pacific remains a top promising stock for investors eyeing the transportation sector in 2024.
In conclusion, the pursuit of promising stocks for 2024 unveils a tapestry of opportunities across various sectors, encapsulating the dynamism and resilience of the global market. As we navigate the uncertainties of the financial landscape, the selected stocks, ranging from tech behemoths to innovative players in electric vehicles and travel, represent pillars of strength and growth potential.
The emphasis on long-term viability, operational efficiency, and recognized brand names underscores the strategy for investors seeking stability amid economic fluctuations. The path forward necessitates vigilance, as market dynamics can swiftly evolve. Armed with insights into these compelling stocks, investors are poised to navigate the complexities of 2024, leveraging diverse opportunities and reinforcing their portfolios with assets primed for sustained success in an ever-changing financial ecosystem.
Also read: 10 Best Stocks To Invest In 2024