As the year comes to a close, the stock market has shown remarkable resilience, with the S&P 500 experiencing an impressive 8.9% surge in November and an additional 3% uptick in December as of the 13th. While the last two months traditionally favor stocks, the outlook for 2024 remains uncertain, leaving investors on the lookout for potential gems that could shine in the coming year. In this analysis, we spotlight two mega-cap stocks poised for substantial growth in 2024, offering promising opportunities for investors. But before we delve into these market giants, take a moment to explore the tools and EAs for trading at 4xPip, your go-to resource for maximizing your trading strategies.
Nvidia
Semiconductor powerhouse NVIDIA Corporation (NASDAQ: NVDA) has been a standout performer this year, boasting an astounding 230% increase as of December 14. Additionally, specializing in manufacturing graphics processing units (GPUs) for various applications, including computers, gaming consoles, and cars, Nvidia has become a dominant player in the rapidly growing technology industry. The company’s success in 2023 resulted from the soaring demand for its AI chips in supercomputer data centers. Moreover, major customers, including tech giants like Amazon, Alphabet, Tesla, Microsoft, and Meta, have contributed to NVIDIA’s impressive performance.
Nvidia’s recent quarter showcased record revenue of $18.1 billion, with a substantial $14.5 billion stemming from data centers, up 279% year-over-year. Impressively, its gross margin reached 74%, highlighting the company’s efficiency and profitability. Despite the significant stock price surge, Nvidia remains attractively valued with a forward P/E of 24 and a five-year P/E to growth (PEG) ratio of 0.48. In the fiscal fourth quarter, Nvidia is projecting a revenue of $20 billion, and analysts are forecasting $88 billion for the next fiscal year. This positions Nvidia well to achieve another year of robust returns in 2024.
Amazon
Amazon.com Inc (NASDAQ: AMZN) has seen a commendable 74% year-to-date increase in its stock, setting the stage for continued growth in 2024. Notably, the company strategically curtailed expenses, with a mere 5.8% year-over-year increase in operating expenses in the third quarter. This efficiency drive, coupled with a 12.8% revenue increase for the same period, contributed to a remarkable 244% rise in net income year-over-year.
In 2024, as we anticipate a decrease in interest rates, Amazon stands to benefit significantly in its two core businesses. We expect lower inflation and interest rates to boost AWS, its leading cloud computing division, by opening up corporate IT budgets. Furthermore, the e-commerce business is poised to thrive as consumers experience reduced inflation. Piper Sandler recently raised its price target for Amazon to $185 per share, foreseeing a 26% increase over its current price of $147 per share. With a forward P/E of 39, Amazon appears fairly valued, making it a compelling choice for investors seeking growth opportunities in 2024.
Summary
In Conclusion, 2024 holds the promise of continued growth for mega-cap stocks Nvidia and Amazon. As technology and e-commerce continue to shape the future, additionally, these industry leaders are well-positioned to capitalize on evolving market trends. Investors eyeing substantial returns in the coming year should also keep a close watch on these two giants as they navigate the evolving landscape of the stock market.
