2 Promising Stocks Poised for Rapid Growth in 2024 and Beyond

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2 Promising Stocks Poised for Rapid Growth in 2024 and Beyond

It hasn’t been easy being a stock investor in recent years, with market volatility higher than usual.

The COVID-19 pandemic has seen many stocks soar in 2021 as homebound consumers invest in home offices and entertainment products. However, an economic downturn in 2022 caused another market crash and caused many companies’ stocks to lose what they had gained in the previous year.

Then, in 2023, the market swung in the opposite direction again, with the Nasdaq Composite climbing 43%. Excitement about technology and artificial intelligence (AI) has driven an impressive recovery. And the same index is up about 8% in 2024, seemingly breaking the yo-yo trend that has occurred in recent years.

However, recent volatility highlights the importance of investing in stocks with a long-term perspective. Those who sold in 2022 will not have benefited from the rapid rise that many stocks experienced in 2023 and continue to experience this year.

Therefore, now is the perfect time to strengthen your portfolio by investing in companies that are likely to generate consistent gains in the long term. So here are two hypergrowth stocks to buy in 2024 and beyond.

1.Nvidia

Tech stocks have surged over the past year thanks to the rise of AI. According to Grand View Research, the industry has reached nearly $200 billion in 2023 and is expected to grow at a compound annual growth rate of 37% until at least 2030. This trajectory would see the AI ​​market reach a valuation close to $2 trillion.

In the meantime, Nvidia (NASDAQ:NVDA) has cornered the AI ​​chip market. Last year, the tech giant achieved an estimated 90% market share in AI graphics processing units (GPUs), the chips needed to train and run AI models . Nvidia’s success in the industry has seen its shares rise 294% over the past year, alongside rising profits.

Over the past 12 months, Nvidia’s quarterly revenue increased 207%, while operating profit soared 536%. Additionally, Nvidia’s free cash flow increased 430% to over $27 billion. For reference, competing chipmakers like Advanced microsystems And Intel posted free cash flow of $1 billion and negative cash flow of $14 billion last year.

So, despite new GPU releases from both chipmakers, Nvidia’s lead in AI has potentially pushed it further with larger cash reserves to continue investing in its technology and maintain its supremacy in the market.

2 Promising Stocks Poised for Rapid Growth in 2024 and Beyond

NVDA PE Ratio Chart

Additionally, this chart shows that Nvidia stock is potentially trading at its best value in months, with its price/earnings ratio and price-to-free cash flow ratios have declined by double digits since last July. These are useful measurements for determining the value of a stock, with the lower number representing the better value.

Along with its lucrative role in AI, Nvidia is a hypergrowth stock to consider in 2024 and beyond.

2. Amazon

Amazon (NASDAQ:AMZN) is a technology giant with a market capitalization of $1.8 billion, making it the fifth most valuable company in the world. Since its founding nearly 30 years ago, the retail giant has expanded across multiple industries, going from being an e-commerce titan to cloud market leaderdeveloping space satellites and venturing into grocery, gaming, consumer technology and much more.

The company was one of the hardest hit in 2022 as spikes in inflation dampened consumer spending and sent its shares plunging 50% during the difficult year. However, Amazon pulled off an impressive turnaround last year, which proved its stock’s value as a long-term hold.

In fiscal 2023, Amazon’s revenue grew 12% year-over-year, with operating profit more than tripling to $37 billion. Various cost-cutting measures have brought profitability back to its retail segments. At the same time, the company’s dominant position in the cloud market with Amazon Web Services gives it a promising role in AI. As the world’s largest cloud service, AWS has the potential to leverage its massive cloud data centers and drive the generative AI market.

Chart of AMZN EPS estimates for the next 2 fiscal yearsChart of AMZN EPS estimates for the next 2 fiscal years

Chart of AMZN EPS estimates for the next 2 fiscal years

This chart indicates that Amazon’s earnings could reach nearly $7 per share by fiscal 2026. Multiplying this number by Amazon’s forward P/E of 42 gives you a stock price of 294 dollars.

Compared to its current position, this would see Amazon shares rise 66% over the next two financial years. Along with its dominant positions in e-commerce and cloud computing, Amazon stock is worth buying right now.

Should you invest $1,000 in Nvidia right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daniel Cook has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Advanced Micro Devices, Amazon and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

2 Hypergrowth Stocks to Buy in 2024 and Beyond was originally published by The Motley Fool

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