3 Stocks Expected to Generate Wealth in 2024

3 Stocks Expected to Generate Wealth in 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 posted consistent gains of 9% in 2024. More importantly, the stock market appears poised for more upside as the year progresses thanks to strong earnings performance from the index’s top names.

It’s no surprise that analysts were quick to raise their forecasts for where the S&P 500 will be at the end of the year. Bank of America now expects the S&P 500 to reach 5,400 by the end of 2024, up from 5,000 previously forecast. Goldman Sachs raised its forecast to 5,200 last month from 4,700 in December, but it appears the investment bank will have to raise its expectations further since the index has already passed that mark.

This broader stock market rally will be a tailwind for companies like Nvidia (NASDAQ:NVDA), The exchange office (NASDAQ:TTD)And Micron technology (NASDAQ:MU). All three companies benefit from a major catalyst that could help them sustain impressive growth levels in 2024 and beyond.

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

1.Nvidia

Nvidia stock has made an impressive 87% in 2024 as of this writing. And he still has the potential to generate more gains this year thanks to his aggressive product roadmap this should allow it to maintain its dominance in the lucrative sector artificial intelligence (AI) chip market.

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

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

Its revenue in this segment more than tripled year over year in fiscal 2024. And the huge revenue opportunity Huang sees means the company’s data center business company still has a lot of room for growth, especially since it would have a virtual monopoly in the sector. 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 hold on this market. The upcoming chips are four times faster than current-generation Hopper chips for AI training, and they are said to be 30 times faster in AI inference workloads.

The new graphics cards would cost between $30,000 and $40,000, which would be an increase from the $20,000 to $30,000 price range of the current H100 graphics cards. Given that manufacturing these new chips would cost $6,000, Nvidia is likely to make solid profits on its next-generation AI chips.

All of this explains why 10 analysts raised their earnings estimates for the current fiscal year last month. The company is expected to end the year with earnings per share of $22.73, up from $12.96 last year.

As a result, there is a high probability that Nvidia stock will rise in 2024 thanks to its improved pricing power, which is why it would be a good idea to buy this AI stock now at 35 times forward earnings , a discount from its five-year average of 39.

2. The exchange office

Trade Desk stock is up 21% this year, and there’s a good chance it ends 2024 with much bigger gains. The company’s growth is accelerating due to increased spending on digital advertising as well as increasing adoption of its programmatic advertising platform.

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

The Trade Desk’s forecast of $478 million in revenue for the current quarter means its revenue is on track to jump 25% from the year-ago period. This would be an improvement on the growth recorded in the previous quarter.

It’s no surprise why The Trade Desk is experiencing accelerated growth. According to analytics firm eMarketer, programmatic ad spending is expected to grow three times faster than non-programmatic spending. Specifically, the company expects programmatic ad spending in the U.S. to grow nearly 16% in 2024, up from 11.4% last year.

The reason for the faster growth in programmatic ad spending 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 display their ads across different channels based on areas where they can improve audience targeting.

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

3. Micron technology

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

Consensus estimates called for a loss of $0.25 per share on revenue of $5.35 billion. Micron, however, posted a surprise profit as its revenue jumped 58% year over year.

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

The chipmaker’s massive increases in revenue and profit stem from improving dynamics in the memory chip market. According to Micron, the “balance between supply and demand tightened” in the memory industry last quarter, driven by strong demand from AI servers and improving conditions in the personal computer (PC) and smartphone markets.

And supply reductions by memory makers should allow Micron to continue to benefit from a favorable pricing environment.

In total, the memory industry is expected to generate nearly $130 billion in revenue in 2024, an increase of 45% from last year, according to Statista.

As a result, analysts forecast a 56% increase in Micron’s revenue this year, to $24 billion, followed by another 43% jump in fiscal 2025, to $34.5 billion. dollars. This tremendous revenue growth should also translate into stronger earnings power, which is why it would be wise to buy stocks before they skyrocket after the earnings surge.

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

3 actions that will make you richer in 2024 was originally published by The Motley Fool

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