Investing in stocks has been a roller coaster ride in recent years, with turbulent market conditions causing palpitations among investors. The COVID-19 pandemic propelled certain stocks sky-high in 2021 as consumers pivoted to home-based work and entertainment setups.
Yet, the economic slump of 2022 brought about a harsh reality check, wiping out gains and leaving investors reeling. Nevertheless, 2023 witnessed a remarkable turnaround with the Nasdaq Composite surging by a whopping 43%, fueled by tech and AI enthusiasm. In 2024, the market seems to be breaking free from the erratic cycle of recent years, offering a glimmer of hope to investors.
This rollercoaster underscores the significance of adopting a long-term investment outlook, steering clear of knee-jerk reactions to market fluctuations. Now is the opportune moment to strengthen your investment portfolio by focusing on companies with a promising trajectory for sustained growth. Here, we unveil two hypergrowth stocks that merit attention in 2024 and beyond.
A Splendid Tech Play: Nvidia Taking the AI Arena by Storm
The tech sector has witnessed an upsurge in the past year owing to the AI boom. Industry reports from Grand View Research indicate that the AI segment soared to nearly $200 billion in 2023, with projections suggesting a robust compound annual growth rate of 37% through at least 2030. This trajectory could potentially catapult the AI market valuation close to $2 trillion.
Nvidia, a frontrunner in AI chips, has successfully asserted its dominance in the market. With an estimated 90% share in AI graphics processing units (GPUs), pivotal for AI model training and functioning, Nvidia has been a beacon of success. The company’s stock has surged by a staggering 294% over the past year, accompanied by soaring earnings.
In the preceding 12 months, Nvidia has witnessed a remarkable 207% surge in quarterly revenue, alongside a meteoric 536% spike in operating income. Moreover, the company’s free cash flow has surged by a monumental 430% to over $27 billion. These figures dwarf those of competitors such as Advanced Micro Devices and Intel, with free cash flows of $1 billion and negative $14 billion respectively.
Despite the release of new GPUs by competitors, Nvidia’s pioneering foray into AI has positioned it at the vanguard, bolstered by substantial cash reserves to fuel continual technological advancements and safeguard its industry supremacy. The recent charts indicate that Nvidia’s stock is potentially trading at an optimal value, underscored by declining price-to-earnings and price-to-free-cash-flow ratios since July last year.
Given its instrumental role in AI and the promising future it holds, Nvidia emerges as a compelling hypergrowth stock for discerning investors eyeing steady gains in 2024 and beyond.
Amazon: A Tech Titan with Multifaceted Domination and Enduring Growth Potential
Amazon, a tech colossus with a staggering market cap of $1.8 trillion, stands strong as the fifth most valuable company globally. From its inception nearly three decades ago, the retail giant has diversified across multiple sectors, evolving from an e-commerce giant to a trailblazer in cloud computing, space exploration, grocery, gaming, and consumer tech.
The company weathered the storm of 2022, combating inflation-induced drops in consumer spending that led to a 50% dip in its stock value. However, Amazon orchestrated a remarkable turnaround in the subsequent year, reaffirming its mettle as a steadfast long-term investment.
In fiscal 2023, Amazon witnessed a 12% year-over-year revenue spike, with operating income surging by over threefold to $37 billion. Strategic cost-cutting measures resuscitated profitability across its retail segments. Amazon’s enviable position in the cloud segment, spearheaded by Amazon Web Services (AWS), positions it for a promising role in the AI realm.
As the paramount cloud service provider globally, AWS leverages its expansive cloud data centers to steer the generative AI market. Chart projections indicate that Amazon’s earnings could surge to nearly $7 per share by fiscal 2026. With a forward price-to-earnings ratio of 42, this could potentially push the stock price to $294, translating to a 66% surge over the next two fiscal years.
Backed by its dominion in e-commerce and cloud computing, Amazon presents an enticing buying opportunity for investors seeking robust growth prospects in the present landscape.
Reflecting on these compelling narratives from the tech realm, it becomes evident that both Nvidia and Amazon are perched on the brink of substantial growth trajectories, offering investors a chance to ride the wave of innovation and prosperity in 2024 and beyond.