I love Google, but I hate Alphabet Inc (NASDAQ:GOOGL).
Yes, GOOGL has been an incredible performer for investors in 2017, with the premier growth stock up more than 25% year-to-date. And it’s not that I don’t like the company’s products. In fact, I love the flagship search site, and I think its search algorithm is one of the greatest inventions ever.
What I hate about Alphabet is its silly name. I mean, why go from Google to Alphabet? That’s like changing your name from Snake Plissken to John Smith.
OK, OK. My real beef with Alphabet is the sycophantic following the stock has among the fast money, and among those portfolio managers using the stock as a “rental long” (i.e., a place to park money for long exposure).
That rental long money has helped GOOGL rocket past the $1,000-per-share mark, and that’s a significant milestone. But despite the upside in Alphabet, I think there are many other stocks that offer investors greater growth opportunities than GOOGL.
Here are seven stocks with more upside than Alphabet.
Stocks With More Upside Than Alphabet: Amazon (AMZN)
I can already here you saying, “What? But Amazon.com, Inc. (NASDAQ:AMZN) just surged over $1,000 too!”
Indeed, that’s true, but that doesn’t mean there isn’t more room to run for this growth stock to buy. This stalwart online game changer not only owns the retail space, but it also is quickly becoming the leader in cloud computing.
In fact, Amazon Web Services (AWS), the cloud computing division, reported $3.66 billion in revenue for Q1 2017. That metric represents a 42% surge from the same quarter a year-ago quarter. And perhaps the best part of this is that Amazon Web Services sales represent just 10% of Amazon’s $35.7 billion in total revenue for the first quarter.
With fundamentals like that — as well as Amazon initiatives such as lowering Prime rates for low-income customers, and testing its own “smart” brick-and-mortar stores — AMZN shares can easily go to up another 50% from here.
Stocks With More Upside Than Alphabet: Thor Industries (THO)
Recreational vehicle maker Thor Industries, Inc. (NYSE:THO) is perfectly positioned to keep taking advantage of America’s thirst for fun.
The company recently reported blowout fiscal Q3 earnings of $2.11 per share on revenue of $2.02 billion. Most analysts were expecting EPS of just $1.86 a share on revenue of $1.96 billion. THO shares gapped up nearly 13% on the news — a welcome relief after the selloff in the shares in March.
I think that as long as an aging American demographic wants to continue spending their money to get away from it all and see the country, then the maker of the Airstream, Bison and Keystone brands (a brand I personally own), will continue to grow … and continue to fuel THO shares higher.
Stocks With More Upside Than Alphabet: Facebook (FB)
OK, this is another growth stock to buy that’s being used by the fast money and portfolio managers as a rental long, I’ll grant you that.
Yet social media giant Facebook Inc (NASDAQ:FB) also is one of the best, most profitable companies out there. In fact, the company has grown earnings so fast over the past several quarters, as well as the past several years, that Investor’s Business Daily has an EPS Rating of 99 on the stock. That means FB is outperforming 99% of all companies in terms of short- and long-term earnings growth.
The big question is can FB continue to grow, and can the stock continue to soar, at the kind of pace it’s had in recent years?
While some critics site competition from cites such as Snap Inc (NYSE:SNAP), I think that criticism is way off-base. That’s mostly because anything Snapchat does, Facebook is more than willing to copy and use to its advantage. And Twitter Inc (NYSE:TWTR)? Give me a break.
I suspect FB will own the social media space for many more years, and that the upside in the stock is just beginning.
Stocks With More Upside Than Alphabet: Veeva Systems (VEEV)
The “cloud” is the place to be for growth these days, and that includes cloud-based customer relationship management software firm Veeva Systems Inc (NYSE:VEEV). The company makes software used by the life sciences industry, and as such its customers include the world’s largest pharmaceutical companies, and also mid-level biotech firms and biotech startups.
In February, Veeva reported robust fiscal Q4 earnings that came in well ahead of estimates, with adjusted EPS of 22 cents vs. estimates for 17 cents. Veeva also finished the year with 517 total customers, up from 400 customers the prior year. Like Facebook, VEEV also has been an earnings powerhouse, as it also sports an Investor’s Business Daily EPS Rating of 99.
VEEV shares have responded to the strong fundamentals with a year-to-date surge of nearly 60%. Yet that could just be the beginning for this well-positioned, cloud-based stalwart.
Stocks With More Upside Than Alphabet: Nvidia (NVDA)
The rise of artificial intelligence, or AI, is a trend that’s going to reshape the world. From everything to smart appliances, smart cars and smart everything, the world will soon be powered by AI.
Perfectly positioned to continue benefiting from this trend is Nvidia Corporation (NASDAQ:NVDA).
This growth stock has long been the leader in making processors (GPUs) for computer graphic applications. Yet with the rise of AI, the company’s processors have taken on a new life. The reason is that Nvidia’s products are able to process a lot of information, and do a lot of calculations, at a very high rate of speed — the speed required to run AI applications. Nvidia CEO Jen-Hsun Huang said earlier this year, “Deep learning on NVIDIA GPUs, a breakthrough approach to AI, is helping to tackle challenges such as self-driving cars, early cancer detection and weather prediction.”
Wall Street recognizes this, hence the near-40% move in NVDA shares year to date. How much upside is left? Plenty, as the AI rise of the machines still is in its infancy.
Stocks With More Upside Than Alphabet: Alibaba (BABA)
What do you get when you combine Amazon with the massive and still-young Chinese consumer market? You get the upside in Alibaba Group Holding Ltd (NYSE:BABA).
The online e-commerce portal recently reported revenues that increased by 60% year-over-year; however, its bottom line came in just slightly below expectations.
That slight earnings miss didn’t (and shouldn’t) slow the buying in BABA; shares are up more than 42% year-to-date. The knockout combination of a massive Chinese consumer that’s still growing, along with a greater and greater willingness to make purchases online is only going to drive Alibaba’s top and bottom line higher.
I suspect BABA shares will follow suit.
Stocks With More Upside Than Alphabet: American Express (AXP)
While financial stocks in general have struggled in 2017, it’s tough to deny the long-term strength of sound companies in the growth segments of the financial industry. One of those segments is digital payments, and for most that means use of a credit card.
My preferred form of electronic payment is American Express Company (NYSE:AXP).
In addition to outstanding customer service, the company also is an aspirational brand. Who can forget the pleasure, and the sense of “arrival,” upon getting your first American Express card?
Despite the modest gain in 2017 of 7.7%, AXP shares are positioned to rise rapidly, especially if there is any sort of personal federal income tax reform legislation passed.
If, for example, Congress can get a reduction in marginal income tax rates, the greatest beneficiaries would be those higher-end consumers equipped with an AmEx card. That influx of more money in consumers’ pockets also would funnel right down to American Express’ bottom line … and that will help fuel AXP shares.
As of this writing, Jim Woods was long AMZN and VEEV. He also admits to spending way too much time on Facebook, and to spending way too much money each month buying stuff on Amazon.com with his AmEx card.
