After an earnings slump in 2023, analysts expect technology stocks to see earnings growth in 2024. That’s why the sector is a hunting ground for top stock predictions. Notably, after the third quarter selloff, there are several tech stocks to buy that could do well in 2024.
Although rising yields have hurt stock prices, taking the longer-term view is advisable. The primary inflation measure the Federal Reserve tracks, the Core PCE, is falling. In the August report, it rose only 0.1% month over month. Analysts expect this measure to decelerate further.
If inflation continues decelerating, the Fed might be at the end of its rate-hiking cycle. Typically, this would be positive for growth stocks. Given this outlook, it is logical to start averaging into the best tech stocks to buy that could do well.
These stock predictions are category leaders. Besides, they are AI beneficiaries and Goldman Sachs analysts expect them to have a higher earnings growth than the Standards an Practices (S&P) 500 in 2024. They are growing amid the uncertain macro and could roar in 2024.
Intuit (INTU)
Intuit (NASDAQ:INTU) is the go-to tax and accounting platform for small and medium-sized businesses. Its software allows organizations to simplify their accounting and tax processes. Businesses achieve more productivity in the financial department using the company’s technology.
Looking at results, the latest quarter was another highlight of Intuit’s solid execution. It reported revenues of $2.7 billion, a 12% year-over-year increase. For the full year fiscal 2023, revenues grew 13% and GAAP EPS increased 16%. Furthermore, management expects 11% to 12% revenue growth for FY2024.
Revenues from the QuickBooks Online accounting segment surged 22% YOY, driven by higher prices and customer growth. The Online Services segment was also impressive as payroll, Mailchimp and payments helped the segment to 20% growth for the quarter.
In terms of future growth, the company is leveraging artificial intelligence to transform its tax and accounting system. In other words, they are developing a platform to support automatic financial processes. “Five years ago we declared our strategy to be an AI-driven expert platform, with data and AI core to fueling innovation across our five Big Bets,” said CEO Sasan Goodarzi.
The company has an incredible depth of data from its 100 million customers. In addition, it has more than 60,000 tax and financial attributes on aspects like expenses, income, cash flow, tax information, credit history, spending history and outstanding loans. By applying AI to its rich data sets, Intuit hopes to become a financial assistant in the pocket for its customers.
ServiceNow (NOW)
As they stated in their 2023 analyst day, ServiceNow (NYSE:NOW) hopes to be the intelligent platform for end-to-end digital transformation. Throughout the past decade, the company has become an indispensable enterprise productivity tool. According to Gartner, ServiceNow is the leader in IT service management and enterprise low-code application platforms.
As companies look for cost savings and consolidate their technology vendors, the company will be a huge winner. The Now Platform bundles workflow automation, process mining, customer experience, robotic process automation, low code tools, search and analytics, among other capabilities and could benefit from vendor consolidation.
Considering the generative AI opportunities, the future for ServiceNow is exciting. That’s why it is among the favorite stock predictions for 2024. With Now Assist, it is helping organizations achieve enormous productivity. For instance, it provides no-code app creation capabilities that enable regular users to develop applications.
The firm is also targeting the automation of finance and supply chain processes. Traditionally, these processes have been very manual. ServiceNow aims to help enterprises deliver cost and productivity gains by transforming sourcing, procurement and accounts payable operations.
In terms of results, the company continues to land more deals. In the second quarter of fiscal year 2023, it added 70 deals above $1 million in annual contract value. It also closed the quarter with 45 customers with more than $20 million in ACV.
The company is also releasing several AI innovations in the market. It launched Generative AI Controller, Now Assist for Search and Now Assist for Virtual Agent. All these services will drive productivity gains for customers. Also, its partnership with Nvidia to develop powerful generative AI capabilities for enterprises is an opportunity for growth.
Lam Research (LRCX)
Semiconductors have been a cyclical industry in the past. However, according to PIMCO, they could become more secular due to their increasing ubiquity. Semiconductors have become prevalent in numerous applications such as industrial automation, autos, cloud computing, consumer devices, 5G infrastructure and artificial intelligence. Given these trends, this global leader in wafer fabrication equipment and services is one of the top stock predictions for 2024.
With 14 global locations, Lam Research (NASDAQ:LRCX) is a key equipment supplier for the semiconductor industry. Throughout the past year, the sector has had a cyclical downturn due to weaker demand and a semi supply glut. However, analysts think the downturn has bottomed and 2024 could be a recovery year.
Buying LRCX stock here could lead to solid gains if the industry recovers in 2024. Besides, the company has another catalyst. The advances in artificial intelligence are creating opportunities for the company. Advanced AI servers contain higher leading-edge logic, storage and memory content.
This means more demand for wafer front-end equipment (WFE). Analysts estimate that an incremental 1% penetration of AI servers in data centers will add $1 to $1.5 billion of additional WFE demand. Furthermore, the semiconductor equipment giant has strengthened its position in packaging. The company revealed more than 50 market shares in deposition and etch solutions in the latest quarterly report.
The AI tailwind bodes well for the stock. Recently, Wolfe Research initiated coverage with a “buy” rating. Their price target of $825 presents more than 30% upside as of this writing. Other analysts are also bullish, setting the LRCX stock for solid performance throughout the next year.
On the date of publication, Charles Munyi did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
