Amid challenges like high interest rates and inflation, top-performing stocks have displayed resilience this year. As economic pressures are anticipated to ease, the Russell 2000 Index is poised for a revival, offering an opportunity to delve into promising stocks to watch.
Analysts have identified three top-rated stocks with the potential for significant gains in the approaching year. Here’s why I think now is the time to explore these options to enhance your investment portfolio as we approach 2024.
Meta Platforms (META)
Mark Zuckerberg’s Meta Platforms (NASDAQ:META) has invested $36 billion in developing the metaverse, relying on quantum computing’s emerging power. The metaverse’s ambitious goals, demanding vast data processing and complex calculations, align seamlessly with quantum computing’s capabilities, promising a technological revolution. However, it’s also burned a hole in the company’s pockets, driving investors away in 2022.
This year has been different, and Meta has changed its tune. Indeed, 2023 has become the “year of efficiency” for the company with cost-cutting efforts and reduced spending on certain key areas driving investor interest.
Additionally, Meta has made a strategic shift to artificial intelligence (AI), which has proved successful in its comeback. Notably, this move has impressed analysts and investors. The launch of Quest 3, generative AI chatbots, and new Ray-Ban smart glasses showcased the company’s continuing portfolio of innovation. Meta’s Q3 report revealed a 23% revenue surge, marking a significant rebound in online advertising and positioning the company for continued growth.
Shopify (SHOP)
Shopify (NYSE:SHOP), a major player in e-commerce, stands out in a competitive field dominated by Amazon (NASDAQ:AMZN) and others. Unlike virtual malls, Shopify empowers businesses to run and control their own online stores. As a result, the platform serves millions of merchants.
Shopify experienced a 72% year-to-date stock increase amid the tech sector rebound. Despite a challenging 2022, marked by losses, the Q3 fiscal 2023 results indicate positive trends in gross margins and free cash flow. In early November, Shopify posted Q3 2023 results, surpassing estimates with $1.71 billion in revenue and 24 cents per share earnings. Positive guidance for Q4 and the year contributed to a 22% stock surge, followed by an additional 19%.
Take-Two Interactive (TTWO)
Take-Two Interactive (NASDAQ:TTWO), known for franchises like Grand Theft Auto (GTA), has faced challenges after a 30% dip from its 2022 peak. Despite a $1.2 billion loss in 2022 due to the Zynga acquisition, analysts foresee a 10% potential stock increase.
However, there are some notable catalysts to consider. Importantly, the president of Rockstar Games, Sam Houser, announced the first trailer for GTA VI. This game is set to release in December, and could be among the highest-grossing games of all time (if GTA V is any indication). Official roleplay servers for GTA 6, transitioning to a metaverse setting, aim to replicate the success of GTA V, which earned $8 billion through in-game purchases and subscriptions. TTWO also owns profitable IP, including games such as Red Dead Redemption, NBA2K, and WWE2K.
Given the strong interest around TTWO stock and its GTA VI release, this is a stock that could certainly see momentum well into 2024.
On the date of publication, Chris MacDonald has a LONG position in META and AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
