The future of the U.S. economy looks promising, having concluded 2023 with unexpectedly robust growth, defying recession concerns. Consumer spending, business investment, government outlays, exports, and improved housing conditions contributed to the economy’s resilience.
As the nation enters a presidential election year, the strong economic performance is anticipated to continue. Experts are foreseeing continued positive economic momentum in the coming year and a potential soft landing that addresses inflation concerns without significant job losses.
Knowing that the economy is headed in a good direction invest in these three communication stocks to deliver high returns to your portfolio.
T-Mobile US Inc. (TMUS)
T-Mobile US Inc. (NASDAQ:TMUS) is an American telecommunications titan, serving the nation with its wireless network services and mobile devices, empowering over 100 million satisfied customers. As the third-largest mobile network operator in the country, T-Mobile has a significant market presence, reflected in its $191.0 billion market cap and a year-over-year net income growth of 36%.
The U.S. telecom market is valued at $443.12 billion as of 2024 and is projected to continue growing at a CAGR of 3.67% during the forecast period of 2024-2029. T-Mobile’s financials back up the company’s secure position. Total service revenues increased 3% year-over-year to $16 billion in Q4 2023 and 3% year-over-year to $63.2 billion in 2023, along with a 10% increase in Core Adjusted EBITDA YoY to $29.1 billion in 2023. With adjusted free cash flow almost doubling YoY, an industry-leading 1.6 million postpaid net customer additions, and increasingly widening profit margins, TMUS holds large growth potential both in terms of profitability and increasing customer base.
Recent boosts in TMUS’s performance have been propelled largely by the introduction and adoption of 5G and related technologies. Boasting the largest nationwide 5G network covering 98% of Americans, T-Mobile stands as a clear leader in the 5G revolution. We expect trends to continue in terms of T-Mobile’s expansion and expect to see jumps in revenue and stock performance, marking it as a Strong Buy as far as telecom stocks go.
Comcast Corporation (CMCSA)
Comcast Corporation (NASDAQ:CMCSA) is an American-stationed national broadcast service and network. As the parent corporation for blockbuster technological companies such as Xfinity, NBC, Universal Studios, and more, Comcast holds resilient market dominance which dictated its $45.27 valuation and a YoY growth of 12.89%.
Comcast’s 2023 financial standings implicate success in the future. In Q3 2023, CMCSA acquired $30.12 billion in revenue, marking marginal YoY increases of 0.89%. However, growth prospects and large margin YoY growth are apparent in both net income and diluted EPS, accounting for YoY increases of 187.99% and 193.33% respectively. With profit margins widening, CMCSA holds growing potential for improvements in nationwide coverage. Further, the preliminary Q4 earnings call notes that CMCSA beat both forecasts for EPS and revenue.
Largely, recent jumps in performance by Comcast’s subgroup of Peacock Streaming propelled its recent valuation. In Q4 2023, Peacock increased its subscriber count by 3 million accounts, amounting to a total user base increase of over 10%. With the success of Peacock this past quarter, Comcast has begun to stifle the income losses associated with the streaming website. As Comcast expands coverage of Peacock and incorporates new media and catalogs, expect revenue to continue to climb in conjunction with CMCSA valuation.
Meta Platforms Inc. (META)
Meta Platforms Inc. (NASDAQ:META) is a multinational conglomerate that owns and operates Facebook, WhatsApp, Instagram, etc. Currently trading at $393.18, the stock is up 177.87% YoY. Fifty-four analysts are bullish on the stock with a median 12-month price target of $398.50.
In Q3 2023, Meta reported revenue of $34.15 billion, up 23% YoY. Net income rose 164% to $11.58 billion, largely due to its fast digital ads business growth. With Meta estimated to have held 20.8% of all U.S. digital ad sales in 2023, the ads market is the core of its business. The global market for digital advertising was valued at $628.8 billion in 2022 and is expected to reach $1.2 trillion by 2027. Exhibiting a CAGR of 14.7% during the forecast period, this provides ample room for Meta to grow. Looking forward, management expects future success with revenue forecasted to be between $36.5-$40 billion in Q4 2023.
Finally, Meta hopes to boost its growth by investing in AI. Recently, Zuckerberg announced the company’s plans to purchase billions of dollars worth of Nvidia chips, including 350,000 H100 graphics cards, to create a massive computing infrastructure. The company plans to use this infrastructure to pursue research related to artificial general intelligence (AGI), a futuristic form of AI also being researched by OpenAI and Google’s Deep Mind Unit. Zuckerberg described this move as a “long-term vision” to give Meta a strategic edge.
On the date of publication, Michael Que did not have (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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article
