3 Supercharged Stocks to Buy Before the Next S&P 500 All-Time High


  • The S&P 500 was pushed to record levels last year by a small group of stocks. This year the rally is more broad-based.
  • Fastly (FSLY): The edge computing specialist is gaining more customers and having them spend more over time.
  • Powell Industries (POWL): The energy industry equipment supplier is enjoying soaring sales and a doubling of backlog.
  • XPO (XPO): Rolling up and then calving up businesses by XPO stock is leading to a leaner, more profitable logistics company.
Stocks to Buy - 3 Supercharged Stocks to Buy Before the Next S&P 500 All-Time High

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The S&P 500 keeps hitting new record highs this year. It dipped the other day as new inflation data all but killed the hopes for a Federal Reserve interest rate cut in March. Yet consumer confidence is growing the economy won’t crash, which suggests the broad-based index will eventually shrug off the sour price news. This backdrop has led to this list of stocks to buy.

Last year the index gained 24% on the backs of a small group of stocks known as the Magnificent Seven. In 2024, many more companies are perpetuating the rally higher. That makes these three supercharged companies the stocks to buy today. Do it before the S&P 500 gains it senses once more and aims for its next all-time high.

Fastly (FSLY)

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Fastly (NASDAQ:FSLY) is one of the leading edge computing stocks. That’s a fancy term for moving cloud resources closer to where users create the content. By locating resources there, it improves and increases response times. Edge computing is a fast-moving market that is expected to grow from $16.5 billion in 2023 to $156 billion in 2030, a 38% compounded annual growth rate.

It is Fastly’s job to bump up speeds by reducing data latency and improving content delivery. It offers enhanced content delivery, improved image optimization, video and streaming, and a variety of application security services. As businesses continuously move more data to the cloud they’re turning to Fastly in greater numbers and spending more with it. This makes it one of those stocks to buy.

Dollar-based net expansion rate (DBNER), or how much more existing customers are spending, rose to 123% for the quarter. That means they spent 23% more than the same period last year. And spending by enterprise customers, or those spending over $25,000 per quarter, increased 5% sequentially. Enterprise customers account for over 90% of Fastly’s total revenue.

Since I first identified Fastly as a proven winner to buy last November FSLY stock jumped 39%. But the edge computing expert has much more room to grow. It’s a stock you will want to buy ahead of the S&P 500 resuming its run higher.

Powell Industries (POWL)

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Electrical equipment supplier Powell Industries (NASDAQ:POWL) is another unstoppable stock I highlighted earlier this month that’s been off to the races. Shares are up over 20% since. 

Powell makes electrical systems for petroleum, oil and gas producers, refineries, liquefied natural gas (LNG) facilities and utilities. The energy industry remains a hotbed of opportunity because of the need and demand for fossil fuels. Renewables can’t hope to meet the large scale requirements of today’s grid and people are returning to the reliability of oil and gas.

Although POWL stock dipped on the inflation news as fears of a harder-than-expected economic landing took hold, investors should have no worries. Revenue is on fire for the specialized equipment maker. Even though it is a seasonally slow period, sales shot 53% higher in the fiscal first quarter while recording $198 million in new orders. That was a 15% sequential gain for Powell.

Looking out longer term, Powell reported its backlog of orders nearly doubled to $1.3 billion. That suggests that even if the economy wilts the equipment supplier can safely skate through the downturn. It’s definitely one of those stocks to buy.


logistics stocks. supply chain stocks
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Less-than-truckload (LTL) leader XPO (NYSE:XPO) is a stock that has long been on my radar. Founded in 2012 by Bradley Jacobs, a man with a golden touch when it comes to starting new businesses, the logistics firm generated over 3,500% in total return since its IPO. In contrast, the S&P 500 is up less than 800%. Look for XPO to continue on its growth trajectory.

Jacobs is a serial entrepreneur who created numerous businesses from scratch and transformed them into billion-dollar outlets.. He subsequently made huge profits by selling them at a premium, including at Amerex Oil, Hamilton Resources, United Waste, and United Rentals (NYSE:URI).

XPO spun off its GXO Logistics (NYSE:GXO) business that manages outsourced supply chains and warehousing globally. It also shed its RXO (NYSE:RXO) truck brokerage firm. XPO’s plans to calve off its European operations in 2022 were put on hold due to weak capital markets. Expect it to be eventually cast off.

What’s left is a slimmed-down but solid transportation fleet for LTL shipping. XPO reduced damage claims to all-time lows, added new terminals and drivers, and enhanced available technology to improve efficiency. As a result, it is seeing more business, greater revenue, and higher adjusted profits.

Where rival Yellow filed for bankruptcy, and both UPS (NYSE:UPS) and FedEx (NYSE:FDX) reported tough headwinds, XPO is heading to the open road and driving higher. XPO stock is one you will want to climb behind the wheel with for long-term growth. All in all, it’s one of those stocks to buy.

On the date of publication, Rich Duprey 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.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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