Rising above adversity, the U.S. economy has soared above expectations. Growing at a 3.1% annualized clip in Q4 2023, any signs of a recession or market slowdown are hard to find. Consumers are still spending, and if the Federal Reserve does indeed cut interest rates this year as the market expects, we could be due for another rather strong year in terms of growth.
This outlook has led several top growth stocks to outperform thus far in 2024. Now, I have to admit, I didn’t really see this rally coming last year. Too many coincident indicators suggested economic weakness would prevail at some point.
That said, investors have been quick to buy into several key trends, including AI adoption and cloud computing tailwinds. Here are three stocks I think benefit most from these trends and could remain hot tickets for the rest of the year.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) has been on an incredible ride over the past two years. Last year’s impressive rally, in which META stock more than quadrupled from its October 2022 lows, has been remarkable. This rally has continued into 2024, thanks in large part to the company’s focus on efficiency.
The company is set to report Q4 results after market close on Feb.1. Analysts expect the company to haul in $4.90 in earnings per share, a dramatic improvement from the $1.76 reported in the same quarter the year prior. Net income also is expected to grow impressively, surging from $4.65 billion in 2022 to $12.89 billion last year.
Notably, Meta Platforms eyes Q4 revenue at $38.9 billion, a 21% boost from the previous year. Advertising income should surge to $37.92 billion. And user engagement across platforms like Facebook, Instagram, Messenger, and WhatsApp is measured using Monthly Active People (MAP). Indeed, if the company can hit these key metrics, this is a stock that could soar. Currently, META stock is rallying into this report.
I think upcoming earnings reports will be key to watch for Meta moving forward. This is a company that’s now being traded on the basis of its fundamentals, and if it exceeds the high bar analysts have placed on the company, it certainly is a company with the potential to continue moving higher.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is a dominant player not only in the world of e-commerce but also in terms of cloud computing. The company’s Amazon Web Services (AWS) subsidiary continues to churn out stellar profitability and is likely to continue to do so in coming quarters. Amazon currently holds roughly one-third of the cloud infrastructure services market share. This is a primary driver of Amazon’s revenue growth, which has nearly doubled over the past five years.
Despite recent layoffs, Amazon appears poised to continue seeing growth in its core markets. The company also made some intriguing moves globally to maintain its position. Notably, AWS has vowed $15 billion in spending for cloud infrastructure in Japan, highlighting Amazon’s global cloud ambitions. Investors holding AMZN stock are effectively international players in the dynamic cloud market.
On Jan. 29, Amazon and iRobot (NASDAQ:IRBT) mutually terminated their acquisition agreement, which they initially agreed to in August 2022. This deal cancellation isn’t necessarily that notable, considering Amazon’s size and scale in so many unique businesses. However, it will allow the company to streamline its focus even more and continue reinvesting in its highly profitable businesses over time.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) sits on its trillion-dollar market cap throne as a leading technology and AI pure-play stock. This producer of high-performance chips and graphics cards continues to blow away expectations. Remarkably, Nvidia tripled its Q3 fiscal 2024 on a year-over-year basis, touting AI advancements like RTX Video HDR, and elevated gaming and streaming quality. Additionally, a key partnership with Amazon should allow Nvidia to improve its product listings using AI.
A global chipmaker, Nvidia is perched atop the leaderboard in the AI and quantum computing race. A platform that doesn’t get enough attention is Nvidia’s cuQuantum platform, which facilitates the development of quantum applications on Nvidia GPUs.
I think Nvidia remains an intriguing buy on any significant dips moving forward. This company, like many of its high-growth tech peers, has seen major declines in the past. And if we do hit a period of economic bumpiness, such a decline could certainly materialize. Buying NVDA stock on major declines rewarded long-term investors in the past. I don’t think the next time will be any different. After all, computing demand will only increase over time, and this company continues to dominate the key areas of the tech market that matter right now.
On the date of publication, Chris MacDonald 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.
