Investors seeking stocks for outsized returns need to look for companies with exceptional growth potential and the ability to disrupt their industries. While the success of any investment is never guaranteed, careful analysis can reveal hidden gems with the potential to outperform.
From emerging industries to more established sectors, the stocks on our radar exhibit qualities that indicate the potential for significant gains. Whether it’s harnessing the power of AI or advancing infrastructure, these companies represent both promise and progress. As investors position their portfolios for success in 2024, these top promising stocks serve as compelling opportunities to capitalize on the evolving global economy.
Now, here are the most promising stocks poised to deliver outsized returns in 2024 and beyond!
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) is a global chipmaker primarily operating in the wireless technology segment, playing a central role in the rapidly expanding 5G market. The company is now emerging as an artificial intelligence (AI) player, as they expand their Snapdragon Elite platform to revolutionize the PC market.
Qualcomm has not gotten much love in comparison to many of its other semiconductor counterparts. This is largely due to their poor financial results in the 2023 fiscal year, which saw revenue and net earnings decline 19% and 44%, respectively. Their business was still overcoming supply chain constraints from 2022 as well as a slowdown in the handset market. These factors were only temporary though, as the handset segment saw 16% year-over-year (YOY) growth in their latest Q1 FY24 results. However, what investors are the most excited about this year is their Snapdragon Elite AI CPU. This new platform provides unparalleled performance, capable of running generative AI models with over 13 billion parameters, and twice as fast as the competition. With revenue and earnings per share (EPS) coming in at the higher end of guidance, Qualcomm remains one of the top stocks for outsized returns in 2024.
Comfort Systems USA (FIX)
Comfort Systems USA (NYSE:FIX) is a leading provider of heating, ventilation and air conditioning (HVAC) services. While the company is not in the technology sector, its underlying fundamentals make the stock ripe to deliver substantial returns in 2024.
Comfort Systems has a proven track record of growth through both organic expansion and strategic acquisitions. Their increasing focus on sustainability and energy efficiency is fueling demand for ungraded HVAC systems for the commercial, industrial and institutional sectors. The business continues to expand rapidly, showcased by the company’s accelerated revenue growth and profitability.
In FY23, Comfort Systems revenue increased 26% YOY to $5.2 billion. Net income rose 31% to $323.4 million or $9.01 per share, with free cash flow more than doubling to $550 million. Their backlog is up 27% from the year prior, an increase of roughly $1.1 billion. This makes Comfort Systems one of the best stocks for outsized returns to buy now.
Sterling Infrastructure (STRL)
Sterling Infrastructure (NYSE:STRL) specializes in infrastructure solutions, including road and construction, site development and e-infrastructure projects. With the United States poised for a significant infrastructure boom, Sterling Infrastructure is poised to benefit.
Recent legislation indicates substantial funding dedicated to improving the nation’s aging infrastructure. The Bipartisan Infrastructure Law, under the Infrastructure Investment and Jobs Act, includes $550 billion to deliver clean water, high-speed internet and roads, bridges and airports. This is Sterling Infrastructure’s bread and butter, and the company plans to capitalize on the increasing demands. This includes expanding broadband access and data centers, where the company has specialized solutions.
In the 2023 fiscal year, Sterling delivered record results with adjusted net income growing 43% YOY. Moreover, gross margins expanded by 350 basis points to 18.9%. With a growing backlog and strong guidance for FY24, the future remains promising for this under-the-radar infrastructure company.
On the date of publication, Terel Miles 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.
