United States equities are approaching an inflection point in 2024. This week, the U.S. Bureau of Labor Statistics is gearing up for another release of the consumer price index (CPI) report and the U.S. Federal Reserve is preparing to share its forecast for the Federal Funds rate. Persistent inflationary pressures as well as elevated interest rates have remained at the forefront of the minds of everyday Americans, from consumers to investors. A higher-than-expected CPI reading would surely jolt U.S. markets in a way that could dissipate the ongoing equities rally. Of course, a softer reading could prompt the Fed to pursue rate cuts and incite a market rally. As a result, investors are seeking the best stocks to watch now.
No matter what happens, there are still certain stocks out there that investors should watch out for. High growth sectors, such as cloud services and artificial intelligence technologies, are just some of the burgeoning markets that could keep certain stocks edging upward.
With that said, the three stocks below are must-have on any investor’s watchlist.
Oracle (ORCL)
Oracle (NYSE:ORCL) is legacy provider of discrete software products. Since the early 2010s, the software firm has made a strategic shift to cultivate cloud services that could compete with the likes of Amazon Web Services, Microsoft Azure, and Google Cloud. As of now, those investments pursued over a decade ago are beginning to bear fruit.
In Oracle’s fiscal year 2023 report, cloud composed 82% of the firm’s $49.9 billion revenue figure, and as I had predicted in early May, cloud infrastructure and AI will be Oracle’s key growth drivers on a going-forward basis. Oracle’s Q3’2024 earnings report validated this sentiment, and the software giant’s most recent quarterly results are even more promising.
In a statement, CEO Safra Catz noted Oracle had “signed the largest sales contracts” in the company’s history for cloud infrastructure. Demand for training AI large language model workloads drove immense growth in the company’s cloud infrastructure unit. Oracle expects the cloud infrastructure unit, which generated $2 billion in revenue for Q4, to grow by 50% in the company’s fiscal year 2025. Moreover, the firm’s remaining performance obligation metric, a value measure of future contracts, surged 44% to $98 billion.
With the cloud services market dominated by big tech firms, Oracle’s presence is welcomed. The software platform’s shares have climbed 29.1% on a YTD-basis.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is a stock to watch for any investor interested in how competition in the AI chip market will ultimately play out. Currently, chipmaker Nvidia (NASDAQ:NVDA) has enjoyed much of the praise and earnings from selling its high-in-demand H100 and H200 GPUs. AMD announced the Instinct MI300 GPU accelerators during the latter half of the second quarter of 2023 and began to ship these server GPUs in Q4 of the same year. The AI chip quickly become AMD’s best-selling product, reaching $1 billion in sales as of AMD’s latest quarterly report. AMD expects to generate $4 billion from the MI300x in 2024 alone.
At the Computex conference in Taipei, AMD unveiled a newer version of its Instinct AI processor series: the MI325X. This GPU will still lag behind the performance of Nvidia’s anticipated Blackwell chips, which unfortunately highlights the way in which AMD seems to be playing catch-up in the AI chip market.
Nonetheless, more AI chips from AMD will be better for consumers as well as enterprises and should keep investors engaged. With another formidable player in the burgeoning market, Nvidia is bound, at some point, to lose its monopolistic edge on these high-end GPUs.
Embraer (ERJ)
Embraer (NYSE:ERJ) is plane maker based out of Brazil. Emerging market stocks have always been hit-or-miss for equities investors. However, Brazilian companies that have listing in the United States have done very well over the past 12 months. Embraer is just one of them. The plane maker’s stock has surged 81.4% since mid-June of last year. The reasons are related to company-specific growth and opportunities brought upon by a list of controversies afflicting a key competitor.
Embraer’s latest commercial jet series, the E195-E2, received a lot of attention and airline orders last year. According to the Brazilian plane maker’s 2023 earnings report, Embraer had delivered 181 planes, a 13% year-over-year increase, and had $18.7 billion worth of backlog, at that point in time, the highest in 6 years. First quarter results highlighted a similar trend. Embraer delivered 25 aircraft in Q1 – 7 commercial planes and 18 executive jets and backlog increased sequentially by 13% to $21.1 billion.
Furthermore, mounting troubles at Boeing (NYSE:BA) over the past 6 months have created an opportunity for its competitors. While Embraer has denied the speculation that it would subvert the woe-begotten U.S. plane maker with a 737-MAX competitor, the possibility is definitely on the table, whether Embraer wants to admit it or not. Investors will have to watch carefully for what exactly Embraer decides to do.
On the date of publication, Tyrik Torres 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.
