Understanding companies’ fundamentals is vital for evaluating top stocks to buy. It helps one to make sharp investment decisions based on financial health, growth potential and competitive advantages. The below stocks remain undervalued and are industry leaders set for growth post-earnings season, making them ideal candidates to capitalize on the next major bull run.
The first company excels in communication services, with strategic investments driving future growth. Meanwhile, the second company, in semiconductors, boasts strong margins and diversified revenue sources. Similarly, the third company’s subscriber growth and improved profitability position it well in the entertainment sector.
Moreover, the fourth company, benefiting from advanced technology, leads in semiconductor equipment. Further, the fifth company innovates with new products and operational excellence in food delivery. Additionally, the sixth company’s growth in payment volume and cross-border transactions strengthens its market position. Finally, the seventh company in healthcare shows robust growth in immunology and neuroscience, supported by innovative therapies.
Each company’s fundamentals reveal unique strengths, making them top stocks for high gains. In short, the fundamental aspects make them top stocks to buy for progressive portfolios.
Meta Platforms (META)
Social media stock Meta Platforms (NASDAQ:META) invests heavily in infrastructure and technology. Q1 2024 capital expenditures were $6.7 billion, driven by servers and data centers. These investments support Meta’s expanding user base and AI initiatives. Meta’s strategic focus on AI and the metaverse involves long-term investments.
Further, historical data shows high returns from past investments in new products. Reality Labs, Meta’s next-generation computing unit, is central to its growth. Reality Labs’ Q1 revenue was $440 million. This is up 30% year-over-year (YoY), driven by Quest alternate reality headset sales. This growth indicates increasing consumer interest in virtual and augmented reality technologies.
Moreover, Meta integrates AI with hardware, such as Ray-Ban Meta glasses. These glasses let users interact with AI in real-time. Overall, investments in AI and the metaverse position Meta for future growth, making Meta stock a high candidate on the top stocks to buy list.
Taiwan Semiconductor Manufacturing (TSM)
Taiwan Semiconductor Manufacturing (NYSE:TSM) leads in semiconductors within information technology. TSMC’s operating margin increased by 0.5 points to 42.5% in Q2 2024. This improvement is due to operating leverage. In Q2, expenses stand at 10.5% of revenue, with operating margin prospects to reach between 42.5% and 44.5% in Q3. Effective expense management is crucial for maintaining margins. TSMC reduces expenses as a percentage of revenue while increasing overall revenue. This focus supports profitability and market value growth.
Further, smartphone revenue, slightly down by 1%, still accounts for 33% of the total. Internet of Things (IoT) and automotive segments grew, with IoT up 6% and automotive up 5%. Indeed, strong high-performance computing (HPC) growth and smartphone performance highlight TSMC’s segment demand. Diversified revenue reduces dependency, supporting sustainable growth. AI and HPC expansion benefit TSMC’s top-line.
Finally, its expense management and diverse revenue ensure stability and profitability, making it one of the top stocks to buy.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) operates in movies and entertainment. Q2 revenue grew 17%, surpassing last year’s performance. Average paid memberships increased by 16% YoY, reflecting a significant subscriber base expansion. Operating margin for Q2 was 27%, up from 22% last year. This five-point improvement highlights boosted profitability. Looking forward, Netflix’s 2024 revenue growth may hit 14% to 15%. There is an upward revision in 2024 projections from 13% to 15%.
Additionally, Netflix may attain a 26% operating margin for 2024, up from 25% in 2023. Q2 2024 EPS was $4.88, up 48% from $3.29 in Q2 2023. This increase points to boosted market value. Operating income for Q2 2024 was $2.6 billion, a 42% increase from Q2 2023. The operating margin was 27.2%, five percentage points higher than last year. This indicates significant operational efficiency gains. Global subscriber growth and market presence drive revenue increases.
To sum up, this strengthens Netflix’s market position, which gives Netflix a high mark on the top stocks to buy list.
ASML (ASML)
ASML (NASDAQ:ASML) is a key player in semiconductor equipment. The company focuses on photolithography systems. ASML reported total net sales of 6.2 billion euro for Q2 2024. This slightly exceeded guidance and highlights the company’s ability to generate high revenue. Net system sales were 4.8 billion euros. 1.5 billion euros came from extreme ultraviolet (EUV) systems. 3.3 billion euros came from non-EUV systems.
Moreover, installed base management sales were 1.48 billion euros, indicating a solid service and maintenance revenue stream. Similarly, logic sales accounted for 54% of net system sales, reflecting a strong demand for advanced logic chips. Hence, these chips are essential for high-performance computing and AI applications. Further, memory sales made up 46% of net system sales. The transition to advanced memory technologies drove this. ASML’s gross margin for Q2 2024 was 51.5%, surpassing guidance.
In short, immersion lithography is vital for advanced semiconductor manufacturing. Finally, ASML’s advanced technology positions it at the forefront of advancement. This drives high growth, making it a strong contender on the top stocks to buy list.
Domino’s Pizza (DPZ)
Domino’s Pizza (NYSE:DPZ) leads the consumer discretionary sector. It specializes in pizza delivery and carryout. Advancement in product offerings drives customer attraction and retention. The New York Style pizza (launched in Q2 2024) signifies a new segment of pizza lovers. This product has a high sales mix within Domino’s offerings. Additionally, Domino’s introduces new products to cater to varied customer preferences, driving sales and loyalty. Innovative products like the New York Style pizza boost sales volumes and support the rewards program. Domino’s focus on operational excellence is evident in delivery times and service quality.
Moreover, with product training sprints, the MORE Delicious Operations program improved delivery times by nearly 10% in Q2 2024 versus Q2 2022. Operational efficiency improvements enhance customer satisfaction and loyalty. Better delivery times and higher order volumes show operational excellence, which drives Domino’s ability to handle more orders while maintaining high service standards.
In summary, continuous product advancement and operational excellence enhance customer satisfaction and sales, positioning Domino’s on the top stocks to buy list.
Visa (V)
Visa (NYSE:V) operates in the financial sector and provides transaction and payment processing services. Visa’s payments volume grew by 7% YoY in constant dollars (Q3 2024). Domestic and international transactions drove this growth. Moreover, U.S. payments volume grew by 5% YoY, reflecting stable performance in its largest market. This steady growth in the U.S. represents a significant portion of Visa’s volume. Internationally, Visa experienced a 10% increase in payment volume, indicating successful expansion into global markets. Cross-border volume, excluding intra-Europe transactions, rose by 14% YoY. Hence, this growth indicates Visa’s expanding footprint in international transactions.
Additionally, the strong growth in cross-border volume highlights Visa’s competitive advantage. Increasing globalization drives demand for cross-border payment solutions. Processed transactions grew by 10% YoY. This metric reflects Visa’s capability to handle more transactions efficiently. The 10% growth demonstrates Visa’s scalability and operational efficiency. Hence, the solid growth in payments volume (domestically and internationally) marks its lead market position.
Overall, Visa’s strong cross-border transaction capabilities solidify its presence among top stocks to buy.
AbbVie (ABBV)
AbbVie (NYSE:ABBV) is a major player in healthcare, focusing on biotechnology. The immunology segment is a critical growth driver. Skyrizi and Rinvoq generated over $4.1 billion last quarter (Q2 2024). Skyrizi achieved a 38% prescription share in the U.S. psoriasis market. In dermatology, it captured a 15% market share, indicating a solid competitive edge. Rinvoq reached a 10% US prescription share. It grew impressively in atopic dermatitis and Crohn’s disease. Combined, they hold over 40% of the U.S. market. The approval of Skyrizi for ulcerative colitis adds growth potential. Additionally, late-stage development for Rinvoq in five indications promises top-line growth.
Further, the neuroscience segment also boosts AbbVie’s growth. Vraylar, Ubrelvy and Qulipta generated nearly $1.2 billion in sales. These therapies show strong market performance and double-digit growth. Botox Therapeutic reported $814 million in sales with a 9.6% growth rate. Indeed, it remains a leading therapy for chronic migraine. This underscores its market strength. AbbVie’s strong performance in immunology and neuroscience, driven by Skyrizi and Rinvoq, positions it for continued growth.
To conclude, Visa’s strategic growth in new indications makes AbbVie a compelling mark on the top stocks to buy list.
As of this writing, Yiannis Zourmpanos held long positions in META, TSM, NFLX, ASML and V. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
