The Nasdaq 100 has more than doubled over the past five years. It’s filled with the top 100 non-financial Nasdaq stocks based on market cap. This benchmark contains some of the best Nasdaq stocks, based on its ability to consistently outperform the Nasdaq Composite in bullish markets.
Looking at the stocks within a top-performing benchmark can help you generate higher returns. By definition, a benchmark continues stocks that have outperformed its year-to-date returns. You can find the first two stocks on this list within the Nasdaq 100, and unsurprisingly, they are tech companies.
However, the third company on this list is much smaller. It has a market cap below $1 billion, but the fintech company has crushed the stock market year-to-date. The company has enticing growth opportunities and a reasonable valuation. This small company and the two tech giants demonstrate the level of range that you will find in the Nasdaq. Ready for the list? These are some of the best Nasdaq stocks to consider.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) has been outpacing the stock market for several years. Facebook, Instagram, and WhatsApp have become the social networks of choice for many consumers. The vast demand for Meta Platforms’ social networks plus the attention they retain has led to serious gains for investors.
The tech giant has outperformed the Nasdaq year-to-date and over the past five years. Recent earnings results suggest that the trend will continue. Meta Platforms delivered 22% YOY revenue growth in the second quarter while net income jumped by 73% YOY. The company closed out the quarter with 3.27 billion daily active users which is a 7% YOY increase.
Meta Platforms excited investors at the end of last year by initiating a dividend program. The company distributed $1.27 billion to investors as dividend payouts and repurchased $6.32 billion worth of shares. Meta Platforms has the financial strength and growth rates to suggest that the dividend can maintain a double-digit growth rate for several years.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is one of the top AI beneficiaries that has been expanding its market share. The company generated a record $3.1 billion from its AI products and services in the second quarter of fiscal 2024. The company also reported 43% YOY revenue growth across its entire business. The VMware acquisition was a major contributor, but the company still generated 12% YOY revenue growth excluding VMware. More enterprise customers have adopted the VMware software stock to build private clouds.
The stock has outperformed the stock market year-to-date and over the past five years. It also offers a generous dividend yield of roughly 1.50%. Shares are in the middle of a correction right now, so there’s a chance that the yield gets higher. Broadcom has a good reputation of dividend hikes that includes a double-digit growth rate for several years.
Wall Street analysts are bullish on the stock. Broadcom is rated as a Strong Buy with a projected 37% upside from current levels.
Sezzle (SEZL)
Sezzle (NASDAQ:SEZL) is the small company on this list. The fintech firm has a market cap below $500 million and a P/E ratio of 33. Sezzle operates in the “Buy Now Pay Later” industry which allows consumers to buy products and services through small monthly installment payments. Total subscribers more than tripled YOY to reach 371,000 in the first quarter. The company also reported a 45.9% YOY increase in the number of transactions.
Those metrics contributed to Sezzle’s successful quarter where revenue increased by 35.5% YOY. Net income surged by 364.3% YOY to reach $8.01 million. Sezzle wrapped up the quarter with a net profit margin just above 17%. Soaring profits and encouraging guidance suggest that the stock is reasonably valued. The hidden fintech gem has more than tripled year-to-date. The gains are even more substantial if you go back to October 2023. From that point, shares have soared by more than 800%.
Notably, Sezzle closed out the first quarter with $82.2 million of cash on hand. That means almost 20% of Sezzle’s market cap is based on its cash position. The stock looks reasonably priced heading into the rest of the year.
On this date of publication, Marc Guberti held long positions in AVGO and SEZL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing 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.
