Amidst the turmoil of the 2022 stock market crash, the Nasdaq’s resurgence in 2023 has ignited hope for a promising 2024. As the S&P 500 nears its all-time high, historical data suggests the onset of a new bull market on the horizon. Since 1957, bull markets have historically lasted nearly five years, delivering average gains of 169%. Furthermore, following a market recovery, the Nasdaq Composite has, on average, generated annual gains of 19% since its inception in 1972.
While economic trends are famously fickle, the historical evidence leans towards a positive year for investors.
Alphabet’s Ascendance
The digital advertising decline and cloud spending plateau in 2022 hit Alphabet hard. However, the improving economy is heralding a strong rebound. With its position as a global search leader, the largest online advertiser, and a formidable cloud infrastructure provider, Google is poised for a resurgence.
The launch of Gemini, an advanced generative AI system, and an array of prebuilt AI models via Google Cloud, provides multiple catalysts for Alphabet’s growth in 2024. At a mere 4 times forward sales, the stock’s current valuation reflects historical cheapness.
Amazon’s Awe-inspiring Outlook
The challenges caused by soaring inflation weighed on Amazon in 2022, but green shoots of growth are emerging. Recovering digital retail and AI-boosted cloud spending are revitalizing its core businesses. Amazon’s integration of AI across its operations, with a keen focus on Amazon Web Services (AWS), positions the company for substantial future growth.
With the dual tailwinds of an improving economy and AI advancements, Amazon’s stock, currently trading at just 2 times forward sales, presents a compelling opportunity.
MercadoLibre’s Momentum
As the leading provider of e-commerce and digital payments services in Latin America, MercadoLibre outshines despite being relatively unknown. With a rapid surge in revenue and operating income, the company’s future looks promising. The region’s fast adoption of e-commerce coupled with a population twice the size of the U.S., paints a compelling growth story for MercadoLibre.
Boasting margin expansion and robust cash flow, MercadoLibre’s potential is not to be underestimated.
Microsoft’s Magnificence
Microsoft grappled with challenges similar to its tech counterparts but initiated an AI gold rush with a substantial investment in ChatGPT creator OpenAI. The consequent integration of generative AI tools across its suite of products and services, and the AI cloud offerings, is driving substantial demand. The company’s Azure cloud revenue growth surpassed rivals, with a significant portion attributed to AI demand.
Currently trading at 32 times forward earnings, Microsoft’s stock offers compelling prospects at a reasonable valuation.
Nvidia’s Noteworthy Trajectory
Nvidia’s processors have been the gold standard for gaming, data center, and AI use cases, strategically capitalizing on the generative AI boom. With an expected shortage of AI chips persisting through 2024, Nvidia’s enhanced production and relentless R&D are creating ever-improving solutions. Having delivered triple-digit year-over-year revenue and profit growth, Nvidia’s future looks bright.
Trading at a price/earnings-to-growth ratio (PEG ratio) of less than 1, Nvidia’s stock stands out as an undervalued gem.
Palantir Technologies’ Fortitude
With decades of experience under its belt, Palantir Technologies was well-prepared for the viral AI wave. The company’s diverse range of clientele and strong ties with government agencies provide a sturdy foundation for growth. Palantir’s robust services cater to the surging demand for AI-driven solutions, rendering the stock an intriguing prospect in 2024.
4 Companies with Exponential Growth Potential in 2024
Persistent Innovation in Artificial Intelligence: Palantir
Palantir, the juggernaut in AI technology, has strategically diversified by integrating generative AI models with its already formidable AI-powered data analytics. The resulting Artificial Intelligence Platform (AIP) has catalyzed a surge of interest, with management attesting to the unprecedented demand that hasn’t been observed in the past two decades.
Roku: Seizing the Streaming Market
Despite turbulent times, Roku remains the paramount streaming platform globally, commanding 51% of the market. The resurgence of advertising expenditure and a user base of 76 million active accounts have created an irresistible opportunity for advertisers, stimulating rapid ad growth on its platform.
Shopify: Resilience and Reinvention
Shopify, a frontrunner in providing e-commerce software tools, has weathered the storm and emerged stronger. The revival of e-commerce spending has played to its strengths, supplemented by the release of new generative AI tools and a strategic minority stake in Global-e Online to facilitate international market expansion. By streamlining operations and shedding non-core businesses, Shopify catapulted its growth and profitability, establishing itself as an enticing prospect for investors.
Tesla: A Paradigm of Resilience
Despite being a perennial battleground stock, Tesla continues to defy its naysayers. The Model Y’s ascension to the title of the world’s best-selling car, even amidst headwinds and price adjustments, marks a significant milestone for electric vehicles. Favorable macroeconomic conditions with cooling inflation and anticipated lower interest rates might pave the way for Tesla to achieve its long-term production target of 50% annual growth and expand its profit margins. At five times forward sales, the valuation seems reasonable, especially considering the stock’s astonishing gains of over 2,300% in the past decade.
The Trade Desk: An Unwavering Force in Digital Advertising
The Trade Desk upended expectations by gaining market share during a period of subdued marketing spending, outperforming industry titans such as Alphabet and Meta Platforms. The company’s innovative Koa AI copilot is poised to sustain this trajectory, empowering advertisers to optimize their ad campaigns. Adding to its allure, the Trade Desk boasts a price/earnings-to-growth (PEG) ratio of less than 1, signifying an undervalued stock in the eyes of investors.