Investors often gravitate towards large-cap stocks due to their stability and track record, characteristics highly sought after. In the current financial landscape, large-cap technology companies have been on the rise in 2024, outshining small-cap counterparts.
Amazon’s AWS Reacceleration Sparks Investor Optimism
Amazon has exhibited robust performance in 2024, with shares soaring nearly 30% compared to the S&P 500’s 16% increase. Positive quarterly results, particularly highlighting AWS reacceleration, have infused the market with optimism. Analysts are revising earnings forecasts upwards, citing a favorable outlook.
Amazon surpassed Zacks Consensus EPS and Sales estimates in its recent earnings report, showcasing impressive growth of 260% in earnings and 12% in sales. The company’s operating income of $15.3 billion, a substantial 220% surge from the previous year, further underlines its financial strength.
AWS’s strong performance, with $25 billion in net sales representing a 17% year-over-year increase, has restored confidence in the segment after a period of underperformance.
Meta Platforms Demonstrates Improved Operational Efficiencies
META shares have been standout performers in 2024, driven by enhanced operational efficiencies leading to significant profitability gains. The company’s latest quarterly earnings report revealed an 80% surge in EPS to $4.71, accompanied by a substantial 30% increase in sales year-over-year.
Noteworthy is META’s consistent positive performance in advertising revenue over six consecutive quarters. The most recent beat of 0.2% ($46.4 million) highlights the company’s strong position in the market, with advertising forming a significant portion of its revenue stream.
Arista Networks Rides the AI Wave to Revenue Growth
Arista Networks raised its revenue growth guidance for the current fiscal year (FY24) following its latest earnings release, propelling its stock to new heights. The company, specializing in cloud networking solutions for data centers, has capitalized on the AI trend, attracting investor attention.
ANET, designated as a Zacks Rank #1 (Strong Buy), showcases strong growth potential driven by robust business demand. The company reported remarkable sales growth, with Q1 sales reaching $1.5 billion, marking a 16% increase from the previous year.
Final Thoughts
Large-cap stocks have been the standout performers in 2024, enriching many investment portfolios. Conversely, small caps have faced challenges amidst a rising interest rate environment, prompting calls for a rate cut to ignite their growth.
For investors looking to capitalize on the large-cap wave, companies like Arista Networks (ANET), Meta Platforms (META), and Amazon (AMZN) present compelling opportunities worth considering.