7 Stocks to Dominate in the Next Economic Upturn
If you’re wondering which stocks to buy for the next economic upturn, you’re in the right place. Finding profitable investment opportunities in the constantly changing global economy is crucial to profiting from the next economic boom. These seven exceptional stocks with solid growth potential and tactical advantages may lead in their respective industries.
The first one stands out as a strong competitor in the financial industry because of its steady revenue growth and sensible diversification tactics. Driven by strong demand for its cutting-edge GPUs, the second semiconductor company in the market has seen outstanding growth in its data center division.
Meanwhile, the third one is notable for its adaptability and effectiveness in AI applications, and a significant portion of its income comes from AI inference. With its strategic connection to new market trends like the business refresh cycle and AI PCs, the fourth one has a promising future. The sixth one leads on its successful marketing and positive financial outlook; the seventh has its strategic efforts and potential for future growth. Finally, the fifth one has solid financial standing and an emphasis on innovation.
Stocks to Buy for Next Economic Upturn: SoFi (SOFI)
In Q1 2024, adjusted net revenue for SoFi (NASDAQ:SOFI) increased by 26% year-over-year (YOY) to $581 million. It is the 12th straight quarter of a boost of more than 25%. Such stable growth highlights the business’s revenue-generating solid capacities and long-term growth sustainability.
Moreover, SoFi’s fundamental advantage is the diversity of its top-line. In Q1, the combined sectors of financial services and technology platforms held 42% of the adjusted net revenue, up from 33% and 40% in the prior quarters. As reflected in this trend, by 2024’s end, it may attain a nearly equal revenue distribution between these segments and loans, pointing to a strategy move in that direction.
Finally, in Q1, SoFi’s adjusted EBITDA was $144 million, a 91% YOY increase. This growth reflects significant operating leverage, as the EBITDA margin increased to 25% from 16% during Q1 2023. Therefore, the company’s operations are now more scalable and cost-effective.
AMD (AMD)
The Data Center division of AMD (NASDAQ:AMD) saw record sales of $2.3 billion, up 2% sequentially and 80% YOY. Instinct MI300X GPU sales acceleration and a double-digit percentage gain in server CPU sales propelled growth. AMD increased its revenue share from server CPUs, especially in cloud and business installations. Indeed, these numbers demonstrate AMD’s dominant position in the data center industry. This is the result of its creative products and calculated market penetration.
Further, the client segment expansion results from a $1.4 billion increase in sales, or 85% YOY. This is driven by the most recent generation of Ryzen desktop and mobile processors. These have seen double-digit growth in desktop Ryzen CPUs and nearly a doubling of sales of mobile Ryzen CPUs YOY. Overall, AMD’s Ryzen CPUs are in high demand, and the client segment has had remarkable growth, demonstrating the success of its product plans.
Stocks to Buy for Next Economic Upturn: NVIDIA (NVDA)
The Data Center business area for NVIDIA (NASDAQ:NVDA) continues to be the engine driving its growth trajectory. This segment’s record sales of $22.6 billion in Q1 2024 were a 427% YOY growth. The main force driving this increase is the broad deployment of the Nvidia Hopper GPU computing platform and AI inference by major cloud providers, businesses, and consumer internet firms.
Moreover, companies like Meta (NASDAQ:META) have invested heavily in Nvidia’s AI infrastructure. Developed on a cluster of 24K H100 GPUs, Meta’s Llama 3 delivers new AI-driven features that increase user engagement and open up new income sources for the company.
Additionally, Nvidia has a lot of room to develop in the automotive industry, especially with its AI infrastructure supporting autonomous driving technology. An excellent example is Nvidia’s partnership with Tesla (NASDAQ:TSLA). The company powers Tesla’s FSD Version 12 autonomous driving software with its AI infrastructure. In short, Tesla’s installation of 35K H100 GPUs highlights how important Nvidia’s technology is to advancing autonomous car capabilities.
Intel (INTC)
One of the main factors influencing Intel’s (NASDAQ:INTC) development potential is its leadership in technology and placement in rising industry trends. Strong future demand for AI PCs is reflected in the projected Enterprise refresh cycle and increased momentum for these devices. This trend is supported by Intel’s expertise in creating and managing the AI PC category and the growing availability of AI PC CPUs.
Moreover, an improvement in the data center industry indicates the return to more regular CPU purchasing patterns and the increasing availability of accelerators. This solidifies the impending release of Intel 18A products.
Further, Intel anticipates growth in both EPS and sales for 2024, with H2 2024 seeing an acceleration in revenue growth. Strategic measures and rising demand signals underpin this optimistic forecast. Intel’s commitment to providing value is reflected in the announcement of a quarterly dividend of 12.5 cents per share, boosting the Street’s confidence. Despite large expenditures in technology and capacity growth, Intel expects considerable capital offsets in H2 2024, resulting in about neutrally adjusted free cash flow for 2024.
Stocks to Buy for Next Economic Upturn: ACM Research (ACMR)
In Q1 2024, ACM Research (NASDAQ:ACMR) had $288 million in time deposits and cash. With that, the company has the flexibility to take advantage of growth leads, control operational risks, and deal with market adversities. Operating income increased to $39.8 million in Q1 2024 from $10.9 million in Q1 2023. There is an increase in operating income and a boost in operating margin from 14.7% to 26.2%. This demonstrates the company’s capacity to translate revenue growth into profitability sharply.
Further, research and development expenses went from $13.3 million to $19.4 million. This boost demonstrates ACM Research’s dedication to innovation and creating new goods to maintain its competitive advantage. The corporation must prioritize research and development to meet market demands and maintain long-term growth.
Overall, ACM Research’s edge reflects its ongoing development of cutting-edge packaging tools, its successful qualification of the Ultra C v Vacuum Cleaning Tool, and its advancements in developing the Track and Plasma Enhanced chemical vapor deposition platforms. As a result, these advances are anticipated to drive top-line growth and market expansion.
Hims & Hers (HIMS)
Hims & Hers (NYSE:HIMS) excels in marketing efficiency, taking a leading position in this crucial area. Compared to Q1 2023, marketing costs as a proportion of sales increased by nearly 4%, reaching 47% in Q1 2024. Better targeting and more successful marketing techniques are reflected in this development. This allows the business to sign up new members for less money. The company has a solid strategy for developing its brand. Hence, this has been effective and centered on connecting with customers at different culturally significant times and early in their health journeys.
Looking forward, Hims & Hers has given upbeat predictions for the balance of 2024. The business projects $292 million to $297 million in sales for Q2, with $30 million to $35 million in adjusted EBITDA. Similarly, the top-line may range from $1.2 billion to $1.23 billion in 2024, while adjusted EBITDA will fall between $120 million and $135 million.
In short, these estimates further support the company’s excellent financial standing and growth leads. As a result, this shows ongoing robust growth and enhanced profitability.
Block (SQ)
Block’s (NYSE:SQ) improvement in profitability may be attributed to strategic efficiency efforts and careful expenditure control. The corporation achieved leverage on corporate overhead expenditures and concluded the quarter with a staff below its cap of 12K employees. Block has kept up its growth momentum by taking these steps and improving its cost structure.
Additionally, Block intends to invest in high-yield fields like marketing and sales to propel further expansion. These efforts will increase market penetration overall, user acquisition, and brand visibility. In light of the solid Q1 results, Block has increased its gross profit and profitability outlook for 2024. The company has upbeat forecasts for the remainder of 2024.
At the bottom line, a gross profit of at least $8.78 billion, or a 17% YOY increase, is included in the revised guidance. A minimum of $1.3 billion adjusted operating income, or 15% of total profit, is required. Overall, the company’s mark in maintaining its growth trajectory and attaining increased profitability is reflected in these predictions.
As of this writing, Yiannis Zourmpanos held long positions in SOFI, AMD, NVDA, INTC and ACMR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
