Powering Up Portfolios: The Rise of Nvidia and Netflix in March Powering Up Portfolios: The Rise of Nvidia and Netflix in March

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With the S&P 500 index up roughly 6% year to date, stocks have gotten off to a strong start in 2024. Investors are being rewarded for putting their money behind top growth stocks, and it looks like the trend could continue in the remainder of this year and beyond.

With that in mind, read on to see why two Motley Fool contributors believe that you should be loading up on Nvidia (NASDAQ: NVDA) and Netflix (NASDAQ: NFLX) this March.

Nvidiaโ€™s remarkable trajectory is far from over

Keith Noonan (Nvidia): One of the marketโ€™s hottest stocks is Nvidia, and the artificial intelligence (AI) leaderโ€™s share price has surged 60% across roughly two months of trading in 2024. Over the last year, the stock is up 240%.

Despite concerns of entering a valuation bubble with such rapid growth, Nvidiaโ€™s recent performance is backed by strong fundamentals. In the fourth quarter, it recorded extraordinary adjusted earnings per share (EPS) of $5.16 on sales of $22.1 billion. The astounding demand for advanced GPUs in AI applications saw its data center segment sales rise by 409% year over year, contributing 83% to overall revenue.

Nvidiaโ€™s exponential growth, particularly in its data center segment with a 265% increase in sales year over year and a 486% jump in adjusted EPS, sets the stage for continued success. The companyโ€™s conservative guidance of around $24 billion in sales for the first quarter shows promising trends in demand. The burgeoning realm of AI, where Nvidia plays a pivotal role, is still unfolding, with vast potential for further advancements.

With a strategic focus on AI software and computing services, Nvidia is not only positioned for revenue growth but also high-margin recurring earnings. For investors eyeing the AI evolution, Nvidia stands out as a compelling long-term investment.

Netflix: A Dominant Force in Content Creation

Parkev Tatevosian (Netflix): Over the years, Netflix has undeniably proven its mettle. Surmounting challenges from rival content creators and showcasing a unique ability to engage millions of subscribers with premium original content, Netflix has not only sustained profitability but augmented it.

The pandemic-induced lockdowns catalyzed the streaming service industryโ€™s growth, with Netflix emerging as the undisputed leader in terms of subscriber base. Even as competitors withheld licensed content, Netflix excelled by producing blockbuster hits like Stranger Things and Squid Game.

Netflixโ€™s proficiency in content creation bodes well for sustained success over the long haul. Demonstrating impressive financial growth, the companyโ€™s operating income surged from $2.6 billion in 2019 to $6.9 billion in 2023.

Currently trading at a forward price-to-earnings ratio of 27, below previous levels despite its dominance, Netflix represents an attractive investment opportunity before the market fully grasps its streaming dominance.

For these reasons, investors can confidently consider investing in both Nvidia and Netflix this March, harnessing the potential growth of these industry powerhouses.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now, excluding Nvidia. These selected stocks are projected to provide significant returns in the foreseeable future.

The Stock Advisor guides investors on portfolio construction, offers regular analystsโ€™ updates, and unveils two new stock picks monthly. Since 2002, the Stock Advisor service has consistently outperformed the S&P 500 by a wide margin.*

Discover the top 10 stocks

*Stock Advisor returns as of February 26, 2024

Keith Noonan has no position in any of the stocks mentioned. Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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