HomeMost PopularThe Top 5 Stocks to Ride the S&P 500's Soaring Wave

The Top 5 Stocks to Ride the S&P 500’s Soaring Wave

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Surging S&P 500 Sets New Highs Amid Economic Optimism

Wall Street’s exhilarating rally continues as major indexes ascend to all-time peaks in recent months. The S&P 500, in particular, is basking in a dreamlike ascent, smashing numerous record highs over the last month. On March 20, the index soared to new heights by closing above the 5,200 level for the first time and finishing at 5,224.62 on Wednesday, marking a 9.5% year-to-date advance.

The Federal Reserve’s Impact on Stocks

The recent surge followed the Federal Reserve’s decision to maintain unchanged interest rates and signal an anticipated trio of rate cuts before 2024’s closure. Excessive interest rates had plagued consumers in recent times. Following a halt to interest rate hikes in July 2023, the Fed retained rates within the 5.25-5.5% range in the wake of a 525-basis-point hike.

Current Economic Landscape and Tech Sector Dominance

This remarkable upsurge stems from subdued inflation and euphoria around the conclusion of the Federal Reserve’s tightening spree, alongside projected forthcoming rate reductions. The robust U.S. economy, expanding at 2.5% in 2023 as opposed to 1.9% in 2022, further fuels this rally. Notably, the tech sector, driven by pervasive enthusiasm for artificial intelligence (AI), especially generative AI, has been the primary impetus behind the S&P 500’s surge. AI-focused equities witnessed a surge the previous year, a trend that persists with numerous firms endeavoring to seize the AI wave.

Our Handpicked Top 5 Stocks

Considering this backdrop, investing in S&P 500 stalwarts like NVIDIA Corporation (NVDA), Meta Platforms, Inc. (META), Amazon.com, Inc. (AMZN), eBay Inc. (EBAY), and American Water Works Company, Inc. (AWK) emerges as a prudent move for potential investors in 2024. With Zacks Rank #1 (Strong Buy) or 2 (Buy), these stocks promise enticing returns.

NVIDIA Takes the Lead

Global leader NVIDIA pioneers visual computing technologies and the GPU, transitioning from PC graphics to AI-driven solutions for high-performance computing, gaming, and virtual reality platforms. Boasting an anticipated earnings growth rate of 82.3% this year, NVIDIA holds a Zacks Rank #2.

Meta Platforms: The Social Media Giant

Largest social media platform Meta Platforms expanded its portfolio from Facebook to encompass Instagram, WhatsApp, and Messenger. With nearly 3.96 billion monthly users, Meta boasts a Zacks Rank #1 and anticipates a 34.1% earnings growth rate this year.

Amazon.com’s E-commerce Dominance

Amazon.com, an e-commerce behemoth, leverages the Prime program and a robust distribution network for its online retail dominance. A 40.7% expected earnings growth rate underscores AMZN’s prowess, with a Zacks Rank #1 to boot.

eBay: Global E-commerce Player

The online shopping platform eBay thrives due to its brand-centric shopping formats, expanding from a mere auction site to a global commerce giant. A Zacks Rank #2 accompanies an anticipated 8% earnings growth rate for eBay this year.

American Water Works: Providing Essential Services

Essential water service provider, American Water Works, serves over 14 million customers across 24 states and continues to grow via acquisitions. With a Zacks Rank #2 and a projected 6.1% earnings growth rate in 2024, AWK offers steady returns.

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