As growth stocks surge with remarkable gains this year, the tech-centric S&P 500 index keeps reaching new pinnacles, with investors nonchalantly brushing off inflation concerns. Foreseeably, with looming interest rate cuts, the rally in growth stocks is poised to persist.
However, not all growth stocks merit investment. An air of caution hangs over the market, signaling the need to focus on stocks offering enduring value amid worries of an AI bubble. In such times, it’s prudent to heed the insights of Wall Street analysts who tend to favor growth stocks, especially those boasting a robust track record of consistent top and bottom-line growth. Without further ado, here are seven growth stocks championed by analysts that you may consider for long-term investment.
META – Building Momentum
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Meta Platforms (NASDAQ:META) endured a lackluster 2022 but executed a strategic pivot in 2023 with the “Year of Efficiency” initiative, doubling down on artificial intelligence (AI). Witnessing an upturn, Meta registered gains in operational efficiency, astute monetization of its user base, and intensified investments in AI prowess. The outcome – consecutively surpassing estimates, pushing its free cash flow per share to $17 last year from $7 in 2022. Noteworthy, META stock soared 144% in 2023 and a promising 62% in the last half-year alone.
Embracing AI as its bedrock for future accomplishments, Meta is embedding the technology pervasively in its operations and product innovation ventures. Unfolding a grand strategy, Mark Zuckerberg, Meta’s CEO, unveiled plans to lavish billions on acquiring microchips from Nvidia (NASDAQ:NVDA) and unveiled a potent new AI model to power its video recommendation system across its suite of apps.
Mastercard – A Beacon of Quality
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If you crave quality, Mastercard (NYSE:MA) offers it in spades. The credit card titan boasts an A-rated profit profile, exhibiting double-digit growth in nearly every significant metric. For instance, it maintains a 5-year average net income margin of 44.33% and free cash flow margin of 42.70%. Over the years, it has handsomely rewarded its investors by hiking dividends for 12 consecutive quarters and yielding 0.55%. Early this year, it raised its dividend by 16%.
One struggles to find fault with Mastercard’s recent financial standing, as it continually dazzles across the board. In its fourth-quarter results, recorded revenue surged by an impressive 12.60% year over year to $6.55 billion, complemented by an amazing EPS of $3.18, surpassing estimates by 10 cents. Regularly, Mastercard outstrips analyst forecasts by substantial margins across both lines.
Nvidia – Powering the Future
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Nvidia stands tall as perhaps the quintessential company, pivotal in propelling the AI revolution. Its formidable GPUs and processors have been the backbone of virtually every seminal tech advancement of the past decade, firmly cementing its dominance in the tech domain. From riding the crypto wave to fueling the AI boom, Nvidia remains a focal point in the tech arena.
The past decade standings. From the crypto surge to the AI explosion, it remains a business that continues turning heads in the tech sphere.
An Insight into Dominant Players in the Financial Ecosystem
The impressive strides of NVIDIA Corporation (NASDAQ: NVDA) have astounded analysts in recent times. Crushing market expectations by a staggering $2 billion on average in the previous three quarters, the company has witnessed a meteoric 398% surge in operational cash flows in the past year alone. Such a consistent upward trajectory in financial performance is indeed a rare spectacle in the volatile landscape of the financial market.
Embracing the AI Revolution
NVIDIA’s Q4 earnings showcase a remarkable 265% year-over-year growth in sales, soaring to $22.1 billion. Particularly noteworthy is the exceptional performance of its data center segment, registering a phenomenal 409% YOY increase, with revenue reaching $18.40 billion. Encapsulated in these stellar results lies a narrative of resilience, adaptability, and unwavering commitment to innovation.
Microsoft’s Strategic Maneuvers
Microsoft (NASDAQ: MSFT) stands tall as a beacon of innovation and strategic foresight in the ever-evolving tech landscape. The company’s strategic investment in OpenAI has positioned it as a frontrunner in the realm of artificial intelligence. With revenue soaring by 17.70% to $62.02 billion in the last quarter, Microsoft showcased an impeccable track record of surpassing revenue and earnings estimates by significant margins.
A Symphony of Growth: Spotify Technology
Spotify Technology (NYSE: SPOT) orchestrates a harmonious blend of user engagement and consistent growth in the fiercely competitive streaming industry. Boasting a 5-year average revenue growth of 21.90%, Spotify witnessed a meteoric rise in its monthly active users, surging by a remarkable 23% year-over-year to 602 million. The company’s robust sales growth of 16% YOY in Q4, fueled by increased ad-supported and premium revenues, illustrates a narrative of resilience and adaptability in a dynamic market environment.
The Retail Juggernaut: Walmart
Walmart (NYSE: WMT) emerges as a stalwart in the retail sector, with a rich legacy spanning over six decades. As the largest retailer globally, Walmart’s enduring presence and strategic acumen have solidified its position as a cornerstone in the financial ecosystem. The company’s ability to navigate market dynamics and evolving consumer trends with finesse underscores its resilience and adaptability in an ever-changing landscape.
Companies Thriving Amid Economic Uncertainty
Walmart (WMT) – The Resilient Retail Giant
Weathering the storms of economic fluctuations, Walmart (WMT) stands tall, unshaken by inflation concerns. With an impressive track record of rewarding its loyal shareholders, Walmart has solidified its reputation as a Dividend King through consistent dividend increases over the past five decades.
In a recent revelation that sent shockwaves through the financial world, Walmart reported robust figures in its Q4 financial report. Surpassing market expectations, the retail behemoth recorded a noteworthy 5.70% rise year-over-year (YOY) in sales, amounting to a staggering $173.4 billion. The company’s earnings per share (EPS) of 60 cents also surpassed estimates by a substantial margin of five cents.
The standout performer in Walmart’s diverse portfolio was its eCommerce segment, which witnessed an impressive 23% YOY growth in Q4. Surpassing the monumental milestone of $100 billion in annualized sales, the eCommerce arm continues to be a driving force behind Walmart’s thriving top-line growth. Furthermore, the acquisition of Vizio Holdings (NYSE: VZIO) has positioned the advertising sales segment for exponential growth, evident in the remarkable 28% increase YOY.
Eli Lilly (LLY) – Pharmaceutical Powerhouse
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Eli Lilly (LLY) emerges as a dominant force in the pharmaceutical landscape, boasting the most valuable pharmaceutical business globally with a market capitalization exceeding $700 billion. Specializing in a wide array of medical solutions from diabetes to depression and anti-obesity treatments, Eli Lilly’s stellar performance has catapulted its stock to a remarkable 30% increase year-to-date (YTD) and an astounding 129% surge the previous year, driven primarily by its revolutionary anti-obesity medications.
An in-depth analysis of Eli Lilly’s Q4 results unveils the significant impact of its anti-obesity drugs on its financial success. The company reported an extraordinary 28% YOY increase in sales, reaching $9.35 billion, with the anti-obesity segment contributing a substantial $2.2 billion, constituting a quarter of total sales. Notably, the debut of its latest weight-loss injection, Zepbound, generated $175.8 million in its inaugural quarter, with promising prospects for continued growth. Furthermore, the company’s Q4 GAAP EPS of $2.42 marked a noteworthy 13% rise YOY, underlining its unwavering commitment to innovation and excellence in the pharmaceutical sphere.
On the date of publication, the noted investor, Muslim Farooque, maintained a neutral stance on the securities discussed. The views expressed herein represent the personal opinions of the author, in adherence to the InvestorPlace.com Publishing Guidelines.
