Tech stocks are taking the world by storm, and the market is eagerly awaiting the quarterly results to see if they are worth the hype. As one of the most important industries for the economy, the tech space is thriving with the adoption of Artificial Intelligence, and I believe this year will be all about tech stocks. Love them or hate them, you cannot do without the products and services they offer. Several tech companies are investing heavily in AI and gearing up for a solid year as the macroeconomic conditions improve.
With that in mind, let’s take a look at the three tech stocks that are set to outperform in 2024.
Nvidia (NVDA)
One of the hottest tech stocks of 2023 is Nvidia (NASDAQ:NVDA), and it hasn’t run its course yet. Nvidia remains highly relevant and could continue soaring this year. The company’s exceptional products and innovation have made it one of the best stocks to own.
After rallying over 200% in the past year, there is no stopping its upward momentum. It has beaten analyst expectations in the past, and I believe it will do so in the current quarter too. There is high potential for the company to dominate the AI space this year.
Trading at $613, the stock isn’t cheap, but it might continue getting expensive if you wait for too long. The stock has seen a steady upside since the beginning of the year, and if it reports a solid quarter, it will continue to soar. The National Science Foundation has recently announced that it will team up with Nvidia to launch the National Artificial Intelligence Research Resource (NAIRR) pilot program.
The AI chip demand is robust, and Nvidia caters to some of the biggest companies in the industry. I do not expect this demand to slow down anytime soon. The company already saw a 200% year-over-year revenue growth in the third quarter and is raising the bar. It already has several orders worth billions and this could be an even better year for the tech giant. Nvidia was once known for the best Graphic Processing Units and is known for AI domination today. The company deserves the attention it is getting.
While we anticipate rate cuts in the near term, NVDA stock is a solid buy before that. Once the rate cut is announced, we could see the stock skyrocket.
Microsoft (MSFT)
It is not possible to talk about tech stocks without mentioning Microsoft (NASDAQ:MSFT). A tech giant, Microsoft has become an integral part of our lives and offers an impressive range of products and services. It is not a company that sits back and watches the trends evolve. Instead, it jumps right in and makes timely moves to ensure steady growth.
The company invested heavily in AI with a $13 billion investment in OpenAI. The company has integrated generative AI into its products and expects to start earning returns from it starting this year.
In the first quarter, it showed a 13% year-over-year revenue growth and a 19% revenue growth in the cloud segment. It reported a revenue of $56 billion and an EPS of $2.99. With a gross profit margin of 70% of sales, Microsoft is one of the best businesses out there. It has beaten revenue expectations in the past four quarters, and I am confident it will continue with the same. If the Fed announces rate cuts, MSFT stock to soar to new all-time highs.
The company touched a market cap of $3 trillion and it is one stock that will never disappoint. It has soared over 200% in the past five years and is trading at $402 right now. This is one stock that should be a part of your retirement portfolio. It also generates passive income through dividends and enjoys a yield of 0.75%.
The company has enough liquidity to keep investing in AI while also rewarding the shareholders. I am very confident that Microsoft will continue to be a leader in the industry, and no matter how the AI trends change this year, Microsoft will remain relevant.
Advanced Micro Devices (AMD)
Nvidia’s biggest competitor, Advanced Micro Devices (NASDAQ:AMD) is slowly gaining ground. The company has started the year on a high note and I believe it is ready to compete with the biggest names in the industry. AMD recently launched the MI300X AI GPU, and it has also launched a new chip which has attracted the attention of several big names including Microsoft.
Companies that do not want to wait for weeks to get their hands on Nvidia chips will be willing to use AMD’s chips. Additionally, we could see the Personal Computer market finally pick up. There was a slowdown last year due to several reasons, but it is expected that we will see an improvement in numbers this year.
Once the market recovers, AMD could benefit the most. AMD stock is already up 28% year to date, and with the new launches, it could have a rally like Nvidia’s. The stock is trading at $178 today and is ready to hit new highs. It reports earnings on Jan 30 and this could give a boost to the stock. In the third quarter, the company reported a revenue of $5.8 billion and an EPS of $0.70.
NewStreet Research analyst recently upgraded the stock with a buy rating and a price target of $215 while Barclays analyst Tom O’Malley raised the stock’s price target to $200. Do not wait for any dip in the stock, and grab it before it becomes too hot to touch.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.