4 Stocks to Boost Your Portfolio as Nasdaq Continues to Rally
The Dow, the S&P 500 and the Nasdaq have all hit record highs in the past couple of weeks, and their northbound journey continues. The ongoing rally is once again being led by tech stocks, which saw the tech-heavy Nasdaq hitting a fresh all-time closing high of 21,020.02, after rising 0.6%, or 127.33 points, on Wednesday.
Given the ongoing tech rally, it would be ideal to invest in Nasdaq stocks such as Amazon.com, Inc. AMZN, Meta Platforms, Inc. META, Visa Inc. V and Microsoft Corporation MSFT, whichhave strong potential for the near term. These stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and assure good returns. You can see the complete list of today's Zacks #1 Rank stocks here.
Nasdaq Northbound Journey Continues
The ongoing Nasdaq rally is being powered by solid earnings reports by a slew of big tech giants and the enthusiasm surrounding artificial intelligence (AI), especially generative AI. Over the past month, the Nasdaq Composite has gained 5.8%, while it has jumped 10.3% year to date, after surging 28.6% in 2024 to record its best year since 2020.
Tech stocks took a beating after Trump announced sweeping tariffs in April. However, Nasdaq has since made a solid comeback after Trump announced a temporary pause on tariffs, followed by negotiations with several trading partners of the United States. This has raised optimism that the impact of the tariffs won't be as severe as it was believed earlier.
Also, trade deals with China and Vietnam have brought relief to a large number of companies that have major production hubs in those countries.
AI Optimism Powering Nasdaq
Opinions among AI experts remain split on the long-term outlook of generative AI, but enthusiasm surrounding its prospects has been high in recent years. Many believe the technology is still in its nascent stages, with significant potential yet to be unlocked. One of the standout players in this space is NVIDIA Corporation NVDA, which has become a key driver of innovation and interest in generative AI. So far this year, NVIDIA's stock has risen by 29.4%.
NVIDIA's success has been pushing other big tech companies to invest more aggressively in generative AI as well. Simultaneously, the growing popularity of smart devices is increasing demand for advanced computing and machine learning technologies. These devices depend on features like facial recognition, video analysis and image processing — all of which require high-speed, energy-efficient processors with powerful graphics and sufficient memory. This growing need has fueled a strong rebound in the semiconductor industry over the last two years.
Also, despite a delay in rate cuts, market participants are hopeful that the Federal Reserve will go for at least two 25-basis-point rate cuts this year. Such a move would likely boost growth-focused assets, especially technology stocks, as they tend to benefit from lower rates.
3 Nasdaq Stocks With Upside
Amazon.com, Inc.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN's online retail business revolves around the Prime program, well-supported by the company's massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish a footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services.
Amazon.com has an expected earnings growth rate of 13.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. AMZN presently sports a Zacks Rank #1.
Meta Platforms
Meta Platforms, Inc. is the world's largest social media platform. META's portfolio offering evolved from a single Facebook app to multiple apps, like photo and video sharing app Instagram and WhatsApp messaging app, owing to acquisitions. Along with the in-house developed Messenger, these apps now form Meta's family of products used by almost 3.96 billion people on a monthly basis as of Sept. 30, 2023.
Meta Platforms has an expected earnings growth rate of 7.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 60 days. META presently has a Zacks Rank #2.
Visa Inc.
Visa Inc. operates as a payments technology company all over the world. The company went public in March 2008 via an initial public offering (IPO). V provides transaction processing services (primarily authorization, clearing and settlement) to financial institutions and merchant clients through VisaNet, its global processing platform.
Visa has an expected earnings growth rate of 13.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. V presently carries a Zacks Rank #2.
Microsoft Corporation
Microsoft Corporation is one of the largest broad-based technology providers in the world. MSFT dominates the PC software market, with more than 73% of the market share for desktop operating systems. Microsoft Corporation's Microsoft 365 application suite is one of the most popular productivity software globally. MSFT is also one of the prominent public cloud providers that can deliver a wide variety of infrastructure-as-a-service and platform-as-a-service solutions at scale.
Microsoft Corporation has an expected earnings growth rate of 13.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. MSFT presently carries a Zacks Rank #2.
#1 Semiconductor Stock to Buy (Not NVDA)
The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.
One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.
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