Stocks have been on the rise this year, with the Nasdaq Composite index up 8% since the start of 2024. The growth is a trend that has continued from last year when excitement over tech stocks caused the same index to soar more than 43%.
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Advances in budding sectors like artificial intelligence (AI) have rallied investors as increased demand for such services has boosted the entire tech market. AI growth will likely continue fueling stocks across the industry in 2024, with dozens of companies and related markets benefiting from its tailwinds.
As the old saying goes, “The best time to plant a tree was 20 years ago, and the next best time is now.” And the same goes for investing.
Here are three stocks that can help you get richer in 2024.
1. Advanced Micro Devices
As a leading chipmaker, Advanced Micro Devices (NASDAQ: AMD) has an exciting outlook this year and well into the future. The company supplies its hardware to companies across tech, with its chips powering a wide range of devices from cloud platforms to video game consoles, AI models, custom-built PCs, laptops, and more.
AMD’s success in the industry has seen its revenue soar by 240% over the last five years, with its free cash flow up by 306%.
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Meanwhile, the company is investing heavily in AI. Last December, AMD unveiled its MI300X AI graphics processing unit (GPU). The chip was designed to compete directly with Nvidia’s offerings and has already caught the attention of some of tech’s most prominent players, signing on Microsoft and Meta Platforms as clients.
AMD’s earnings have yet to reflect its investment in AI. However, its recent quarterly results suggest it’s moving in the right direction. In its fourth quarter of 2023, AMD’s revenue rose 10% year over year to $6 billion, beating analysts’ expectations by about $60 million. The company’s AI-focused data center segment posted 38% revenue growth.
This chart shows AMD’s earnings could hit just over $5 per share by 2025. Multiplying that figure by the company’s forward price-to-earnings (P/E) ratio of 47 yields a share price of $257, projecting stock growth of 51% by next year.
As a result, AMD is a screaming buy in 2024 as it expands its business and benefits from AI growth.
2. Intel
Chip demand across tech is skyrocketing, suggesting you can’t have too many chip stocks in your portfolio, and Intel (NASDAQ: INTC) is another attractive option.
The company has hit more than a few roadblocks in recent years. Its stock is down about 41% over the past three years after decreased market share in central processing units (CPUs) and ending a more than decade-long partnership with Apple
However, the fall from grace has seemingly lit a fire under Intel again, and it has been making moves to come back strong in the coming years. Last June, Intel announced a “fundamental shift” to its business, adopting an internal foundry model that it believes will help it save $10 billion by 2025.
Moreover, Intel is moving into AI. In December 2023, the company debuted a range of AI chips, including Gaudi3, a GPU designed to challenge similar offerings from market leader Nvidia. Intel also showed off new Core Ultra processors and Xeon server chips, which include neural processing units for running AI programs more efficiently.
Intel’s earnings are projected to reach just over $2 per share over the next year. When you multiply that figure by the company’s forward P/E of 28, you get a share price of $65.
Considering its current position, these projections would see Intel’s stock soar 67% by fiscal 2025, making it a must-buy right now.
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3. Amazon
Amazon‘s (NASDAQ: AMZN) stock has climbed 81% over the last year, making plenty of people richer along the way.
The company’s business has soared over the last decade as it has become a leader in e-commerce and the cloud market, with its annual revenue and operating income up 546% and 20,000% since 2014.
However, all eyes have been on Amazon’s AI efforts this year. As the operator of the world’s biggest cloud service, Amazon Web Services (AWS), the company has the potential to leverage its massive cloud data centers and steer the generative AI market. In 2023, AWS responded to increased demand for AI services by introducing a variety of new tools, which could lead to a major boost to earnings in the coming years.
According to the table above, Amazon’s earnings could achieve $5 per share over the next two fiscal years. In a similar calculation to AMD and Intel, multiplying that figure by Amazon’s forward P/E of 44 yields a stock price of $237, which would see its stock rise 28% by fiscal 2025.
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This projected growth might not be as significant as AMD and Intel, but it would still exceed the S&P 500‘s 26% rise over the last year. As a result, Amazon is worth considering right now and is a stock that could make you richer in 2024.
