3 Undervalued Stocks Will Soar: August Edition

Investing wisely requires understanding a company’s fundamentals, ensuring a solid foundation for potential growth. In August, three stocks stand out in the consumer discretionary, technology and financial services sectors, each poised for significant gains.

On consumer discretion, a leading global fast-food chain has shown resilience through strategic pricing and strong brand loyalty, maintaining robust growth despite economic challenges. His effective strategies make him a prime candidate for future market rallies. In technology, a leading technology giant in artificial intelligence-based services is set to capitalize on the growing demand for advanced technology solutions. Continuous innovation and high customer adoption underscore its market adaptability and growth potential.

Finally, a key player thrives on robust consumer spending and cross-border transactions in financial services. Strategic realignments and technology integration enhance its competitive advantage, positioning it for substantial appreciation. These companies represent stability and growth, making them ideal undervalued stocks.

McDonald’s (MCD)

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McDonald’s (NYSE:MCD) is a global fast food giant known for its burgers, fries and golden arches. Recently, global comparable sales fell 1%, with sales falling across all segments (Q2 2024). Despite the declines, consolidated revenue rose about 1% in constant currencies, marking high brand loyalty and strong revenue management.

Indeed, the company’s digital footprint in the industry is unmatched and growing. McDonald’s has built one of the largest loyalty programs in the world. There are 166 million members and a membership of 250 million. Engaged loyal customer insights drive digital market share gains and improve McDonald’s personalization capability.

Moreover, strategic menu price increases offset the decline in guest numbers. In the US, restaurant execution and digital growth positively impacted results. These strategies show the adaptability of McDonald’s. The company reported consolidated revenue of nearly $6.5 billion for the quarter. Systemwide sales to loyalty members were over $26 billion for the last 12 months. Quarterly sales to loyalty members were approximately $7 billion, underscoring the importance of the loyalty program.

Overall, strategic pricing and loyalty programs help support revenue and position McDonald’s as one of the most undervalued stocks.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) is a leading technology company specializing in software, cloud services and AI. Azure AI services saw solid growth in customer adoption, with customers exceeding 60,000 (+60% YoY). Average spend per customer continues to rise, reflecting Azure’s market value.

Moreover, Azure OpenAI The service is widely used to access models such as GPT-4. Leading companies in various sectors improve their operational efficiency with its help. Microsoft AI offerings extend to Models as a Service, which provides API access to third-party models. The number of paying customers for this service doubled quarter-on-quarter, indicating high demand for Microsoft’s AI solutions.

In addition, high-profile companies like Adobe (NASDAQ:ADBE) and Palantir (NYSE:PLTR) to use these AI services. This indicates the broad market applicability and clarity of Microsoft’s AI and cloud technology. Microsoft Intelligent Data Platform user base grew 50% year-over-year (YoY). Microsoft Fabric, a next-generation data platform powered by artificial intelligence, has more than 14,000 paying customers, reflecting 20% ​​quarter-on-quarter growth. Microsoft Azure AI services have seen substantial growth. Many leading companies are adopting innovative models to increase their operational advantage.

Overall, Microsoft’s continued technological advancements and market adaptability make it a strong contender among top undervalued stocks.

Mastercard (MA)

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MasterCard (NYSE:ME) focuses on global payments and technology. Healthy consumer spending drives Mastercard’s success. Cross-border volume growth is vital, with the company growing 17% over last year. This growth comes from increased travel and non-travel spending, indicating Mastercard’s ability to capitalize on global changes in consumer behavior. Mastercard has made organizational changes to enhance long-term growth. These changes include the realignment of regional operations and payment services.

In addition, the company optimizes resources and invests in high-growth markets. This strategic move aims to provide positive operational leverage. Mastercard is focusing on growth markets with high levels of cash and expanding acceptance in new verticals. The company focuses on value-added services such as data analytics, fraud prevention and cyber security.

In addition, these services contribute significantly to growth. Integrating AI into products improves competitive advantage and efficiency. Value-added services revenue grew 19% year-over-year. Tokenized transactions exceeded $22 billion in early 2024, up 49% from last year. In addition, Click to Pay transactions doubled from last year, reflecting the growing adoption of secure payment solutions. Mastercard benefits from high consumer spending and cross-border growth. The resurgence in travel is driving these deals, and strategic realignments are supporting further growth.

In conclusion, technology integration and value-added services enhance Mastercard’s competitive advantage and position it among the undervalued stocks in August.

At the time of writing, Yiannis Zourmpanos held a long position in PLTR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

At the time of publication, the responsible editor had (either directly or indirectly) no position in the securities mentioned in this article.