7 strong buying stocks that should continue to rise

Many stocks have entered corrections after strong rallies to start 2024. Some of these stocks present long-term opportunities for patient investors, while others will continue to decline. Seeing what analysts are saying about publicly traded corporations can provide some clues about the future direction of those stocks.

Analysts regularly adjust their price targets after earnings and in light of news developments. These individuals and their firms regularly remain at the top of individual stocks, sectors and the economy at large. Analysts have more time and experience investing in stocks than the average investor, which makes it good to consider what they say.

Of course, you should perform some of your own due diligence, rather than relying solely on an analyst’s knowledge. However, these seven growth stocks appear to have several catalysts that can generate future gains. Capitalizing on these “Strong Buy” stocks during dips can lead to attractive long-term returns. Discover investment opportunities that could grow in the future.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) has outperformed the stock market for several years. The company’s stock is up 9% year-to-date and has nearly tripled over the past five years. A recent stock correction pushed the yield to 0.74%, while resulting in a P/E ratio of 34.5x.

The tech giant is a top beneficiary of the software AI boom. Copilot allows Microsoft to tap into more verticals and expand its presence. For example, Copilot for Security has expanded the company’s market share in the cybersecurity industry. Microsoft’s Q4 FY24 revenue and net income growth rates slowed a bit, but still reached healthy levels. Revenue grew 15% year-over-year to $53.7 billion, while net income rose 10% year-over-year.

Microsoft Cloud continues to be a critical component of the company’s long-term plans. Cloud revenue grew 21% year over year to a record $36.8 billion. The conglomerate also reported impressive growth rates in other business segments such as Productivity and Business Processes.

Meta (META)

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Meta (NASDAQ:THE TARGET) makes almost all of its revenue from online advertising. The company is diversifying into other revenue streams such as augmented reality and AI. While those opportunities may eventually develop in significant ways, the company’s core business model continues to excel.

Facebook’s parent company reported a 22% year-over-year increase in revenue and a 73% increase in annual net income in the second quarter. The company has 3.27 billion daily active users on its social networks, which is a 7% increase from last year. As more people move to the Meta family of apps, advertisers have more opportunities to showcase their businesses. That also means more revenue for the Meta.

The number of employees remained stable, only decreasing by 1% compared to last year. It’s a notable achievement given the company’s ability to continue generating 73% annual revenue growth. Meta became more efficient and managed to give quarterly dividends to its investors. The tech giant also invests billions of dollars in share buybacks each quarter, further boosting the stock price.

American Express (AXP)

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American Express (NYSE:AXP) offers a good mix of value and growth. The stock trades at a P/E ratio of 18x and yields 1.18%. Shares are up 26% year to date and have gained 89% over the past five years. The fintech firm is benefiting from increased revenue and profit margins as younger consumers create new cards with the company.

Revenue rose 9% year-over-year in the second quarter, while net income rose 39% year-over-year. Revenue has been in the high single digits or low double digits for several quarters, and net income has often exceeded it. American Express ended the quarter with a net profit margin of 20%. Guidance suggests profit margins will continue to widen.

Consumers will use their credit and debit cards in any economy. These cards are more convenient and safer than paper cash, and many of them also have attractive rewards programs. American Express is a major credit and debit card issuer that offers a reasonable valuation and promising growth prospects.

Broadcom (AVGO)

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The AI ​​chipmaker will benefit from a potential partnership with OpenAI, which may boost its sales. However, Broadcom (NASDAQ:AVGO) is not relying on OpenAI to succeed in the booming AI industry. The company generated a record $3.1 billion from its AI products in Q2 FY24, in an effort that led to 43% year-over-year revenue growth across the company. The VMware acquisition was a boon for Broadcom’s infrastructure software solutions.

The action had a consistent performance before artificial intelligence became mainstream. The stock is up 37% year-to-date and has more than doubled over the past five years. Broadcom also offers a yield of 1.42% and has maintained a double-digit annual dividend growth rate for several years.

A recent 10-for-1 stock split brought more attention to Broadcom, but the stock is now in a correction. This opportunity looks promising for long-term investors as Broadcom approaches a $1 trillion valuation.

Chipotle (CMG)

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Broadcom isn’t the only corporation to initiate a stock split. In fact, it looks like stock splits are making a comeback, with Chipotle (NYSE:CMG) leading the way. The fast-food restaurant chain announced a 50-for-1 stock split earlier in the year. The split brought more attention to the stock, but the stock is currently in the middle of a correction.

Many fast food restaurants and convenience food companies have faced pushback due to higher prices. However, Chipotle defied industry headwinds by reporting an 18.2% year-over-year revenue increase in the second quarter. Even better, the Mexican Grill chain reported annual net income growth of 33%, resulting in a net profit margin of 15.3%.

Chipotle has been no stranger to price gouging, but it is a healthier alternative to many fast food restaurants. The company’s reputation for providing quality food compared to its competitors gave it more pricing power. That should please investors, on top of the stock’s 240% gain over the past five years.

Walmart (WMT)

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Walmart (NYSE:WMT) has an extensive presence that includes more than 10,500 stores and clubs in 19 countries. The company has nearly half of its stores located in the U.S. and employs 2.1 million people. Walmart stock has outperformed the stock market with a 28% year-to-date gain. Additionally, the stock is up 90% over the past five years and yields 1.22%. The stock trades at a P/E ratio of 29x.

The company’s Q1 FY25 results suggest gains should continue. Consolidated revenue increased 6.0% year-over-year to $61.5 billion. Meanwhile, net income tripled from last year to $5.1 billion, resulting in a net profit margin of 3.16%.

E-commerce sales growth was a major highlight, delivering 21% year-over-year sales growth. Walmart’s advertising segment also performed well, generating 24% more revenue than the same quarter last year. Advertising is only a small percentage of Walmart’s total revenue, but this segment can improve the company’s profit margins.

Nvidia (NVDA)

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Nvidia (NASDAQ:NVDA) has been the AI ​​leader for several years and is on every investor’s radar in 2023. It’s hard to ignore a stock that has more than doubled year-to-date, posting a 2,621% gain over the past five years. However, investors still believe Nvidia can continue to rally. It was briefly the world’s most valuable company and may reclaim that title in a few years.

The AI ​​chip maker’s revenue and net income continue to grow at levels that other mega-caps can’t compete with. Sales grew 262% year-over-year to $26 billion, while net income grew 628% year-over-year. Nvidia’s profit margins have accelerated dramatically over the past year and reached 57.1% in Q1 FY25.

Artificial intelligence is expected to maintain a compound annual growth rate of 36.6% between now and 2030. There is already speculation that Nvidia’s next earnings report will be a smash hit that acts as the next big AI catalyst. Investors are excited about Nvidia stock, and the corporation has won the enthusiasm of its analysts. Nvidia may rise to all-time highs if it reports good results for Q2 FY25.

As of this publication, Marc Guberti held long positions in MSFT, AVGO and NVDA. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publishing Guide.

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