3 stocks that can double again in the 4th quarter

There are 77 US-listed stocks with a market capitalization of more than $1 billion that have doubled in the first nine months of this year. Most won’t double again, but I want to highlight three of them that I think can continue to rally through the last three months of 2024.

Nvidia (NVDA 1.63%), Sweetgreen (SG -1.83%)and Sea Limited (SE -2.50%) it can double again in the fourth trimester. Let’s take a closer look at these high-flying names that may not be landing any time soon.

1. Nvidia: Up 145%

Launching this list with the country’s third most valuable company by market capitalization may seem reckless. It suggests that Nvidia will become the first company to surpass a market cap of $4 trillion, $5 trillion and possibly $6 trillion — within the next three months. However, none of the market giants are growing as fast as Nvidia. Revenue has more than doubled in each of the past five quarters, and that includes more than tripling in three of those reports.

Nvidia has come a long way since it was simply the market leader in graphics processing units. It has become the obvious game in artificial intelligence. It already distinguished itself with essential hardware for everything from virtual reality to self-driving. It’s the top dog in AI chips, and business is booming as companies scramble to gain a competitive edge by leading the way in AI.

Image source: Getty Images.

The top line won’t grow at a triple-digit clip forever. Nvidia’s own guidance calls for a 79% increase in revenue in the current quarter, which it is expected to report at the end of November. Wall Street pros then see the top line slowing as much as 42% next fiscal year.

Nvidia isn’t cheap either. It trades at 43 times this fiscal year’s estimated earnings and 30 times next year’s target. However, with Nvidia routinely beating expectations and analysts scrambling to raise their forecasts, the stock is likely cheaper than the forward-looking models suggest.

Looking at just the fiscal third quarter that will be announced next month, we see that analysts’ earnings estimates have risen from $3.39 to $4.02 per share in just the past three months. A lot happened during that time. A lot can happen in the next three months.

It’s all tailwind for AI chips and building data centers. There’s going to be a lot of money working to generate next-generation computing power, and Nvidia is in the driver’s seat. While Nvidia’s board authorized another $50 billion in share buybacks last summer, a fair amount of authority seems to think the stock isn’t expensive after all.

2. Sweetgreen: Up 214%

Let’s go from AI Chips to Green Goddess Farm Potato Chips. Sweetgreen operates a growing chain of fast-casual restaurants serving premium salads. It sounds simple, but Sweetgreen has actually been a better stock than Nvidia this year. It tripled in the first nine months of the year.

Sweetgreen thrived after the initial pandemic-related downturn that affected most restaurants. It has rattled off 13 consecutive quarters of more than 20% growth. Rapid expansion and positive compensation combine to deliver robust top-line growth. The bottom line is improving, but real profitability is still a few years away.

Sweetgreen’s value this year is largely a result of his starting line. Sweetgreen went public at $28 three years ago, but fell to pre-teens late last year. Despite tripling this year, the stock is only 25% higher than its IPO. The future is bright, and a major catalyst right now is companies calling employees back to the office. Sweetgreen is a popular lunch option for health-conscious workers, and the chain even has a program where it can set up dedicated outposts in large office buildings to allow for bulk lunchtime deliveries.

3. Sea Limited: Up 133%

With a gain of 133% this year, Sea Limited is behind the pack. Sea Limited is a player in e-commerce, online gaming and fintech. The Singapore-based company is benefiting from the recent rally in Asian stocks, but it is a global player that is moving higher on its own merits.

Revenue grew at least 20% in all three segments in its most recent quarter. Sea Limited has been in red ink for a long time, but finally turned profitable last year. Analysts see earnings per share tripling this year and nearly tripling again in 2025. Sea Limited is trading at 47 times next year’s estimated earnings. That might not seem like a bargain here, but the stock would need to nearly quadruple to revisit the all-time highs it hit three years ago. It also trades at a reasonable earnings multiple of less than 4. Momentum is strong right now and the cap is high.