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Nasdaq's Rally to Continue in 2024: 5 Must-Buy Growth Techs
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The tech-laden Nasdaq Composite has been one of the top-performing indices in 2023, with more than 43% return, posting its best yearly performance since 2020.
Robust performances from the “Magnificent Seven” — a term coined by Bank of America analyst Michael Hartnett — comprising Apple, Alphabet, Amazon, Meta Platforms, Microsoft, NVIDIA (NVDA - Free Report) and Tesla, helped the index to soar last year.
Nasdaq’s momentum is expected to continue in 2024 with the growing expectations of a broader rally thanks to resilient economic growth, cooling inflation, growing expectations of rapid rate cuts by the U.S. Federal Reserve, the upswing in consumer confidence and increasing chances of a soft landing.
The December Job report set to be released this Friday will play a crucial role in determining how aggressively the Federal Reserve will cut rates in the near term. Federal Reserve expects core inflation to decline to 3.2% in 2023, 2.4% in 2024 and 2.2% in 2025. Inflation is expected to hit the Federal Reserve’s 2% target in 2026.
The increasing chances of a soft landing — a scenario in which inflation cools off to the Fed’s target without a recession — is expected to benefit technology stocks.
Technology stocks are well-poised to benefit from the growing proliferation of AI and machine learning. Spending on AI systems is expected to accelerate in 2024 as organizations continue to leverage AI as part of their digital transformation efforts. The advent of generative AI has further attracted investments.
Improving semiconductor sales bodes well for technology stocks. The World Semiconductor Trade Statistics organization expects semiconductor sales to grow 13.1% in 2024, following an estimated 9.4% decline in 2023.
Our Picks
Here, we have picked five technology stocks that are set to outperform the Nasdaq this year.
Per the Zacks proprietary methodology, stocks with this favorable combination offer good investment opportunities.
Image Source: Zacks Investment Research
Blackbaud (BLKB - Free Report) is benefiting from robust organic growth and extensive cost-cutting measures. Momentum in both contractual and transactional recurring revenue streams, coupled with rising volumes across its other payment solutions, bode well.
Blackbaud is expected to benefit from its new contractual pricing approach. It is also working toward rolling out AI-enabled capabilities across its portfolio to help clients optimize fundraising.
The Zacks Consensus Estimate for 2024 earnings has improved 1.6% over the past 60 days to $4.53 per share. BLKB shares have returned 42.7% in the past year.
JFrog (FROG - Free Report) is riding on strong demand for its cloud services, broader adoption of security solutions and growing enterprise-scale adoption of its software supply chain platform.
Expanding clientele has been a tailwind. In third-quarter 2023, customers with annual recurring revenue of more than $100K grew to 848, up 22% year over year.
The consensus mark for JFrog’s 2024 earnings has increased 6% to 53 cents per share over the past 60 days. FROG shares have surged 52% in the trailing 12-months.
Gitlab (GTLB - Free Report) is benefiting from a robust product portfolio that integrates AI-powered DevSecOps features into a single application to boost productivity. It enables businesses to create more reliable and functionality-packed mission-critical software. GTLB’s platform improves engineering productivity and reduces software spend.
Gitlab’s shares have returned 36.7% in the trailing 12-months. The Zacks Consensus Estimate for its fiscal 2025 earnings has improved 126.7% over the past 60 days to 34 cents per share.
MongoDB (MDB - Free Report) shares have returned 101.1% in the past year. It is benefiting from strong momentum in Atlas.
MDB is witnessing continuous growth in the MongoDB Atlas customer base. Its deepening focus on acquiring new customers, cross-selling to existing customers and retaining them with the introduction of new Atlas features is expected to drive its top-line growth in the days ahead.
The launch of Atlas for Industries, Atlas for Financial Services, Atlas for the Public Sector, and Atlas for Manufacturing and Automotive remains a major upside.
The consensus mark for fiscal 2025 earnings has increased 14.3% to $3.20 per share over the past 60 days.
NVIDIA is benefiting from growing investments in generative AI. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. Considering surging AI investments across the data center end market, NVDA expects its fourth-quarter fiscal 2024 revenues to reach $20 billion from $6.05 billion in the year-ago quarter.
NVIDIA is dominating the market for AI chips. The company’s GPUs are already being applied in AI models. This is expanding NVDA’s footprint in untapped markets like automotive, healthcare and manufacturing. Collaborations with Mercedes-Benz and Audi are likely to advance NVIDIA’s presence in autonomous vehicles and other automotive electronics space.
NVIDIA shares have surged 234.5% in the trailing 12-months. The consensus mark for fiscal 2025 earnings has jumped 21.8% over the past 60 days to $19.91 per share.
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Nasdaq's Rally to Continue in 2024: 5 Must-Buy Growth Techs
The tech-laden Nasdaq Composite has been one of the top-performing indices in 2023, with more than 43% return, posting its best yearly performance since 2020.
Robust performances from the “Magnificent Seven” — a term coined by Bank of America analyst Michael Hartnett — comprising Apple, Alphabet, Amazon, Meta Platforms, Microsoft, NVIDIA (NVDA - Free Report) and Tesla, helped the index to soar last year.
Nasdaq’s momentum is expected to continue in 2024 with the growing expectations of a broader rally thanks to resilient economic growth, cooling inflation, growing expectations of rapid rate cuts by the U.S. Federal Reserve, the upswing in consumer confidence and increasing chances of a soft landing.
The December Job report set to be released this Friday will play a crucial role in determining how aggressively the Federal Reserve will cut rates in the near term. Federal Reserve expects core inflation to decline to 3.2% in 2023, 2.4% in 2024 and 2.2% in 2025. Inflation is expected to hit the Federal Reserve’s 2% target in 2026.
The increasing chances of a soft landing — a scenario in which inflation cools off to the Fed’s target without a recession — is expected to benefit technology stocks.
Technology stocks are well-poised to benefit from the growing proliferation of AI and machine learning. Spending on AI systems is expected to accelerate in 2024 as organizations continue to leverage AI as part of their digital transformation efforts. The advent of generative AI has further attracted investments.
Improving semiconductor sales bodes well for technology stocks. The World Semiconductor Trade Statistics organization expects semiconductor sales to grow 13.1% in 2024, following an estimated 9.4% decline in 2023.
Our Picks
Here, we have picked five technology stocks that are set to outperform the Nasdaq this year.
These stocks have a favorable combination of a Growth Score of A and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per the Zacks proprietary methodology, stocks with this favorable combination offer good investment opportunities.
Image Source: Zacks Investment Research
Blackbaud (BLKB - Free Report) is benefiting from robust organic growth and extensive cost-cutting measures. Momentum in both contractual and transactional recurring revenue streams, coupled with rising volumes across its other payment solutions, bode well.
Blackbaud is expected to benefit from its new contractual pricing approach. It is also working toward rolling out AI-enabled capabilities across its portfolio to help clients optimize fundraising.
The Zacks Consensus Estimate for 2024 earnings has improved 1.6% over the past 60 days to $4.53 per share. BLKB shares have returned 42.7% in the past year.
JFrog (FROG - Free Report) is riding on strong demand for its cloud services, broader adoption of security solutions and growing enterprise-scale adoption of its software supply chain platform.
Expanding clientele has been a tailwind. In third-quarter 2023, customers with annual recurring revenue of more than $100K grew to 848, up 22% year over year.
The consensus mark for JFrog’s 2024 earnings has increased 6% to 53 cents per share over the past 60 days. FROG shares have surged 52% in the trailing 12-months.
Gitlab (GTLB - Free Report) is benefiting from a robust product portfolio that integrates AI-powered DevSecOps features into a single application to boost productivity. It enables businesses to create more reliable and functionality-packed mission-critical software. GTLB’s platform improves engineering productivity and reduces software spend.
Gitlab’s shares have returned 36.7% in the trailing 12-months. The Zacks Consensus Estimate for its fiscal 2025 earnings has improved 126.7% over the past 60 days to 34 cents per share.
MongoDB (MDB - Free Report) shares have returned 101.1% in the past year. It is benefiting from strong momentum in Atlas.
MDB is witnessing continuous growth in the MongoDB Atlas customer base. Its deepening focus on acquiring new customers, cross-selling to existing customers and retaining them with the introduction of new Atlas features is expected to drive its top-line growth in the days ahead.
The launch of Atlas for Industries, Atlas for Financial Services, Atlas for the Public Sector, and Atlas for Manufacturing and Automotive remains a major upside.
The consensus mark for fiscal 2025 earnings has increased 14.3% to $3.20 per share over the past 60 days.
NVIDIA is benefiting from growing investments in generative AI. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. Considering surging AI investments across the data center end market, NVDA expects its fourth-quarter fiscal 2024 revenues to reach $20 billion from $6.05 billion in the year-ago quarter.
NVIDIA is dominating the market for AI chips. The company’s GPUs are already being applied in AI models. This is expanding NVDA’s footprint in untapped markets like automotive, healthcare and manufacturing. Collaborations with Mercedes-Benz and Audi are likely to advance NVIDIA’s presence in autonomous vehicles and other automotive electronics space.
NVIDIA shares have surged 234.5% in the trailing 12-months. The consensus mark for fiscal 2025 earnings has jumped 21.8% over the past 60 days to $19.91 per share.