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4 Top Stocks to Tap Nasdaq's New All-Time High

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The Nasdaq Composite witnessed a robust 2023 and first quarter of 2024. The bull run has also continued into the second quarter despite growing concerns over inflation.

On May 14, the tech-heavy Nasdaq ended 0.8% higher to close at a new record high of 16,511.18 points. The index has rallied 10% year to date after jumping 43.4% in 2023 to record its best year since 2020.

This year, so far, has been great for Wall Street, with the Dow and the S&P 500 also notching record highs in February. The Nasdaq was a shade slow in catching up but finally hit an all-time high in February.

The index has since had a solid run and May particularly has been great. The rally comes despite growing concerns over inflation and rising uncertainty over rate cuts.

Factors Driving the Nasdaq Rally

This year, the Nasdaq’s dream run has primarily been driven by the enthusiasm surrounding artificial intelligence (AI), especially generative AI.

While the opinions of experts on the prospects of generative AI vary, significant enthusiasm surrounding the field has been noticed over the past year. Many believe that AI is still at a nascent stage and its full potential is yet to be realized.

Once this potential is unlocked, AI is expected to create significant business opportunities for technology companies to produce premium products and, in turn, boost their stocks.

Besides, the development of smart devices is contributing to the growth of the AI space, as they require computing and learning capabilities for tasks like face detection, image recognition, and video analytics.

These functions require high processing power, speed, memory, low power consumption, and improved graphic processors and solutions, all of which create favorable conditions for the semiconductor industry’s growth.

Moreover, while uncertainty over rate cuts raised concerns, the Federal Reserve said earlier this month that any further interest rate hike is unlikely. High-interest rates have a negative impact on growth assets such as technology stocks, and the Federal Reserve’s comments were cheered by investors.

Our Choices

Given this scenario, it would be ideal to invest in Nasdaq stocks such as Netflix, Inc. (NFLX - Free Report) , Alphabet Inc. (GOOGL - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Super Micro Computer, Inc. (SMCI - Free Report) thathave a strong potential in 2024. These stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and assure good returns. You can see the complete list of today’s Zacks #1 Rank stocks here.

Netflix, Inc. is considered a pioneer in the streaming space. NFLX has been spending aggressively on building its portfolio of original shows. This is helping Netflix sustain its leading position despite the launch of new services like Disney+ and Apple TV+, as well as existing services like Amazon Prime Video.

Netflix’s expected earnings growth rate for the current year is 52.1%. The Zacks Consensus Estimate for the current-year earnings has improved 7.4% over the past 60 days. NFLX currently sports a Zacks Rank #1.

Alphabet Inc. is one of the most innovative companies in the modern technological age. Over the last few years, GOOGL has evolved from primarily being a search-engine provider to cloud computing, ad-based video and music streaming, autonomous vehicles, and healthcare and others.

Alphabet’s expected earnings growth rate for next year is 30.5%. The Zacks Consensus Estimate for current-year earnings has improved 11.8% over the past 60 days. GOOGL presently sports a Zacks Rank #1.

NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.

NVIDIA has an expected earnings growth rate of 85% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the last 60 days. NVDA presently sports a Zacks Rank #1.

Super Micro Computer, Inc. designs, develops, manufactures and sells energy-efficient, application-optimized server solutions based on the x86 architecture. SMCI’s solutions include a range of rack mount and blade server systems, as well as components. SMCI emphasizes superior product design and uncompromising quality control to produce industry-leading serverboards, chassis and server systems.

Super Micro Computer has an expected earnings growth rate of 99.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the last 60 days. SMCI presently sports a Zacks Rank #1.

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