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4 Must-Buy Stocks as S&P 500 Continues to Reach New Milestones
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Key Takeaways
The S&P 500 hit its fifth straight record close, recovering from an 18% drop earlier this year.
Trade progress, easing inflation, and strong Q2 earnings reports are lifting investor confidence.
ADBE, MSFT, AMZN, and META show improving earnings estimates and strong growth potential for 2025.
The S&P 500 rose 0.4% on Friday to record its fifth consecutive record close — the longest streak in over a year. The index has made a solid rebound after almost entering a bear market in April and has been reaching new milestones over the past week.
The recent rally comes on the back of robust earnings by a slew of big companies and trade developments that have eased investors’ fears of the economy slowing down.
The S&P 500 hit a new high after finishing at 6,338.64 points on Friday, recording its fifth straight record close. This was also the index’s 14th record close of the year and the longest winning streak in more than a year. Earlier in the week, the S&P 500 surpassed 6,300 for the first time.
The S&P 500 had a remarkable journey this year that saw the index take a major hit in April before making a solid rebound. The index hit a record high in February, driven by optimism that Trump’s pro-business policies would boost the overall market. But shortly after taking office, Trump introduced sweeping tariffs.
Concerns about a potential global trade war triggered a sharp decline in stocks by April, with the index falling as much as 18% for the year and coming close to a bear market. However, the market began to recover once Trump declared a temporary halt on the tariffs and initiated trade talks with U.S. partners.
Since then, there has been no looking back for the index.
Investor Optimism, Earnings Driving Rally
The second-quarter earnings season has so far been impressive, with more than one-third of the companies in the S&P 500 having reported their quarterly results, 80% of which have surpassed estimates, according to LSEG data.
Friday’s rally came as Trump geared up to meet European Commission President Ursula von der Leyen, with expectations of striking a major trade deal.
Lately, deals have also been finalized with Japan, Indonesia and the Philippines before the Aug. 1 tariff deadline. Also, cooling inflation and a shrinking labor market have raised hopes that the Federal Reserve will resume its rate cuts if not in July, but soon. Market participants are hopeful that the Federal Reserve will implement at least two rate cuts, which will further boost the index.
S&P 500 Stocks With Growth Potential
Adobe Inc.
Adobe Inc. is one of the largest software companies in the world. ADBE picks up licensing fees from customers, which form the bulk of its revenues. Adobe also offers technical support and education that account for the balance.
Adobe has an expected earnings growth rate of 12% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1.3% over the past 60 days. ADBE presently has a Zacks Rank #2.
Microsoft Corporation
Microsoft Corporation is one of the largest broad-based technology providers in the world. MSFT dominates the PC software market, with more than 73% of the market share for desktop operating systems. Microsoft Corporation’s Microsoft 365 application suite is one of the most popular productivity software globally. MSFT is also one of the prominent public cloud providers that can deliver a wide variety of infrastructure-as-a-service and platform-as-a-service solutions at scale.
Microsoft Corporation has an expected earnings growth rate of 13.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. MSFT presently carries a Zacks Rank #2.
Amazon.com, Inc.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program, well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish a footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services.
Amazon.com has an expected earnings growth rate of 13.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. AMZN presently sports a Zacks Rank #1.
Meta Platforms
Meta Platforms, Inc. is the world’s largest social media platform. META’s portfolio offering evolved from a single Facebook app to multiple apps, like photo and video sharing app Instagram and WhatsApp messaging app, owing to acquisitions. Along with the in-house developed Messenger, these apps now form Meta’s family of products used by almost 3.96 billion people on a monthly basis as of Sept. 30, 2023.
Meta Platforms has an expected earnings growth rate of 7.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.2% over the last 60 days. META presently has a Zacks Rank #1.
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4 Must-Buy Stocks as S&P 500 Continues to Reach New Milestones
Key Takeaways
The S&P 500 rose 0.4% on Friday to record its fifth consecutive record close — the longest streak in over a year. The index has made a solid rebound after almost entering a bear market in April and has been reaching new milestones over the past week.
The recent rally comes on the back of robust earnings by a slew of big companies and trade developments that have eased investors’ fears of the economy slowing down.
Given the positive sentiment, it would be ideal to invest in S&P 500 stocks, such as Adobe Inc. (ADBE - Free Report) , Microsoft Corporation (MSFT - Free Report) , Amazon.com, Inc. (AMZN - Free Report) , and Meta Platforms, Inc. (META - Free Report) , which have strong potential in 2025. 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.
S&P 500 Rally Gathers Steam
The S&P 500 hit a new high after finishing at 6,338.64 points on Friday, recording its fifth straight record close. This was also the index’s 14th record close of the year and the longest winning streak in more than a year. Earlier in the week, the S&P 500 surpassed 6,300 for the first time.
The S&P 500 had a remarkable journey this year that saw the index take a major hit in April before making a solid rebound. The index hit a record high in February, driven by optimism that Trump’s pro-business policies would boost the overall market. But shortly after taking office, Trump introduced sweeping tariffs.
Concerns about a potential global trade war triggered a sharp decline in stocks by April, with the index falling as much as 18% for the year and coming close to a bear market. However, the market began to recover once Trump declared a temporary halt on the tariffs and initiated trade talks with U.S. partners.
Since then, there has been no looking back for the index.
Investor Optimism, Earnings Driving Rally
The second-quarter earnings season has so far been impressive, with more than one-third of the companies in the S&P 500 having reported their quarterly results, 80% of which have surpassed estimates, according to LSEG data.
Friday’s rally came as Trump geared up to meet European Commission President Ursula von der Leyen, with expectations of striking a major trade deal.
Lately, deals have also been finalized with Japan, Indonesia and the Philippines before the Aug. 1 tariff deadline. Also, cooling inflation and a shrinking labor market have raised hopes that the Federal Reserve will resume its rate cuts if not in July, but soon. Market participants are hopeful that the Federal Reserve will implement at least two rate cuts, which will further boost the index.
S&P 500 Stocks With Growth Potential
Adobe Inc.
Adobe Inc. is one of the largest software companies in the world. ADBE picks up licensing fees from customers, which form the bulk of its revenues. Adobe also offers technical support and education that account for the balance.
Adobe has an expected earnings growth rate of 12% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1.3% over the past 60 days. ADBE presently has a Zacks Rank #2.
Microsoft Corporation
Microsoft Corporation is one of the largest broad-based technology providers in the world. MSFT dominates the PC software market, with more than 73% of the market share for desktop operating systems. Microsoft Corporation’s Microsoft 365 application suite is one of the most popular productivity software globally. MSFT is also one of the prominent public cloud providers that can deliver a wide variety of infrastructure-as-a-service and platform-as-a-service solutions at scale.
Microsoft Corporation has an expected earnings growth rate of 13.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. MSFT presently carries a Zacks Rank #2.
Amazon.com, Inc.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program, well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish a footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services.
Amazon.com has an expected earnings growth rate of 13.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. AMZN presently sports a Zacks Rank #1.
Meta Platforms
Meta Platforms, Inc. is the world’s largest social media platform. META’s portfolio offering evolved from a single Facebook app to multiple apps, like photo and video sharing app Instagram and WhatsApp messaging app, owing to acquisitions. Along with the in-house developed Messenger, these apps now form Meta’s family of products used by almost 3.96 billion people on a monthly basis as of Sept. 30, 2023.
Meta Platforms has an expected earnings growth rate of 7.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.2% over the last 60 days. META presently has a Zacks Rank #1.