3 Hot Growth Stocks to Buy for 2024 and Beyond

The stock market overall has had a great year so far — S&P500 up 17%. Naturally, some hot stocks outpaced that growth, and while it may seem counterintuitive, some stocks that have already posted big gains could still be some of the best places for investors to put their money now.

Here are three growth stocks that have outperformed the market this year but have strong competitive positions that make them worth buying today and holding into the future.

Microsoft

As artificial intelligence (AI) has become the hottest topic on Wall Street, much of the attention has focused on high-end semiconductor companies like Nvidiawhich have been delivering stunning results quarter after quarter. However, investors should not forget that Microsoft (NASDAQ:MSFT) is at the forefront of the AI ​​boom, thanks in large part to its investment in OpenAI, the company behind ChatGPT.

Microsoft has already added AI features to several of its products, and because of the breadth of its product suite, many consumers have already started seeing them in action. For example, Copilot, which has been added to productivity apps like Word, Excel, and PowerPoint, can help users more easily create documents and analyze data.

AI is also impacting Microsoft’s business in other ways. In the most recent reported fiscal quarter, revenue from its Azure cloud unit grew 31% year over year, with 7 percentage points of growth coming solely from AI. Total revenue rose 17% to $62 billion, and earnings per share rose 20%.

Microsoft is a leader in cloud software and infrastructure, and the company’s investments in artificial intelligence are likely to strengthen its position in the coming years.

Apple

At first it seemed that Apple (NASDAQ:AAPL) was a laggard when it came to AI. While other tech companies were making headlines for their AI efforts, there wasn’t much news from the iPhone maker. That all changed last month when it held its annual developer conference to show off Apple Intelligence, which will launch later this year.

The most important thing about Apple’s foray into AI is how it will strengthen its ecosystem. Its new AI features will only be available on newer devices, which should force a certain degree of update cycle. Furthermore, while these features will be free when they debut, it’s possible to imagine a scenario where some aspects of its AI offerings become part of a subscription service. That would give a boost to Apple’s fast-growing services segment, which is now its second-largest revenue stream after iPhone sales.

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Apple is already one of the world’s largest companies and boasts one of the most recognizable brands. If its AI efforts continue to drive consumers to buy more devices and subscribe to more services, the stock could continue to reward shareholders.

Texas Instruments

With so much attention focused on a handful of companies producing cutting-edge semiconductor chips that can power AI, it’s easy to overlook a company like Texas Instruments (NASDAQ:TXN)which produces a wide range of lower-performance chips that are needed for everyday use and products. From your microwave to your car’s entertainment center, chips are almost everywhere, and Texas Instruments produces a lot of them.

Texas Instruments shares are up 18% year to date. However, that gain only brings the stock price back to where it was at the end of 2021, reflecting the struggles the company has faced over the past few years.

It’s important to remember that the semiconductor industry is cyclical, and outside of the high-performance AI chip niche, the industry has been in a cyclical decline for about a year. Texas Instruments’ revenue and net income fell, which is typical in these types of declines.

In summary, Texas Instruments is a key player in the semiconductor sector, and down cycles like the current one are normal. The fact that the stock has been rising year-to-date despite the company’s earnings and losses declines shows Wall Street’s belief that these market conditions will be challenging for the company in the short term. In the long term, Texas Instruments remains a solid business to buy now and hold for the future.

Is it worth investing $1,000 in Microsoft now?

Before you buy Microsoft stock, consider the following:

This Motley Fool Stock Advisor a team of analysts have just identified what they believe is Top 10 Stocks for investors looking to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could deliver huge gains in the years to come.

Consider when Nvidia We made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $780,654!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio-building tips, regular analyst updates, and two new stock picks each month. Stock Advisor the service has more than four times S&P 500 return since 2002*.

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*Stock Advisor Returns as of July 8, 2024

Jeff Santoro has positions in Apple, Microsoft, Nvidia, and Texas Instruments. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Texas Instruments. The Motley Fool recommends the following options: long January 2026 $395 call options on Microsoft and short January 2026 $405 call options on Microsoft. The Motley Fool has a disclosure policy.

3 Red-Hot Growth Stocks to Buy in 2024 and Beyond was originally published by The Motley Fool

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