3 Stocks That Are Leaving Their Competitors in the Dust

Stocks to buy

Corporations that outperform their competitors can generate outsized returns for their investors. While it’s possible to find an undervalued hidden gem growing fast, picking stocks leaving competitors behind can also lead to higher gains.

The three corporations on this list have a history of outperforming the competition. Thanks to their expertise, resources and other factors, these businesses have developed large moats. Investors looking for an opportunity to outpace major indices may want to consider these top picks.

Alphabet (GOOG, GOOGL)

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Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is the digital advertising leader. Google and YouTube are the two most popular websites, generating billions of monthly visitors. The company’s revenue, net income and market cap exceed runner-up Meta Platforms (NASDAQ:META).

Alphabet shares haven’t moved up like most of the other Magnificent Seven stocks since the company has been behind on artificial intelligence. Snafus with Bard and Gemini AI hasn’t sat well with investors, but a shift is on the horizon. Apple (NASDAQ:AAPL) is considering the Gemini AI engine for its smartphones, which could lead to additional revenue for the search giant. Alphabet stock increased by 4% on the news.

Recent artificial intelligence projects have been the only weak spot for Alphabet stock. Revenue and earnings growth are impressive, and the company’s cloud platform also leaves most of the competition in the dust. Alphabet is also investing in other ventures to diversify its revenue streams further.

Crowdstrike (CRWD)

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Cybersecurity stocks have been reliable choices for many years. These growth stocks continued to perform well as more businesses and consumers sought to protect themselves from hackers. 

There’s still a great need for cybersecurity solutions and enhanced software. However, most cybersecurity firms have faltered in recent quarters and reduced guidance. Most cybersecurity corporations have dealt with the recent woes, but Crowdstrike (NASDAQ:CRWD) isn’t like most cybersecurity stocks.

While the industry continues to experience headwinds, Crowdstrike surprised investors with a 33% year-over-year growth in revenue. The company’s Q4 FY24 report also revealed that the company generated $3.44 billion in annual recurring revenue and reached $53.7 million in net income. That’s a 213.1% year-over-year improvement.

Crowdstrike should continue to gain market share with each passing quarter. 2024 looks like it will be a slow year for many cybersecurity companies. For Crowdstrike, it’s full speed ahead. Shares are up by 30% year-to-date and have gained an astonishing 400% over the past five years.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) is leaving competitors in the dust across multiple industries. Copilot has been a big success for the company’s artificial intelligence initiatives and helped to expand its cybersecurity presence

The company also has a large lead in cloud computing. Microsoft Cloud generated $33.7 billion of the corporation’s $62.0 billion in Q2 FY24 revenue. Cloud revenue increased 24% year-over-year, while business-wide revenue increased 18% year-over-year. Net income jumped by 33% year-over-year, which helped the company continue its trend of high dividend hikes.

The stock has also left the S&P 500Nasdaq 100 and most investments in the dust. Microsoft is the largest holding in both of those indices. The tech conglomerate’s stock is up by 55% over the past year and has gained 260% over the past five years. Shares are also off to a great start, thanks to a 14% year-to-date gain. The stock trades at a 38 P/E ratio.

On this date of publication, Marc Guberti held long positions in GOOG and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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