2024 started with a bang, initially leaving behind the worries of inflation and a high-interest environment. The first quarter was excellent with Nasdaq hitting new highs and several stocks soaring beyond the 52-week highs. However, the second quarter has started on a muted note with a higher-than-expected inflation report and a subsequent delay in rate cuts. But the ongoing earnings season could bring about a much-needed rally in the stock market. This means now is the time to watch out for the stocks with earnings potential.
Investors are eagerly watching out for earnings and some companies have the potential to impact the entire market after their results. Buying such stocks well in time can help make the most of the post-results upside. The stocks listed here have the potential to rally after reporting impressive quarterly earnings numbers.
Nvidia (NVDA)
The one stock that can impact the entire stock market is Nvidia (NASDAQ:NVDA). A jewel in the tech industry, Nvidia is making the most of the AI hype and holds over 80% of the market share. With the rising demand for AI chips, Nvidia is set to benefit as no other company has been able to come close to its market domination.
The company reports results on May 22nd and it can take the stock to $1,000. Up 75% year-to-date, NVDA stock is trading at $846 right now and I am confident it will beat analyst expectations which will take the stock higher.
The management is aiming for a revenue of $24 billion in the quarter, up from $22.1 billion reported in the fourth quarter. This is one company that can make several AI stocks rally after reporting impressive quarterly results and analysts have a bullish view on Nvidia stock. With its market capitalization of 1.99 trillion at the time of writing, it could take the whole market up with it, which makes it one of those stocks with earnings potential.
Microsoft (MSFT)
Another tech giant, Microsoft (NASDAQ:MSFT) garners a lot of investor interest before the quarterly results. Up 9% YTD, the stock is exchanging hands for $404 today and is making the most of its AI investments.
The company has integrated AI in its products and services which has boosted revenue. In the previous quarter, the company beat expectations and reported an impressive 18% rise in revenue to hit $62 billion while the net income was up 33% to hit $21.9 billion. In the third quarter, it expects revenue between $60 billion and $61 billion.
Microsoft reports on April 25 and it has successfully managed to beat EPS expectations in the past four quarters. It recently announced a $1.5 billion investment in G42, an Emirati company. It has also announced an investment of $2.9 billion for the expansion of cloud infrastructure and AI in Japan. Strong results could boost MSFT stock.
Amazon (AMZN)
Having reported a record quarter driven by holiday sales in January, Amazon (NASDAQ:AMZN) has been on a roll since then. The stock is up 19% YTD and went from $155 to $171 after the fourth-quarter results and has been moving upwards. The company is set to announce Q1 results on April 30 and the market is already bullish about the event. It has successfully beaten EPS in the past four quarters and could do the same in the first quarter results.
Amazon is aiming for an 8% to 13% rise in net sales in the range of $138 billion to $143 billion and the operating income to range between $8 billion and $12 billion. It will be interesting to see the company’s progress in the cloud segment and advertising segment. This is the key reason why I believe it’s one of those stocks with earnings potential.
The advertising segment is projected to remain one of its fastest-growing sectors and we could see some strong numbers as companies have started to invest in marketing this quarter. It will be exciting to see how high the stock rallies from here.
Super Micro Computer (SMCI)
The one company that has had a better year than Nvidia is Super Micro Computer (NASDAQ:SMCI). Since it is directly connected with Nvidia, it grows whenever Nvidia’s business grows. Up 225% YTD, the stock is exchanging hands for $928 and its rally isn’t over yet. The stock is set to keep moving upwards and it could go beyond $1,000 after the results. This high stock price could mean it’s also a possible candidate for a stock split, which could infer indirect benefits for investors.
It reported sales of $3.66 billion in the second quarter and the net income stood at $296 million. For the third quarter, the management is aiming for net sales in the range of $3.7 billion to $4.1 billion and a net income per share between $4.79 to $5.64.
The company is set to announce results on May 7. It beat EPS expectations in the past three quarters and could do the same. Loop Capital analyst expects a 70% upside for SMCI from the current level, driven by the high demand for SMC’s products from data centers and institutions.
Chevron (CVX)
Oil and gas giant Chevron (NYSE:CVX) is another stock that has the potential to rocket after reporting strong earnings. With oil trading over $80 per barrel, I believe Chevron will report impressive numbers and hike the dividend. It is one of the top stocks with earnings potential.
The company is a cash flow engine and has impressed investors with strong numbers in the past. Trading at $157 today, the stock is up 5% YTD but down 7% in the year. Scheduled to report the first-quarter earnings on April 26, Chevron reported earnings of $2.3 billion in the fourth quarter and announced an 8% hike in the quarterly dividend.
The company expects production to increase 4%-7% this year and it will reflect on the numbers. Chevron has also invested in a solar-to-hydrogen plant and we could get more details about it after the earnings.
Despite the market uncertainty, Chevron has a financial leeway as compared to other industry players. It has enough reserves to keep making capital investments while rewarding shareholders.
Alphabet (GOOG, GOOGL)
Another tech company, Alphabet’s (NASDAQ:GOOGL, NASDAQ:GOOG) results are highly anticipated in the market. As one of the biggest tech giants, it sets the momentum for other tech companies and has an impact on the sector as a whole.
GOOG stock is up 12% YTD and 49% in the year. Trading for $157, the stock has been on an upward rally since March. While it is nearing the 52-week high, I think there is more to come. Alphabet announces results on April 25 and strong results could boost the stock. It is expected that Google Cloud and Gemini will continue to generate growth for the business.
Alphabet reported the fastest quarter for revenue growth in Q4, 2023 and investors expect the same momentum to continue. It reported a revenue of $86.31 billion and EPS of $1.64. However, due to the drop in ad revenue, the shares slid post results.
Analysts are also bullish on GOOG’s prospects EPS wise this year, as they collectively anticipate its EPS will increase by 20.95%, reaching $7.01.
Visa (V)
Set to report on April 23, fintech giant Visa (NYSE:V) will have all investors looking at its financials. The company is one of the best fintech businesses to own and has been resilient throughout the market uncertainty. It managed to report impressive numbers even in times of high inflation and with consumer spending improving, Visa is set to benefit.
Up 4% YTD, V stock is trading for $271 and has seen a pullback over the past couple of weeks. The stock could benefit from the increased adoption and usage of cards in addition to economic expansion. It ended the fourth quarter with a revenue of $8.6 billion and a net income of $4.7 billion, beating estimates.
We could see the company beat estimates again as the macroeconomic conditions have improved this quarter. Visa hasn’t disappointed in the past and won’t do so this quarter. The company is well-positioned for long-term growth and several analysts have a bullish view on V stock.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.