7 Stock Picks That S&P 500 Bulls Can’t Afford to Ignore

Stocks to buy

The S&P 500 and other major stock indices continue to waver. April continues to be a volatile month. Inflation continues to be sticky with rates growing above 3% for the third straight month in March. There are also other indications that growth may be slowing. Yet, there continues to be reason for S&P 500 Bulls to remain optimistic.

For one, the markets have proven especially difficult to predict over the last few years. Just as soon as stocks are predicted to go one way they’ve seemed to go the other. Beyond that, there continues to be hope for one or more rate cuts in 2024. In short, optimism is a far from unreasonable position at the moment.

The U.S. economy has proven particularly resilient. That strength has transferred to the stock market. The S&P 500 is the best proxy for the U.S. economy which is yet another reason to remain bullish.

Google (GOOG,GOOGL)

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Google’s (NASDAQ:GOOG,GOOGL) recent earnings report provides all the reason any investor could need to remain bullish about the stock.

It looks like the company has finally figured out how to harness the power and profitability of artificial intelligence. Google reported $23.7 billion in profits during the quarter, a 57% increase on a year-over-year basis

The company continues to invest heavily in AI. it wasn’t always that way. Google fell behind other Tech Titans early on in the race to invest in artificial intelligence. Instead, it is a late push that has propelled Google back into the AI dominance conversation. The company has pushed billions of dollars into cloud and AI investment that are paying dividends.

By the way, Google announced that it will begin paying dividends while simultaneously initiating a share buyback program. Google’s search engine product is again strong. The company has gained stability through its newly announced dividend program, and it seems to be on the right track in terms of AI. All of these factors should strengthen investor sentiment in the notion that Google is back.

Impinj (PI)

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Impinj (NASDAQ:PI) isn’t a company that gets a lot of attention in general. That should change following the blowout earnings report. Following a big beat, the stock soared by more than 20%. 

The $76.8 million in revenues that the firm reported was ahead of analyst estimates. Included in the report was also GAAP earnings of $33.3 million. Those strong earnings were bolstered by a $45 million dollar win in a patent litigation suit. While some may worry that that is a one-off win and that earnings will suffer, consider that Impinj will also benefit from strong intellectual property moving forward.

The company provides miniature radio frequency ID chips used to collect data on items. 

Impends also provided strong guidance suggesting impressive sequential growth. The company expects revenue to rise to between $96 and $99 million in the coming quarter. GAAP Income should fall somewhere in the neighborhood of $22 million. That isn’t bad at all considering that the company won’t have the benefit of a $45 million litigation payout. 

American Express (AXP)

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It’s fair to say that bullish investors have good reason to choose American Express (NYSE:AXP) over other credit card stocks. It continues to outperform rivals including Visa (NYSE:V) and Mastercard (NYSE:MA).

That’s particularly true in 2024. AXP shares are up more than 25% year-to-date as I write this. Visa and MasterCard have risen by approximately 5% and 8% during the same time frame, respectively. The outperformance of American Express relative to those firms is not a new phenomenon. Instead, it dates back over the past five years or so. American Express stock has grown by triple digits during that periodwhile its rivals have grown substantially less.

That begs the obvious question: what differentiates American Express from its rivals? The obvious answer can be found in the credit-worthiness of its members.  American Express caters to a more affluent member base with higher credit-worthiness. As American credit card debt continually soars to new record highs, American Express is better positioned overall. 

Royal Caribbean (RCL)

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Cruise stocks are back. That’s the narrative the markets are following after Royal Caribbean (NYSE:RCL) posted strong first quarter earnings. 

Those earnings included some very positive figures including $360 million in net income. That was particularly welcome given the fact that Royal Caribbean posted a $48 million net loss a year ago during the same period. 

Revenues jumped by more than 29%. Consumer demand and spending for experiences including travel remains especially resilient. Growth in consumer demand for experience is more than double growth in consumer demand for goods over the last 12 months.

It continues to be quite a turnaround story for Royal Caribbean and other cruise stocks. Investors will remember that the big three cruise lines were all forced to cease operations during the pandemic. The story was similar to that for airlines. Each industry incurred massive losses as their respective fleets sat idle. However, there is one important difference: Cruise lines tend to benefit much less from government subsidies because they are often registered in tax havens. Point being, their resurgence is that much more impressive.

AMD (AMD)

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AMD (NASDAQ:AMD) has grown so fast that it has come to represent real risk. Back in October 2023, investors could have picked up shares for under $100. They quickly rose to more than $200 by early March. The reason is simple: AMD is inherently connected to the rise of AI and is Nvidia’s (NASDAQ:NVDA) primary challenger. That connection brings it higher in the good times and pulls it lower in the bad.

There’s currently reason to believe that the bad may be subsiding. AMD’s charts show that the company’s share price has instead steadily continued to rise over the last week. It appears that there is significant resistance near the $150 share price mark. 

There isn’t much to glean from that information. There’s no substantial catalyst that sets AMD apart and has made it settle in that range. It’s more of a simple recognition that the markets continue to believe in AMD overall. The company will soon report results and any positive news there promises to send it higher again.

Tesla (TSLA)

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Tesla (NASDAQ:TSLA) continues to work its way through a troubled period but is benefiting from a quickly warming market sentiment. 

One of the best ways to understand what is currently going on is to work through its delivery numbers. Tesla delivered 387,000 vehicles during the period. That was so far less than expected in earlier forecasts. Lower than expected deliveries leads to weaker earnings. However, Tesla’s 45 cents of earnings during the quarter were better than expected given how much deliveries fell. It’s very much a case of finding the positive in the negative.

Meanwhile, Tesla announced accelerated development plans for a low-priced vehicle. It’s clear that market demand for high-priced electric vehicles is not nearly as strong as it once was. The release of a low-price vehicle should make Tesla more competitive once again. Growth rate should rise as a result. 

Beyond that, it’s fair to assert that the market is looking for reasons to love Tesla as it has long suffered. Those same investors are increasingly concerned about other Magnificent Seven stocks and their valuations. That makes Tesla a prime choice at the moment. 

Broadcom (AVGO)

Broadcom (NASDAQ:AVGO) is one of the strongest secular stock choices for the AI chip boom. The company represents a strong mix of exposure to long-term trends, growth, and stability that few other firms can match.

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Broadcom is a semiconductor design firm with expertise across a number of fast growing verticals with long-term potential. That broad exposure to a number of high growth niches results in rapid growth. Revenues continue to grow at a rate of nearly 40% per quarter. Share prices have doubled over the last year. It all combines to suggest that Broadcom is a uniquely positioned chip designer with long-term potential.

Yet, at the same time, Broadcom is a stable firm. The company currently provides $21 in dividends for each share per quarter. 

Again, there is perhaps no other firm that provides that combination of long-term growth exposure and stability. Despite Broadcom’s rapid growth over the past year it would be a mistake for bullish investors to ignore it at this point.

On the date of publication, Alex Sirois did not have (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.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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