Marking the right stocks to buy is crucial for maximizing returns and securing long-term financial growth. Among the myriad options available, three companies stand out as compelling choices. These companies may have high leads, like a trillion-dollar market cap, by capitalizing on AI and Fintech trends similar to Amazon (NASDAQ:AMZN).
These companies are in charge of global payment innovation, capitalizing on digital transformation trends and expanding their market presence with innovative payment solutions. They are leveraging their vast user base and advanced AI capabilities and continue to redefine digital engagement and advertising effectiveness across their platforms.
Meanwhile, the strategic focus on AI and semiconductor solutions has propelled revenue growth significantly. This is particularly true in data centers and networking sectors. Pinpointing the underlying fundamentals driving these companies’ leads is pivotal to navigating volatile markets and capitalizing on emerging opportunities. Here, the focus is on these companies’ financial strengths, strategic initiatives and market positions, exploring why these stocks are the investments for today but may continue to be tomorrow’s market leaders.
Visa (V)
Visa (NYSE:V) holds a grip on digital payments, facilitating secure and efficient transactions worldwide. The company generated $8.8 billion in net revenue (Q2 2024), marking a 10% increase year-over-year (YoY). This growth led to a 20% increase in EPS, highlighting Visa’s effective revenue management and operational edge in driving profitability.
Moreover, Visa’s core business strength lies in its global payment volume. This grew 8% YoY in constant dollars. This growth was driven by a 6% increase in US payment volume and a sharp 11% growth in international payment volume. The 16% YoY growth in cross-border volume is particularly notable, excluding intra-European transactions. This reflects Visa’s strong international presence and ability to capture cross-border transactions efficiently.
Additionally, Visa targets a massive addressable market, estimating over $20 trillion in global purchase personal consumption expenditure (PPCE), excluding Russia and China. This growth is driven by initiatives like tap-to-pay and converting domestic network cards to Visa credentials. This is particularly highlighted by the success in Europe, with over 20 million credentials converted since 2018.
In short, payment volume growth, market expansion and the resultant top-line boost solidify Visa’s presence on the stocks to buy list.
Meta (META)
Meta (NASDAQ:META) prevails in social media and digital advertising. In Q1 2024, Meta had a top-line of $36.46 billion, marking a sharp 27% increase YoY. This growth was primarily driven by a corresponding 27% rise in ad revenue, reaching $35.6 billion. This growth emerges from robust online commerce, gaming and entertainment performances. Revenue growth was robust in regions like the Rest of the World (40%) and Europe (33%). Hence, this reflects sharp monetization strategies tailored to diverse geographic markets.
Further, the company can effectively monetize its vast user base across its family of apps. This signifies its robust engagement strategies and sophisticated AI-powered recommendation systems integrated across platforms like WhatsApp, Messenger, Instagram and Facebook. Hence, these AI capabilities may generate revenue by boosting advertising effectiveness and user engagement.
With billions of daily active people across its Family of Apps in March 2024, up 7% YoY, Meta continues to penetrate online advertising sharply. Overall, with a solid foundation to scale its AI-driven services and capitalize on emerging market opportunities, this global expansion makes Meta a top mark on the stocks to buy list.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) dominates AI-driven networking, data center semiconductors and infrastructure. The company’s AI revenue grew exceptionally, increasing by 280% YoY. The company can capitalize on the expanding AI sector. This is particularly true in the data center market, which positions the company well for continued revenue expansion. Following the acquisition of VMware, the annualized booking value (ABV) for VMware products accelerated from $1.2 billion to $1.9 billion from Q1 to Q2. This reflects strong customer adoption under Broadcom’s management.
Broadcom’s semiconductor segment also had solid growth, with revenue reaching $3.8 billion, up 44% YoY. This growth was driven by increased demand from hyperscalers for AI networking and custom accelerators. Broadcom achieved consolidated revenue of $12.5 billion, marking a 43% YoY increase. Moreover, the gross margins for its infrastructure software were notably high, at 88%. This is showcasing its ability to maintain profitability amidst revenue growth. Operating margins for infrastructure software were also solid at 60%. Hence, this indicates sharp cost management and an operational edge in the VMware integration.
Broadcom’s top-line performance, progressive VMware integration and bottom-line improvement led to its presence on the stocks to buy list.
As of this writing, Yiannis Zourmpanos held a long position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.