In November 2023, identifying lucrative investment opportunities can be challenging. Despite average business fundamentals, speculative stocks often rebound robustly from oversold levels. This occurs particularly with high short interest, leading to significant short-covering rallies. However, for investors maximizing upside potential amid market rally, it’s preferable to seek more stable ways to ride this trend.
These three large-cap growth stocks do just that. Each of these names provides the kind of results-driven upside long-term investors want to see. Profitable technology companies boast a track record of providing significant top- and bottom-line growth when times get good.
So, for those who believe the future will be better, keep an eye on these three companies.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is a unique company in the world of large-cap tech stocks. Yes, the company’s social media suite is led by its dominant positions in Facebook, WhatsApp, and YouTube. These are a cash cow providing stability and long-term growth profile for investors.
However, the META’s big investments into the metaverse (and the rebranding) have led investors to reconsider, given its strategic direction.
Clearly, numbers don’t lie, and they’ve simply been too good lately. Meta’s recent Q3 numbers, which included $14 billion in free cash flow (up from $10 billion in the previous quarter), were incredible. Additionally, Meta is optimistic about leveraging AI to enhance the platform’s value for users and advertisers. They plan AI-driven video recommendations contributing to increased engagement on Facebook and Instagram.
With substantial investments in VR and AR, particularly through Oculus VR headsets, it’s a frontrunner in the space. META witnessed a remarkable stock surge driven by accelerated sales growth and strategic cost-cutting measures.
Moreover, the company’s 7% growth in daily active users bolstered engagement and ad sales, while a 24% reduction in full-time employees contributed to a 40% operating income-to-sales ratio. The reported momentum suggests continued success, making META an essential investment for those exploring the metaverse.
Zoom Communications (ZM)
In Q2, Zoom Communications (NASDAQ:ZM) saw 3% revenue growth year over year (YOY). This disappointed investors and analysts which predicts 11.7% growth annually to 2027.
With $6 billion in cash, $336 million in cash flow, and $197 million in profit over the first half of 2023, Zoom is financially robust. Future growth relies on corporate sector expansion and becoming a comprehensive business communication platform. This will integrate AI innovations like Zoom IQ and investing in Anthropic, an AI startup.
Zoom’s optimistic outlook stems from the success of its Zoom AI Companion, reaching one million meeting summaries. This tool offers summaries and transcripts. Further, it aims to attract businesses to premium subscriptions, enhancing meeting quality. Anticipate increased profits as more companies adopt this tool in the coming quarters.
In other company news, Zoom and TalkTalk have partnered to distribute Zoom’s communication and collaboration services to U.K. resellers. This collaboration includes offering Zoom Phone and Zoom Contact Center, featuring AI capabilities and various additional services. Tom O’Hagan, Managing Director of TalkTalk Wholesale Services, expressed satisfaction with Zoom’s commitment to innovation.
Shopify (SHOP)
Shopify (NYSE:SHOP) continues to implement strategic initiatives to enhance merchant experiences and boost revenue growth. This includes a partnership with Amazon (NASDAQ:AMZN) through the Buy with Prime App and the introduction of AI-powered tools for streamlined processes. This reinforces Shopify’s commitment to merchant support.
SHOP stands out as a leading e-commerce platform, offering comprehensive tools for successful online businesses. Its Q3 growth was fueled by an influx of new merchants. In turn, it solidifies its economic moat and benefits from high switching costs due to the platform’s robust offerings and the effort required to migrate to competitors.
In Q3, Shopify surpassed earnings expectations with 24 cents per share and revenue of $1.71 billion, outperforming analyst estimates. The platform’s e-commerce sales reached $56.2 billion, beating the projected $54.2 billion. Tight cost controls and strategic moves, including a partnership with Amazon, contributed to this robust performance.
Shopify anticipates a 25% or better revenue growth for the full year 2023. This positive momentum marks a significant rebound for SHOP stock, which has surged 65% in 2023 after an 85% decline in the preceding year.
On the date of publication, Chris MacDonald has a LONG position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
