The story of the stock market in 2023 has largely been about optimism around AI tinged by the continued threat of recession. Generative AI has propelled tech shares much higher. In fact, it’s very easy to argue that AI has prevented what could have been a very rapid collapse in 2023. AI has been a very positive factor overall this year.
As 2023 nears an end, there’s a reason to believe that a rally is in the works. Inflation continues to cool and that is setting the scene for potential rate cuts in the near future. A rally in late 2023 is entirely possible.
Taiwan Semiconductor (TSM)
Taiwan Semiconductor (NYSE:TSM) is among the most important Global firms that exist today. The foundry produces and manufactures semiconductors for many of the world’s chip makers.
First, investors should buy TSM stock because its shares are priced inexpensively at the moment. They’re much more to increase in value then they are to decrease in the short, mid, and long-term.
You’ll also get a dividend yielding 1.55%. overall, it’s a very reasonable and stable investment to make the benefits from the secular growth of artificial intelligence and other trends.
Secondly, there’s a reason to believe that Taiwan semiconductors output could increase in 2024. If that’s the case, it will be wise to stock up on its shares in anticipation of rising demand. So, that naturally raises the question of why one should believe that demand will rise next year.
In my mind, the major reason to believe that demand will rise is simply that rate cuts are on the horizon. firms across all Industries are going to continue to demand AI capable chips for their respective applications. borrowing will become cheaper and that will prompt the firms that provide those chips to increase order volumes from TSM.
Apple (AAPL)
It isn’t very difficult to find bearish news about Apple (NASDAQ:AAPL) and its stock at the moment.
That negativity isn’t unwarranted. Apple’s revenues have been very disappointing in 2023 as the other tech giants have essentially all grown.
Consumers aren’t buying many more iPhones at the moment. During the most recent period IPhone sales grew by a modest 3%. Meanwhile, the firm’s other Revenue generating products are facing real declines with iMac sales falling by 34%.
So what is there to like about Apple as we near the end of 2023? I think there are a few things. First, Apple is set to introduce its augmented reality headset in early 2024.
It is not expected to contribute meaningfully to Apple’s financial success immediately. But given how well Apple has done with its product introductions it’s reasonable to also assume that the Vision Pro will also be a success.
Further, this year’s Christmas season is expected to be particularly strong. That expectation, combined with the notion that a soft Landing is likely, could spur strong sales.
Nvidia (NVDA)
2023 has been a banner year for Nvidia (NASDAQ:NVDA). No other stock has benefited as heavily from generative AI as it has.
The company’s H100 semiconductors continue to be in very high demand for all AI applications.
With prices around $25,000 per chip and strong continued demand it would be reasonable to believe that reliance on the H1 chip alone is enough. Nvidia’s competitors simply aren’t capable of catching up to the H100’s performance.
Nvidia has already introduced its successor. The company recently announced the H200 chip which promises to increase the inference power of AI applications like ChatGPT. Nvidia’s leading chips, which have powered the rise of generative AI, just got stronger.
Companies across the board are going to be spending more in 2024 as rates decline. They are likely to scramble to secure their supply of Nvidia’s H200 chips in the same manner that occurred in 2023 for the H100 chips. Share prices are highly likely to rise.
DraftKings (DKNG)
DraftKings (NASDAQ:DKNG) Stock has performed phenomenally well throughout 2023 and should continue into 2024. AI has dominated stock market headlines but DraftKings has skyrocketed on the continued growth of legalized gambling.
The company continues to add new jurisdictions to its coverage Including Maine, Puerto Rico and North Carolina most recently. The reason to consider DraftKings is not that it continues to add new jurisdictions but rather based on its improving fundamentals.
DraftKings projects an adjusted EBITDA loss of $105 million for the current fiscal year. In 2024, things are expected to change. The company is projecting positive adjusted EBITDA between $350 million and $450 million in fiscal year 2024.
Growth has never been a problem for the company. Revenue guidance for The current fiscal year was recently increased to a range between $3.67 billion and $3.72 billion. That equates to a growth rate of 64% on a year over year basis.
Microsoft (MSFT)
Recent history is proven that it’s a bad idea to bet against Microsoft (NASDAQ:MSFT). The company continues to make the right decisions under current CEO Satya Nadella. in 2023, the story has largely centered on Microsoft’s early investment in OpenAI. That gave the company a valuable first mover advantage in generative AI.
And Microsoft has since continued to apply AI heavily to all of its offerings. Its Microsoft Office suite is now available with CoPilot and it’s applying artificial intelligence in hundreds of ways across its cloud platform, Azure.
The company’s fundamentals continue to be very strong. Its AI investment has paid off handsomely. The reason to watch Microsoft moving forward is that the company intends to further vertically integrate AI. The company recently announced its entry into in-house AI chips. Those chips, Azure Maia 100 and Cobalt 100, should make it less reliant upon Nvidia. That will result in lower costs for Microsoft and serve as a pilot project to expand further in-house AI chip development.
Riot Platforms (RIOT)
As the price of Bitcoin rises, so too should the price of Riot Platforms’ (NASDAQ:RIOT) shares. The company supplies the specialized computers that help enthusiasts mine Bitcoin. Thus, its stock continues to intrigue as Bitcoin’s prices remain in the mid $30,000 range.
The company doesn’t solely sell specialized mining computers. It also sells data hosting services and mines Bitcoin itself. The company mined 4,996 Bitcoin by the end of the third quarter. Riot platforms mined 1,106 Bitcoin during the most recent quarter. It costs the company $5,337 on average to mine each of those Bitcoin in 2023.
Bitcoin mining generated $31.2 million in revenues for the company during the most recent quarter. In total, revenues reached $51.9 million. The recent surge in Bitcoin prices has pulled the firm’s margins higher and brought average prices for Bitcoin during the quarter above $28,000.
Further, Riot Platforms has controlled its losses and has drastically reduced its losses.
Novo Nordisk (NVO)
Ozempic and Wegovy are sending Novo Nordisk (NYSE:NVO) higher and will continue to underpin the strength of the stock in late 2023 and beyond.
The GLP-1 drugs Have ignited Novo Nordisk’s shares sending them from $65 to $100 and 2023. sales continue to be strong and increased by 33% at a constant exchange rate for the Danish company.
The company is restricting the supply of starting doses of Wegovy which has limited results thus far. The company will have to ramp up production in the future. Weaknesses in manufacturing led to missed opportunities and customer supply failures for its drug.
It also faces other constraints, including the reticence of insurance firms to cover the cost of Ozempic and Wegovy. However, the drugs have proven so effective in reducing weight that it will be difficult For insurers to continue to deny their coverage.
Weight loss is significantly correlated to a reduction in associated comorbidities that also cost insurance companies substantial sums of money. Thus, it’s highly likely that Novo Nordisk will continue to be strong through the end of the year and into 2024 and beyond.
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.
