The Nasdaq has hit an all-time high and continues moving upwards.
With inflation past all of us, it looks like the stock market streak will continue in the coming months. Whether you are planning to grow your investment or want to start your investment journey, choosing the right stocks is the key. A anticipated summer rate cut could boost spending, which can help improve the economy.
If you are ready for better days ahead, now is the time to load up your portfolio with stocks to turn $5K into $25K. These stocks have the potential to generate over 500% returns on your investment. Let’s take a look at them.
Microsoft (MSFT)
Tech giant Microsoft (NASDAQ:MSFT) is advancing its artificial intelligence (AI) prowess, continually impressing investors.
If you own a mutual fund, it will certainly have exposure to MSFT stock. The company, worth over $3 trillion, has a presence across multiple industries. The company reported an 18% year-over-year (YOY) revenue growth and an impressive 33% YOY rise in net income. Further, the management aims to achieve $500 billion in revenue by 2030.
Also, MSFT focuses on the cloud and is testing its own AI GPU chips to eliminate reliance upon other tech companies. Its biggest growth driver is Azure which saw a 31% YOY jump in revenue. Microsoft has integrated AI into Copilot which costs $20 per month, and already has 1.3 million developers and 50,000 enterprise subscribers. The one place where Microsoft is indispensable is the operating system.
Several businesses across the world are heavily dependent on its software, and this is one segment that will continue generating revenue for years. MSFT is up 8% year to date (YTD) and is trading at $402 today.
Overall, the stock is up 58% in the past year and has a dividend yield of 0.75%. The company hikes dividends regularly and will continue to generate passive income for investors.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is a no-brainer stock right now. Up 84% YTD and 280% in the year, the stock trades for $887. And if you wait any longer, the stock is going to soar beyond $1,000 very soon. If you had invested your $5,000 in Nvidia a few years ago, you would have already doubled your money. However, I believe this rally will continue in 2024 and beyond.
Nvidia is making the most of AI, and its gains over the past year can be attributed to the company’s investment and progress in AI. Known for setting the gold standard in graphics processing units, the demand for its H100 AI GPU is very high. Thus, several organizations are lining up to get their hands on this GPU. The company enjoys a price advantage in the industry and controls over 50% of the market.
Additionally, new partnerships have led to a rise in the demand for its AI chips and is projected to have control over 85% of the AI chip market this year. The company put all skepticism to rest with a blowout quarter. It reported a revenue of $22 billion, up 265% YOY and 22% from the previous quarter. For the full year, its revenue was $60 billion, up 126% YOY.
Finally, Nvidia has seen higher demand and better margins. In fact, it could soon jump into the custom chips market which is a massive untapped opportunity. It will see soaring revenue in the coming quarters, and investors will take home strong gains.
Amazon (AMZN)
While tech stocks ended 2023 with a bang, they have continued the rally this year.
Unsurprisingly, e-commerce giant Amazon (NASDAQ:AMZN) is one stock that has benefited the most. Driven by the holiday sales, it reported impressive results and is firing on all cylinders.
AMZN is trading for $173 today, much lower than the other two companies listed above. However, the stock is up 15% YTD and 85% in the year. Buy the stock while it is cheap because it could soon become too hot to touch.
With exposure to multiple industries, it is expanding its cloud and advertising segment. It reported net sales of $575 billion in 2023. Consumers continue to embrace online shopping, and physical stores are getting smaller in size.
Amazon will hold a large market share in online shopping since it has the ability and liquidity to provide the best e-commerce experience. Also, it is expanding the streaming business and generated $14.7 billion in advertising revenue in the fourth quarter. While this number is up 26% YOY, it could be just the start of larger successes.
One of its biggest growth drivers is Amazon Web Services (AWS) which has reported a 13% YOY growth in 2023 and generated a revenue of $91 billion. An industry leader, AWS is a strong segment of the company and is highly reliable. Amazon enjoys an advantage in the industry and will continue reporting impressive financials in the coming years.
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.
