It’s likely that the 2024 summer travel season will be one marked by a further return to normalcy. The summer of 2023 was a particularly strong travel season with nearly 1/3 of American households taking a vacation. That represented a record dating back to 2015. 2024 is expected to be even stronger. With the Transportation Security Administration (TSA) expecting record-setting volumes, it’s worth considering hot stocks that you can’t afford to skip this summer.
Two of the three stocks discussed below are directly related to strong expectations surrounding travel. The other has almost no connection to travel trends but is worth watching nonetheless.
Anyway, this article is primarily about the uptick in travel expected this summer and stocks that are set to benefit because of it. U.S. consumer confidence is currently lower than it was anticipated to be at this point. Yet, travel is expected to be strong throughout the summer based on volume.
Booking Holdings (BKNG)
Booking Holdings (NASDAQ:BKNG) is an obvious choice for stocks you can’t afford to skip this summer given everything I’ve just explained. Travel is expected to be high and passenger volumes are expected to reach record levels. Thus, the travel and restaurant reservations Booking Holdings offers should be in high demand.
Booking holding certainly has strong catalysts in its favor but the company also has strong fundamentals backing it as a stock choice. The company is undergoing a period of rapid growth. Revenues nearly doubled between 2021 and 2023. The company also increased its overall profitability during that period and generally looks like a strong company overall.
It’s a simple, straightforward investment. Booking Holdings is in the midst of a period of strength at the moment. Demand is forecast to be strong at the same time. It looks like Booking Holdings represents a prime example of not overcomplicating your investment strategy and simply picking well operated companies when the environment is conducive to growth.
Southwest Airlines (LUV)
Southwest Airlines (NYSE:LUV) is definitely a stock to watch at the moment. It is one of many airlines expected to see greater volumes as travel surges this summer. However, despite that positive news, Southwest Airlines continues to struggle.
The company continues to struggle to accurately forecast demand patterns that help it provide guidance to investors. that manifested recently as a further downgrade to revenue per available seat mile (RASM), a measure of pricing power. Airlines continue to add seating and routes which are largely out of Southwest’s control.
The lowered metric indicates that Southwest Airlines has little power over pricing at the moment. However, all is not lost. The company continues to predict record operating revenues during the second quarter. While volumes will be high and cause operating revenues to spike, there are other reasons to believe LUV stock could rise.
The company may be forced to oust its current CEO following a period of weak performance. Elliott Investment Management owns $1.9 billion worth of LUV shares and is calling for the ouster of the current management team. Given the fact that LUV’s share price has fallen by 50% over the last 2 years, it might be exactly what the company needs.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is a stock that is well-positioned to grow this summer and particularly in the coming weeks.
A lot of the current opportunity for AMD relates to weakening sentiment around its primary competitor, Nvidia (NASDAQ:NVDA). Investors can’t continue to wonder how much steam is left in Nvidia following its meteoric rise over the past year. Share prices have surged by more than 200% in the last 12 months and Nvidia’s market capitalization has surged above $3 trillion. Those same investors are wondering how Nvidia can possibly maintain its stranglehold over AI chips while other competitors continue to vie for market share. CEO Jensen Huang stated that Nvidia’s chips offer the “lowest total cost of ownership.”
This is obviously where AMD comes into the picture and why it’s going to make so much sense as an investment over the coming weeks. Nvidia’s performed extraordinarily well yet Continues to face the same questions that again open an opportunity for AMD as the second best AI chip.
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.
On the date of publication, the responsible editor held a long position in NVDA
