The markets have soared in the last six months, with a handful of hot stocks leading the charge. Equity benchmarks like the S&P 500 are charting new territories fueled by macroeconomic factors. In the first six months of the year, the index is up by an impressive 17.50%, recording new all-time highs 34 times this year.
Looking at the statistics, it is tempting to assume that this momentum will lead the market to a strong finish this year. But if we’re being honest, there are two ways this can play out. The bullish view is that companies continue to experience unprecedented gains in the latter half of the year. The bearish take is that we’re in a bubble and headed for a market correction.
However, one factor remains a certainty regardless of how this unfolds. Fundamentally strong companies will remain good long-term plays despite market conditions. That is, stocks are well-positioned to weather the ups and downs of the financial market.
On this premise, I’ve rounded up three hot stocks that are good buys today and show significant long-term growth prospects.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is among the hot stocks on the market right now, with shares up 161% this year. Given its strong run, one could argue that NVDA is overvalued and headed for a correction. While this is a possibility, the company gives investors plenty of reasons to remain optimistic about its long-term performance.
One particular tailwind that sticks out is the pace of its chip development. During a recent conference, Nvidia’s leather-clad CEO, Jensen Huang, stated that chip production is on a “one-year rhythm.” Put simply, the company will now launch AI chips once a year and not once every two years. That’s an impressive feat, given that Nvidia’s chips are incredibly advanced and offer diverse utility.
The financials reflect its growth potential. In the last quarter, Nvidia reported $26 billion in revenue, up 262% from a year ago. It anticipates a 2% increase in the next quarter. Given its impressive performance, NVDA stock is trading at a premium, but its growth potential makes it a worthy investment.
Spotify (SPOT)
Spotify (NYSE:SPOT) is another stock with massive upside potential. Shares of the company are experiencing a strong run this year, with SPOT stock up 99.3% in the last twelve months. While the gains are impressive, Spotify is poised for higher gains as it explores additional revenue streams to improve profitability.
After a stellar Q1 that saw subscribers grow by 14%, the company dubbed 2024 “the year of monetization.” This monetization will be fueled by several enhancements across the platform to provide users with more value for their money. In its efforts to action these changes, Spotify announced a price hike in its core and premium subscription plans.
In the upcoming quarter, the company hopes to add 16 million new monthly users (MAU) and anticipates a 28.1% improvement in gross margin. Combining operational efficiencies, pricing strategies and expansion into additional revenue streams will help drive this growth.
In short, SPOT stock is at the top of its game now, but several signs point to even greater growth. Hot stocks like this one are ideal for investors seeking long-term plays.
Mastercard (MA)
The shift to a cashless society and the rise in consumer spending have been boons for Mastercard (NYSE:MA). The company offers electronic and contactless payment methods services to several parties, including financial institutions, businesses, governments and private account holders. With its stock up 13.8% in the last 12 months, Mastercard aims to enhance its offerings to sustain its growth.
The company’s financials reflect its success story. In the last quarter, net revenue rose by 10% year-over-year (YoY) to $6.3 billion. Cross-border volume growth was up by 18% due to strong consumer spending and deal wins across all regions. The performance underscores Mastercard’s strong market position and ability to adapt to an evolving payment landscape.
Looking ahead, Mastercard CFO Sachin Mehra outlined several growth opportunities that it plans to capitalize on. This includes adding value to its international and domestic money-moving capabilities with Mastercard Move, which will increase the efficiency of its transactions. It also focuses strongly on supporting the customer beyond the transaction while leaning into the digital payment trend. These tailwinds will help Mastercard capture a higher market share as it competes with Visa (NYSE:V) for more customers.
Trading slightly below its all-time high of $490, MA is one of the hot stocks on the market right now. With several growth opportunities in the pipeline, investors can look forward to outsized gains from this payment company.
On the date of publication, Divya Premkumar 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 did not have (either directly or indirectly) any positions in the securities mentioned in this article.
