GameStop (NYSE:GME) must be getting desperate because it is employing a bold new strategy. Specifically, the company has opted to allow CEO Ryan Cohen to use its cash to purchase equities. Indeed, the man known as the meme stock king can now make investments with company cash, being able to direct some $900 million into his personal picks for the best stocks to buy.
GameStop delivered this update in its recent third-quarter earnings report, which revealed both a troubling revenue miss and declining global sales. As Quartz reports:
“In an otherwise uneventful earnings release on Dec. 6—it posted a loss of about $3 million for the quarter on revenue of just over $1 billion—GameStop revealed that its board had approved a new ‘investment policy’ this week ‘that permits the Company to invest in equity securities, among other investments.’ The company didn’t explain the move further, as it declined to hold an earnings call where analysts typically ask questions about public firms’ financial disclosures.”
When we take a step back and look at the bigger picture, things don’t look great for GameStop. But if Cohen can make the right stock picks, there’s still a chance this move could help the unstable meme stock recover in 2024.
Of course, given his history regarding his infamous Bed Bath & Beyond sale, it may be hard for some investors to have faith in Cohen’s abilities. Further, while retail investors may push for Cohen to invest in fellow meme stocks like AMC Entertainment (NYSE:AMC), to do so would be a drastic mistake. The best stocks to buy to save GameStop are companies with actual growth potential that are poised to benefit from the dominant trends of the new year.
Which stocks should Cohen buy for GameStop? Let’s take a closer look.
Stocks to Buy: Arm Holdings (ARM)
The semiconductor sector is changing, but some companies in the space can still ride to new heights in 2024. InvestorPlace’s Luke Lango sees Arm Holdings (NASDAQ:ARM) as a likely winner of the next phase of the artificial intelligence (AI) boom — and for good reason. The U.K.-based company is known as a chipmaker, but its practice of licensing core products to tech sector titans puts it in an excellent position to soar in the coming year. Arm’s client list includes Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) and is likely to keep growing as AI enthusiasm sparks demand.
Arm only went public a few months ago. As such, it still trades at relatively low levels despite performing well since its initial public offering (IPO). This means that new investors still have the potential to enjoy a healthy profit as the AI boom progresses.
Snowflake (SNOW)
Owning shares of Snowflake (NYSE:SNOW) stock is a great way to gain exposure to multiple booming sectors. This type of strategy can help safeguard your portfolio against unfavorable market conditions.
Snowflake operates in the cloud computing and data analytics spaces. However, it can also be a tempting play for investors seeking both machine learning and virtual reality-related stocks. Basically, if there is a profitable area of the tech sector, Snowflake is probably exposed to it in some way. This has led to an impressive performance in 2023.
Looking forward, InvestorPlace contributor Michael Que also notes the following about Snowflake:
“By 2025, the AI market globally will reach a whopping $190.61 billion, compounding at an annual growth rate of 36.62%. As a result, SNOW will benefit from this surge in technologies. At the end of Q2 2023, more than 30% of companies in the Global 2000 used SNOW as part of their business. Snowflake added more than 1,800 new customers YOY and revenue grew 83%.”
With such positive market projections, it’s hard not to be optimistic about Snowflake’s chances for growth in 2024. Plus, the company is likely to make a splash in the area of cloud-based data warehousing for firms in the AI space. Of course, SNOW stock does trade at fairly high levels today. But it still earns a place among the best stocks to buy to profit in 2024 and beyond.
Stocks to Buy: Palantir (PLTR)
Palantir (NYSE:PLTR) is truly a rare company that every investor should be watching. Indeed, the firm has garnered a reputation as a favorite among retail investors. However, unlike GameStop and AMC, PLTR stock has actual growth potential — in fact, quite a bit.
This company has a demonstrated history of procuring lucrative contracts from the U.S. government and military, but its commercial client count is steadily increasing as well. This year has also seen shares rise more than 170% year-to-date (YTD) as AI enthusiasm has taken PLTR to new heights. Yet, even after that, PLTR stock still trades at less than $18 per share, a fairly attractive point of entry given the firm’s potential.
Indeed, some notable experts have already recognized the power and potential of Palantir. Among them is Cathie Wood of Ark Invest, who has made multiple bets on shares recently. Wood’s strategy typically consists of buying beaten-down tech stocks. So, if she’s doubling down on a company that has seen 100%-plus growth YTD, she clearly sees some strong potential.
All told, Palantir is well-positioned to continue rising in 2024 — and to generate strong profits for the investors who buy in now.
On the date of publication, Samuel O’Brient 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.
