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2 Super Growth Stocks to Buy in Bunches in March

With the S&P 500 index up roughly 6% year to date, stocks have gotten off to a strong start in 2024. Investors are being rewarded for putting their money behind top growth stocks, and it looks like the trend could continue in the remainder of this year and beyond.

With that in mind, read on to see why two Motley Fool contributors believe that you should be loading up on Nvidia (NASDAQ: NVDA) and Netflix (NASDAQ: NFLX) this March.

Nvidia's incredible run probably isn't over

Keith Noonan (Nvidia): One of the market's hottest stocks is Nvidia, and the artificial intelligence (AI) leader's share price has surged 60% across roughly two months of trading in 2024. Over the last year, the stock is up 240%.

With that kind of incredible performance, it's not unreasonable to wonder whether the company's valuation has been pushed into bubble territory. While these strong gains for the stock could open the door for some valuation volatility, there are actually good reasons to think that Nvidia is still in the relatively early stages of a massive long-term bull run.

In the fourth quarter, it recorded adjusted earnings per share (EPS) of $5.16 on sales of $22.1 billion. The company's data center segment was once again the standout, with surging demand for advanced graphics processing units (GPUs) capable of powering AI applications helping push sales up 409% year over year. With $18.4 billion in sales, the data center segment accounted for roughly 83% of overall revenue.

Nvidia's largest business segment is also by far its fastest growing -- a dynamic that helps set the stage for fantastic growth overall. Last quarter, the GPU leader's sales soared 265% year over year, and its adjusted EPS jumped 486%. The incredible growth looks poised to continue.

For this year's first quarter, Nvidia expects to post sales of roughly $24 billion -- good for growth of roughly 234% year over year. Notably, the AI leader has actually been quite conservative with its guidance lately, and overall demand trends continue to look highly favorable. It wouldn't be surprising to see Nvidia significantly exceed its first-quarter sales target.

Crucially, the pieces appear to be in place for incredible wins to keep piling up over the long haul. While the rise of AI is already having world-shaking implications, the technology is still in a relatively nascent state. We're still just starting to see what's possible with the tech, and Nvidia's hardware is going to play a central role in AI's next stages.

Even better, the company is also making big pushes in AI software and computing as a service -- categories that are likely to create high-margin recurring revenue streams.

For long-term investors looking to profit from the rise of AI, Nvidia stock is still a top buy.

Netflix has proved it's a content juggernaut

Parkev Tatevosian (Netflix): In the last several years, Netflix has demonstrated a lot. For one, it fended off fierce competition from legacy content companies jumping into the streaming industry.

And it has proved it can create content that hundreds of millions of folks are willing to pay premium prices for. Lastly, it has done all of this while growing profitability.

Lockdowns imposed by governments in response to the outbreak of COVID helped to launch streaming services, with people spending more time at home. Existing streaming services doubled down, adding more premium content, with increased advertising to support the services. Despite that onslaught, Netflix remains the top streaming content provider when measured by subscribers.

Moreover, as competitors dived into the industry, they held back content they were previously willing to license to Netflix. That was a challenge it overcame. Stranger Things, Squid Game, Bridgerton, and more are some of the most popular shows on video streaming, and they were all created by Netflix.

This capability to create hit content could pay dividends for decades. Most impressively, Netflix achieved all this while maintaining -- and even growing -- profitability. Its operating income jumped from $2.6 billion in 2019 to $6.9 billion in 2023.

NFLX PE Ratio (Forward 1y) Chart
NFLX PE Ratio (Forward 1y) Chart

As of this writing, the stock is trading at a forward price-to-earnings (P/E) ratio of 27. That is lower than where it was in 2021, when its dominance over the streaming industry's latest entrants was less evident.

For those reasons, investors can buy Netflix stock in bunches in March before the market realizes what a powerhouse the streaming pioneer has become.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 26, 2024

Keith Noonan has no position in any of the stocks mentioned. Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Nvidia. The Motley Fool has a disclosure policy.

2 Super Growth Stocks to Buy in Bunches in March was originally published by The Motley Fool

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