5 Large-Cap Growth Stocks to Buy for Q4 2023
Wall Street started October with a volatile trading pattern like the last two months. The Fed kept the benchmark lending rate unchanged at the existing 5.25-5.5% range at its September FOMC meeting. Market participants were widely expecting a status quo. However, the post-FOMC statement of Fed Chairman Jerome Powell created uncertainty among investors.
Although the Fed paused its rate hike in the September FOMC meeting, the current dot-plot has shown a strong likelihood of one more hike of 25 basis points in 2023. That will take the terminal interest rate of this hiking cycle to 5.6%, well above the 5.1% forecast in June. Notably, the current range of the Fed fund rate is the highest level since March 2001.
More importantly, the central bank said it would keep interest rates higher for a longer time. The new projection has shown two rate cuts in 2024 instead of four projected in June. The first cut in interest rate is not expected before September 2024.
However, defying these negatives, we have identified a handful of large-cap (market capital > $10 billion) companies that have strong growth potential for the rest of 2023. Investment in these stocks should be prudent going forward.
Our Top Picks
We have narrowed our search to five growth stocks that have solid upside left for the rest of 2023. These stocks have witnessed positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Growth Score A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Amazon.com Inc. AMZN has been benefiting from a strengthening AWS services portfolio and its growing adoption rate has contributed well. Ultrafast delivery services and an expanding content portfolio are positives for AMZN. The strengthening relationship with third-party sellers is also encouraging. Its advertising business is also making a robust contribution. Improving Alexa skills along with robust smart home product offerings are tailwinds for AMZN.
Amazon has an expected revenue and earnings growth rate of 11.1% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 43.9% over the last 60 days.
NVIDIA Corp. NVDA is gaining from strong growth of artificial intelligence, high-performance computing and accelerated computing, which is boosting its Compute & Networking revenues. The datacenter end-market business is likely to benefit from the growing demand for generative AI and large language models using GPUs based on NVIDIA Hopper and Ampere architectures.
A surge in Hyperscale demand and a solid uptake of AI-based smart cockpit infotainment solutions are acting as tailwinds for NVDA. Collaboration with Mercedes-Benz and Audi is likely to advance NVDA’s presence in autonomous vehicles and other automotive electronics space.
NVIDIA has an expected revenue and earnings growth rate of more than 100% each for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 30 days.
Live Nation Entertainment Inc. LYV is benefiting from pent-up demand for live events, robust ticket sales and the sponsorship and advertising business. LYV remains optimistic about its growth prospects in 2023.
For concerts, LYV stated that it has already sold more than 117million tickets (as of June 2023), up 20% from the 2022 levels. In terms of tickets, LYV is likely to benefit from the market pricing trend. Also, the emphasis on new client and venue additions bodes well.
Live Nation Entertainment has an expected revenue and earnings growth rate of 21.3% and 57.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 16.1% over the last 60 days.
Uber Technologies Inc.’s UBER Delivery business benefits from rising online order volumes. UBER’s efforts to expand its delivery operations through successive acquisitions are encouraging. Continued recovery in Mobility operations is aiding the company. UBER’s efforts to expand its presence across the globe are impressive.
Uber Technologies has an expected revenue and earnings growth rate of 17.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.4% over the last 30 days.
AppLovin Corp. APP is engaged in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. APP provides technology platform which enables developers to market, monetize, analyze and publish their apps.
AppLovin has an expected revenue and earnings growth rate of 9.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last 30 days.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Live Nation Entertainment, Inc. (LYV) : Free Stock Analysis Report
AppLovin Corporation (APP) : Free Stock Analysis Report
Uber Technologies, Inc. (UBER) : Free Stock Analysis Report
