Q4 Stock Predictions: 3 Stocks Ready to Roar Into 2024
After a miserable 2022, the stock market recovered in 2023 and surprised many investors. Artificial intelligence stocks grabbed the spotlight as investors dreamed of the possibilities. This technology is still in its infancy and can create new possibilities for society.
When trends like artificial intelligence take hold, they give investors opportunities to generate outsized returns. However, being in the right place at the right time isn’t the only reason some stocks outperform their peers.
Other stocks get ignored or stuck with low valuations relative to their potential and the valuations of fellow peers. These outliers give investors a greater margin of safety and can soar to new heights once they receive more attention.
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Savvy investors continue to look for stock picks even if they are content with their portfolios. Exposing yourself to more investment opportunities can help you adjust your portfolio or feel more confident in your current setup. Investors looking for stocks ready to generate gains in 2024 may want to consider these three picks.
Nvidia (NVDA)
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Nvidia (NASDAQ:NVDA) is an artificial intelligence juggernaut that has reported exceptional earnings over the past few quarters. The stock was a winner long before artificial intelligence but has gained momentum in recent months.
The company’s 101% year-over-year revenue growth and 843% year-over-year net income growth have silenced many criticisms surrounding its valuation. Shares currently trade at a 28-forward P/E ratio and a PEG ratio below one.
Nvidia has partnered with many corporations to fuel its artificial intelligence initiatives. Nvidia is also a leader on the AI chip front and is estimated to have 70% of the market share. Nvidia’s A100 chip is also outperforming competitors like AMD (NASDAQ:AMD).
Artificial intelligence is only in its early stages, and growth in this industry will translate into stronger financials for Nvidia. The company’s low forward P/E ratio is based on high growth rates staying strong, and the company’s guidance suggests it can maintain substantial growth rates for the next few quarters. That’s enough time for Nvidia to command an attractive valuation for long-term investors.
Inmode (INMD)
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Inmode (NASDAQ:INMD) is an Israeli company that provides innovative medical technologies for various procedures. The company’s technology is used for plastic surgery, gynecology, dermatology, otolaryngology, and ophthalmology.
Inmode has zero debt, growing revenue and earnings, and net profit margins that often hover between 35% and 45%. In the second quarter, Inmode reported 20% year-over-year revenue growth and 26.5% year-over-year net income growth.
The company’s full-year revenue guidance is between $530 million to $540 million. That’s compared to last year’s $454.3 million in total revenue. The midpoint for 2023 full-year guidance represents a 17.8% year-over-year growth rate.
Despite those solid numbers, shares have dropped by roughly 20% year-to-date, with most of those declines taking place from mid-July to today. A high valuation can undo the gains of any stock, especially during periods of bearishness and volatility. However, Inmode offers investors a pristine 9 forward P/E ratio. The PEG ratio is currently below one. It has been a long time since Inmode traded at its current valuation. The pullback may present a solid long-term buying opportunity for investors.
Exxon Mobil (XOM)
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Exxon Mobil (NYSE:XOM) is a reliable inflation hedge due to the company’s focus on oil. Exxon Mobil isn’t going anywhere, and the company offers investors a P/E ratio under 10. Revenue is expected to pick up in the third quarter as inflation causes oil prices to rise.
The company offers a reliable dividend and strong financials regardless of whether inflation becomes hot again or if it fades off into the sunset. There is speculation that the Fed may lower interest rates in 2024. This development would lead to increased consumer spending and inflation which would help the oil giant.
Exxon Mobil is a resilient stock that can outperform tech stocks during economic slowdowns. Shares almost doubled in 2022, while many high-growth stocks faltered. The contrarian pick has only gained 5% year-to-date but has the potential to rally in 2024.
Investors can accumulate shares in anticipation of the rally and collect dividend payments while they wait. A recent pullback makes shares more enticing.
On this date of publication, Marc Guberti held long positions in NVDA and INMD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.
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