Top Most Profitable Shares to Invest in This Year

Investing in the right shares can be a game-changer for your financial portfolio. As we navigate through 2024, several companies have shown remarkable performance and potential for profitability. This article highlights the top most profitable shares to invest in this year, offering insights into why these stocks are worth considering.

Key Takeaways

• NVIDIA (NVDA) has shown an impressive 74.5% performance increase in 2024, making it a top contender for investment.
• Alphabet (GOOGL) and Amazon (AMZN) have also performed well, with 16.5% and 15.2% increases respectively.
• Microsoft (MSFT) and Apple (AAPL) continue to be stable investment options with consistent growth.
• Tesla (TSLA) has experienced a decline of 26.2%, but it remains a significant player in the market.
• Other notable mentions include Rentokil Initial PLC ADR (RTO), Anheuser-Busch InBev SA/NV ADR (BUD), Yum China Holdings Inc (YUMC), and Ambev SA ADR (ABEV), all of which have shown strong market presence and potential.

NVIDIA (NVDA)

Financial Performance

NVIDIA has shown remarkable performance in 2024, with a 74.5% increase in its stock value as of April 30, 2024. This makes it one of the top-performing stocks in the S&P 500. The company's robust financial health is driven by its leadership in the graphics processing unit (GPU) market and its expanding footprint in artificial intelligence (AI) and data centers.

Market Trends

The demand for GPUs, particularly in gaming, AI, and data centers, continues to surge. NVIDIA's innovative products and strategic partnerships have positioned it well to capitalize on these growing markets. The company's recent advancements in AI technology have further solidified its market position.

Investment Perspective

Investors are optimistic about NVIDIA's future, given its strong financial performance and market trends. The company's focus on innovation and expansion into new markets makes it a compelling investment. However, potential investors should be aware of the volatility in the tech sector and the competitive landscape.

NVIDIA's impressive growth and strategic initiatives make it a standout performer in the stock market. Its focus on AI and data centers is expected to drive future growth, making it a promising investment opportunity.

Alphabet (GOOGL)

Alphabet, the parent company of Google, Google Cloud, YouTube, and other technology subsidiaries, remains a global leader in internet search and online advertising. Despite mounting competition in AI and internet search, Google stock advanced 58% in 2023. The company's forward P/E ratio stands at 20.9, with a price/sales ratio of 6.5, and a 3-year average annualized revenue growth of 17.3%.

Financial Performance

Alphabet's stock has underperformed its online advertising and artificial technology peers so far in 2024. However, analyst Justin Post is optimistic about the potential of Google's Gemini AI model, which could serve as an important catalyst for Alphabet in the coming months. Bank of America has a “buy” rating and a $173 price target for GOOGL stock.

Market Trends

The integration of AI technology into Google's search engine is expected to improve both usage and monetization metrics. Upcoming company events like Cloud Next and Google I/O are anticipated to showcase AI capabilities, potentially accelerating growth in the online media sector.

Our positive near-term view on the stock in the second quarter of 2024 stems from multiple catalysts including upcoming company events to showcase AI capabilities, potential acceleration in the online media sector, and further evidence of expense efficiencies.

Investment Insights

Investors should keep an eye on Alphabet's advancements in AI and its impact on search engine performance. The potential for further evidence of expense efficiencies and the relaunch of the Gemini image could positively influence market sentiment. Given these factors, Alphabet remains a strong contender for profitable investment this year.

Amazon (AMZN)

Amazon (AMZN) has shown a remarkable performance in 2024, with a 15.2% increase in its stock value as of April 30, 2024. This growth is driven by several factors, including its robust e-commerce platform and expanding cloud services through Amazon Web Services (AWS).

Financial Performance

Earnings for Amazon have been improving dramatically, with an average growth of 162% over the past three quarters. This is significantly higher than the 25% growth benchmark sought by Investor's Business Daily. Such impressive earnings growth highlights Amazon's strong market position and operational efficiency.

Market Trends

Amazon continues to be a key sales platform for various brands, including Celsius, which saw a boost when PepsiCo invested $550 million for an estimated 8.5% ownership stake. This long-term distribution deal underscores Amazon's influence in the market.

Investment Insights

• Earnings Growth: With earnings growing at an exceptional rate, Amazon presents a lucrative investment opportunity.
• Market Position: Amazon's dominance in e-commerce and cloud services makes it a stable choice for investors.
• Strategic Partnerships: Collaborations with major companies like PepsiCo enhance its market reach and profitability.

Given its strong financial performance and strategic market position, Amazon (AMZN) is a compelling option for investors looking to capitalize on growth in the tech and e-commerce sectors.

Microsoft (MSFT)

Microsoft has consistently demonstrated robust financial performance, making it a top contender for investors. Shares in Microsoft (NASDAQ: MSFT) have popped 35% since May 2023, rallying investors with consistent growth across its business and an expanding position in the market.

Financial Performance

Microsoft's financial strength is evident from its strong balance sheet, growing revenue, and high margins. The company is currently 6% undervalued relative to a $435 fair value estimate, which was increased from $420 per share due to stronger near-term growth and profitability. In fiscal 2023, Microsoft grew at an impressive 30% rate, making it an approximately $58 billion business.

Market Position

Microsoft is one of two public cloud providers capable of delivering a wide variety of platform-as-a-service and infrastructure-as-a-service solutions at scale. The company's investment in OpenAI has also positioned it as a leader in artificial intelligence. Azure, Microsoft's cloud platform, is considered the centerpiece of the new Microsoft.

Investment Considerations

• Price/Fair Value: 0.94
• Morningstar Uncertainty Rating: Medium
• Morningstar Style Box: Large Growth
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Software—Infrastructure

Microsoft's exemplary capital allocation and strategic investments in AI and cloud services make it a compelling choice for investors looking for growth and stability.

Conclusion

Given its strong financial performance, strategic market position, and growth potential, Microsoft remains a highly attractive investment. Investors should consider adding MSFT to their portfolios to capitalize on its continued success and market leadership.

Apple (AAPL)

Financial Performance

Apple Inc. has been a cornerstone in the tech industry, known for its innovative products and strong market presence. However, as of April 30, 2024, Apple’s stock has seen a decline of 11.5% in performance. This dip can be attributed to various market dynamics and competitive pressures.

Market Trends

Despite the recent downturn, Apple remains one of the top North America stocks worth investing in today. The company continues to innovate, with new product launches and advancements in technology. Investors should keep an eye on upcoming events and product releases that could potentially boost the stock price.

Investment Perspective

For long-term investors, Apple offers a balanced mix of growth and stability. The company’s strong brand loyalty and diversified product portfolio make it a resilient choice in the tech sector. It is advisable to monitor the stock closely and consider buying during dips for potential long-term gains.

Apple and NVIDIA are highlighted as top investment options in the tech industry, with strong growth prospects and market influence.

Actionable Insights

1. Monitor Earnings Reports: Keep track of Apple’s quarterly earnings reports to gauge financial health and performance.
2. Watch for Product Launches: New product announcements can significantly impact stock prices.
3. Consider Market Conditions: Evaluate broader market trends and economic indicators before making investment decisions.

In conclusion, while Apple’s recent performance has been less than stellar, its long-term prospects remain promising. Investors should stay informed and consider strategic entry points to maximize returns.

Tesla (TSLA)

Tesla, Inc. (TSLA) has been a focal point for investors due to its innovative approach to electric vehicles and renewable energy solutions. Despite a 26.2% decline in stock performance in 2024, the company continues to attract attention with its ambitious projects and market strategies.

Financial Performance

Tesla's financial performance has been a mixed bag. The company's revenue growth remains strong, but profitability has been under pressure. Recent metrics indicate that Tesla's cheaper models excite investors, but profits fall. This has led to a revised fair value estimate of $200 per share, up from $195.

Market Trends

The electric vehicle market is expanding rapidly, and Tesla is at the forefront. However, competition is intensifying with new entrants and established automakers ramping up their EV offerings. Tesla's ability to maintain its market share will be crucial in the coming years.

Investment Perspective

Investors should weigh the potential for high returns against the risks associated with Tesla's volatile stock performance. The company's innovative edge and market leadership are strong positives, but the financial instability and CEO Elon Musk's record of overpromising are significant concerns.

In summary, Tesla remains a high-risk, high-reward investment. Investors should stay informed about market trends and company developments to make well-rounded decisions.

Rentokil Initial PLC ADR (RTO)

Rentokil Initial has firmly established itself as a leader in the pest-control and hygiene-service markets. The company's strategy is sharply focused on attaining and maintaining market share leadership in these highly localized sectors. Rentokil Initial has completed over 200 acquisitions since 2015, significantly enhancing its geographic density and customer base.

Financial Performance

Rentokil Initial's stock trades at a 33% discount to our fair value estimate of $39.50 per share. The company's Price/Fair Value ratio stands at 0.67, indicating it is currently undervalued. The Morningstar Uncertainty Rating for Rentokil is Medium, while its Capital Allocation Rating is Exemplary.

Strategic Acquisitions

The late 2022 acquisition of Terminix Global Holdings was a transformative deal, reinforcing Rentokil's market position and creating a new US market share leader. Pest-control targets remain the company's top mergers-and-acquisitions priority, but it is also focusing on tuck-in candidates for the hygiene segment.

Market Trends

Rentokil's successful execution of its strategy has delivered a durable cost advantage for its pest-control business, which is the source of its wide economic moat rating. The firm’s focus on understanding how stocks and shares issues impact the financial market has been pivotal in its growth.

Rentokil Initial's strategic focus and successful acquisitions make it a compelling investment opportunity in the specialty business services industry.

Investment Insights

Investors should consider Rentokil Initial for its strong market position, strategic acquisitions, and undervalued stock price. The company's focus on both pest-control and hygiene services provides a balanced investment perspective, making it one of the top picks for profitable shares this year.

Anheuser-Busch InBev SA/NV ADR (BUD)

Financial Performance

Anheuser-Busch InBev (AB InBev) has demonstrated robust financial performance, with a Price/Fair Value ratio of 0.67. This indicates that the stock is currently undervalued, presenting a potential opportunity for investors. The company's Exemplary Capital Allocation Rating further underscores its efficient use of capital to generate shareholder value.

Market Position

AB InBev has built a vast global scale and regional density through strategic acquisitions, including Grupo Modelo and SABMiller. The company's top 20 brands each generate more than $1 billion per year in sales, highlighting its strong market position. Its monopolylike positions in Latin America and Africa provide significant fixed-cost leverage and procurement pricing power.

Investment Potential

Given its current undervaluation and strong market position, there is considerable upside potential for patient investors. AB InBev's extensive distribution network and cost-squeezing strategies make it a compelling investment option in the beverages industry.

AB InBev's worldwide scale and distribution network offer a unique advantage, making it a standout player in the global beverages market.

Conclusion

For investors looking for a high-quality, undervalued stock in the beverages industry, Anheuser-Busch InBev presents a promising opportunity. Its strong financial metrics, strategic market position, and efficient capital allocation make it a top contender for profitable investment this year.

Yum China Holdings Inc (YUMC)

Financial Performance and Market Position

Yum China Holdings Inc (YUMC) is currently 50% undervalued relative to its fair value estimate of $80 per share. This undervaluation places it at the top of the list of best stocks to buy this month. The company's earnings per share have been growing very quickly, and it is paying out a relatively low percentage of its profit and cash flow. This financial prudence, coupled with strong brand recognition and an unrivaled supply chain, positions Yum China as a prime beneficiary of growing Chinese fast-food spending.

Growth Opportunities

Yum China has significant opportunities for restaurant expansion in China's growing fast-food industry. The company is set to benefit from several long-term secular trends, including longer working hours for urban consumers, rapidly rising disposable income, and ever-smaller family sizes. These factors underpin the rising fast-food penetration in the fragmented USD 700 billion Chinese restaurant market.

Strategic Investments

The company's ongoing digital investments and operating leverage are expected to drive margin improvement over the longer term. Yum China's strategic focus on digital transformation and efficiency gains will likely enhance its competitive edge in the market.

Yum China’s stock is a compelling investment due to its undervaluation and strong growth prospects in the Chinese fast-food market.

Conclusion

Investors should consider Yum China Holdings Inc (YUMC) as a valuable addition to their portfolios. The company's robust financial performance, growth opportunities, and strategic investments make it a promising choice for those looking to capitalize on the expanding Chinese fast-food industry.

Ambev SA ADR (ABEV)

Overview

Ambev SA ADR (ABEV) is the largest brewer in Latin America and the Caribbean, operating as a subsidiary of Anheuser-Busch InBev. The company produces, distributes, and sells beer and PepsiCo products in Brazil and other Latin American countries. It also owns Argentina’s largest brewer, Quinsa. Ambev stock trades 34% below our fair value estimate of $3.60 per share.

Financial Performance

Ambev has a Price/Fair Value ratio of 0.66, indicating that the stock is currently undervalued. The company has a Morningstar Uncertainty Rating of Medium and a Capital Allocation Rating of Exemplary. In 2022, Ambev faced around BRL 3 billion in higher raw material costs, but a reversal of this trend by the end of 2024 could significantly boost profitability.

Market Position

Ambev benefits from AB InBev’s vast global scale and distribution network. The company holds monopolylike positions in Latin America and Africa, providing significant fixed-cost leverage and procurement pricing power. This strong market position contributes to its high profitability and potential for long-term growth.

Ambev's strategic positioning and robust financial metrics make it a compelling option for patient investors looking for value in the beverage industry.

Investment Insights

• Undervalued Stock: Trading 34% below fair value estimate.
• Strong Market Position: Monopoly-like positions in key regions.
• Potential for Profitability: Expected reversal of raw material cost increases by end of 2024.

Investors should consider Ambev's strong market position and potential for profitability when evaluating its stock for long-term investment.

Discover the latest insights and updates on Ambev SA ADR (ABEV) by visiting our website. Stay informed about market trends and make informed investment decisions. Don't miss out on the opportunity to enhance your portfolio.

Conclusion

In conclusion, investing in the stock market requires careful analysis and a strategic approach. The stocks highlighted in this article represent some of the most profitable opportunities available this year, spanning various sectors and industries. While past performance can provide valuable insights, it is crucial for investors to conduct their own research and consider their individual financial goals and risk tolerance. By staying informed and making well-considered decisions, investors can position themselves to capitalize on the potential growth and profitability of these top-performing shares. Remember, the key to successful investing lies in continuous learning and adapting to market dynamics.

Frequently Asked Questions

What are the best-performing stocks of 2024?

The best-performing stocks of 2024 include companies like NVIDIA (NVDA), Alphabet (GOOGL), and Amazon (AMZN), among others.

Why should I invest in NVIDIA (NVDA)?

NVIDIA has shown significant growth with a 74.5% increase in 2024, making it one of the top-performing stocks this year.

Is it a good time to invest in the stock market?

While recent performances have been strong, it's crucial to analyze each company and its potential for future growth before investing.

What factors should I consider before investing in stocks?

Investors should consider the company's industry, competitive situation, and financial statements such as balance sheets and income statements.

Are these stocks likely to perform well in the future?

Past performance does not guarantee future results. It's essential to conduct thorough research and consider market conditions before investing.

How can I stay updated on stock news and performance?

You can sign up for stock news newsletters and follow financial news websites to stay informed about the latest market trends and stock performances.