InvestorPlace – Stock Market News, Stock Tips and Trading Tips
As we end the year and look ahead to 2024, it’s instructive to consider which growth stocks are likely to outperform going forward. Third-quarter earnings season provided some clues, as several technology companies delivered impressive results and provided bullish outlooks for the coming year. Many of these technical names are not the usual suspects.
While the mega-cap tech stocks continue to lead the market higher, many smaller tech concerns are also posting impressive gains and should continue to outperform as we head into the New Year. Investors will want to take positions in these securities now so as not to miss out on further gains.
Here are seven steady growth stocks to buy before 2024.
Arm Holdings (ARM)
Source: Ascannio / Shutterstock.com
The initial public offering this September was not great. And its stock is down 5% since its market debut. But long-term investors should consider the British chipmaker’s growth potential Arm Holdings (NASDAQ:ARM). After all, this is a company whose microchips and semiconductors are found in almost every smartphone on the planet, as well as in many other electronic devices. And Arm’s first publicly released financial results were encouraging.
Arm Holdings just released its first earnings report as a publicly traded company, and the results exceeded expectations. For the third quarter that ended Sept. 30, Arm reported earnings per share of 36 cents, which matched analyst forecasts. Revenue amounted to $806 million against $744.3 million that was expected. The company’s revenue grew 28% from a year earlier. Impressively, Arm reported that it sold more than 7.1 billion microchips in the three months between July and September.
It’s still early days, however, Arm Holdings has potential and should be a long-term growth story for many years to come.
Zoom Video Communications (ZM)
Zoom Video Communications (NASDAQ:ZM) is another growth that deserves some consideration. Granted, the stock is far from its pandemic peak when the move to online work and school sent it up nearly 400%. Essentially, Zoom Video’s stock has made a comeback; today it is trading near the price of $62 at which it closed on its first day of trading back in 2019. However, the company has weathered the post-Covid-19 reopening and its financials are showing steady improvement.
Zoom Video recently reported Q3 EPS of $1.29, which was ahead of consensus forecasts for $1.08. Revenues in the quarter came in at $1.137 billion, up 3.2% from a year ago and better than analyst expectations of $1.119 billion. Zoom said its customers contributing more than $100,000 in revenue after 12 months were up 13.5% from a year earlier. Looking ahead, Zoom expects revenue of $1.125 billion to $1.13 billion, and profits of $1.13 to $1.15 per share. The perspective was before consensual views.
The company ended the quarter with $6.5 billion of cash on hand. ZM stock is down 2% for the year.
Data Dog (DDOG)
Source: Karol Ciesluk / Shutterstock.com
Datadog (NASDAQ:DDOG) is a breakout growth stock. The software company’s stock rose nearly 30% in a single trading session after its Q3 print, bringing its year-to-date gain to 54%. Since the company went public in 2019, its share price has gained 207%. It helps that Datadog’s software is used in the hot area of cloud computing. Specifically, Datadog’s cloud monitoring and security products integrate with Amazon Web Services (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), among others.
Strong demand for its cloud security software led Datadog to report Q3 EPS of 45 cents, beating expectations for 34 cents. Revenues during Q3 came in at $547.5 million, up 25% from a year earlier and beating Wall Street forecasts, which called for revenues of $524.1 million. The company also raised its full-year guidance, saying it now expects Q4 revenue of $564 million to $568 million, and full-year revenue of $2.1 billion. Both figures beat Wall Street consensus forecasts.
Palantir (PLTR)
Source: Iljanaresvara Studio / Shutterstock.com
It didn’t get much attention, but shares of a data analytics company Palantir (NYSE:PLTR) is up more than 200% this year, making it one of the best tech stocks. The company’s stock price is now 116% higher than its market debut in 2020. The company and its stock suffered a difficult decline during the 2022 bear market and subsequent “tech wreck”. But they have bounced back this year thanks to strong quarterly results and less reliance on government contracts than in the past.
Recently, PLTR stock jumped 16% higher after the company reported Q3 earnings that beat Wall Street forecasts and raised its full-year revenue guidance. Palantir reported EPS of 7 cents compared to 6 cents that analysts had expected. Revenue came in at $558 million versus $556 million forecast. The company’s sales increased 17% from a year earlier. Equally impressive was news that Palantir’s commercial (non-government) revenue grew 33% year over year.
The company raised its full-year revenue guidance to between $2.216 billion and $2.22 billion, up from previous guidance of $2.212 billion for the full year.
Netflix (NFLX)
Source: xalien / Shutterstock
Winners and losers are starting to emerge in the streaming industry, and Netflix (NASDAQ:NFLX) is clearly in the winners’ camp. The company is one of only two streaming services currently making a profit. The other creature Warner Bros. Discovery (NASDAQ:WBD). Netflix achieves continued success not only from a strong lineup of content, but also by adapting to market realities that led it to crack down on password sharing and put ads on its platform for the first time.
The steps taken to adapt its business model are paying off judging by the company’s latest financial results. For Q3, Netflix reported EPS of $3.73, which was better than the $3.49 expected. Revenue totaled $8.54 billion, matching forecasts. By far the most important number was paid subscriptions, which rose by 8.8 million net new additions in Q3 compared to Wall Street estimates of 6.1 million. Netflix said the positive quarter was due to increased subscription fees and improved profitability.
Netflix said it now expects a profit margin of 20% for this year, and 22% to 23% in 2024. The company also continues to raise its prices without losing subscribers. NFLX stock is up 61% this year.
SoFi Technologies (SOFI)
Source: Poetra.RH / Shutterstock.com
SoFi Technologies (NASDAQ:SOPHIE) is another growth stock still recovering from the decline of 2022. So far this year, SOFI shares are up 46%, including a 5% rise after the financial technology company reported better-than-expected Q3 numbers and raised his leadership. SoFi also suffered from the federal government’s moratorium on student loan repayments during the Covid-19 pandemic. However, that area of his business is also now recovering.
Due to growth in its student loan segment, SoFi reported a Q3 loss of 3 cents per share, which was less than the loss of 8 cents expected on Wall Street. Revenues in Q3 totaled $530.72 million, which was ahead of the $511 million predicted by analysts. Student loans totaled $919.3 million, which was well above a forecast of $651.5 million. Personal and home loans made by SoFi also beat expectations, and the company raised its previous guidance for the full year, impressing investors.
Meta Platforms (META)
Source: Aleem Zahid Khan / Shutterstock.com
Meta Platforms (NASDAQ:META) is firing on all cylinders, and this fact is reflected in its share price, which has risen 172%. The company has recovered strongly from a steep decline in 2022 and is questioning its strategy, which focused on building the theoretical world known as the “metaverse”. Now focused on AI, Meta has released a list of new products and strong earnings that have analysts and investors feeling bullish on the company and its stock once again.
In September, Meta unveiled the Quest 3 virtual reality headset, which will retail for $499. The company also unveiled generative AI chatbots and announced a new version of its Ray-Ban mixed reality smart glasses that can capture photos and videos with voice command. The new products impressed consumers and Wall Street traders, as did the company’s Q3 numbers. The company reported a 23% increase in its Q3 revenue, the fastest growth rate in two years, as the market for online ads rebounds.
As of the date of publication, Joel Baglole held a long position in MSFT. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines of InvestorPlace.com.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and also wrote for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
More from InvestorPlace
The post 7 Steady Growth Stocks to Buy Before 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.