3 Stocks to Buy for the New 2024 Bull Market
These stocks to buy are excellent investments for the possible upcoming bull market
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Fundstrat’s Tom Lee is at it again. The head of research at the firm gained a lot of notoriety in 2023 for correctly calling the bull market. His contrarian view ended up being correct when most others expected a recession.
Following a strong January — a month that tends to be very predictive for markets overall — Lee now believes the S&P 500 could rise as high as 5,500 this year. The leading index currently sits at 4,900, and Lee had earlier predicted it could rise as high as 5200.
When one of 2023’s best-known bulls ups his already bullish outlook, investors should take note of these stocks to buy.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) was the dominant force in the stock market’s bull run in 2023. If 2024 is to be the same, Nvidia will again be one of the primary players. This year has begun as 2023 ended for the firm: continued gains despite worries the AI boom has been overhyped.
Nvidia has rocketed from $480 to $700 throughout January. Those investors who question whether the AI boom is overhyped should consider one simple fact as it relates to Nvidia: No other firm has monetized AI like Nvidia.
Companies of all sizes continue to scramble to secure their supply of the company’s chips. That’s only going to continue, especially because the company will release its updated chips this year.
For investors still on the fence and worry that Nvidia is overpriced, consider this: Nvidia’s P/E ratio is higher than over 85% of all other companies in the semiconductor industry. If that sounds overvalued consider that Nvidia could become one of the most important companies ever.
Microsoft (MSFT)
Investing in Microsoft (NASDAQ:MSFT) stock offers the same sort of predicament as buying Nvidia at the moment. Both stocks are trading at historically high prices, and both have gotten there due to AI’s tailwinds.
Despite high prices and a market capitalization over the three $3 trillion threshold, Microsoft is deserving of all the bullishness at the moment. Its net income increased by 33% in the most recent quarter, the highest jump since late 2021. If you’ll remember, that was the very tail end of the quantitative easing error during which free money flowed readily. Microsoft is now back at that level due primarily to its AI investment.
If Nvidia has been the champion of AI monetization, Microsoft is not far behind. It continues to introduce new AI integrations that promise to revolutionize workplace efficiency fundamentally. Microsoft’s Cloud business is a particular strength. It grew by 30% during the quarter and is a particularly important investment target for AI overall. The Magnificent Seven will continue to play an outsized role in market growth in 2024, and Microsoft will be a huge part of that.
Taiwan Semiconductor Manufacturing (TSM)
Taiwan Semiconductor Manufacturing (NYSE:TSM) recently projected a lot of confidence over its 2024 outlook. That confidence should positively affect its stock price moving forward. It was in mid-January that the world’s largest and most important Foundry projected 20% revenue growth on a strong AI demand.
Despite lagging cell phone and EV chip sales, Taiwan Semiconductor Manufacturing is very bullish about chip sales this year. The company projects a 20% increase in sales due to the continued growth of AI.
TSM is not as prominent as the other AI firms it serves. Yet, it is arguably the most important firm in the world for several reasons. Of course, it is the world’s largest foundry and provides chips for everyone from Nvidia to AMD (NASDAQ:AMD) and beyond. TSMC is also geopolitically positioned in a country that is incredibly important. It’s an easy investment to make given its recent confidence, geopolitical position and economic importance.
On the date of publication, Alex Sirois did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.