2024 is shaping up to be a huge year for this group.
Sometimes, the market gives investors once-in-a-lifetime buying opportunities. While there aren't as many of those available right now due to the market nearing all-time highs, there are a few stocks I see myself going "all in" on in 2024.
So, what are these stocks? Read on to find out.
1. Amazon
Amazon (AMZN -0.77%) is a stock I'm excited about in 2024. While the third quarter was a high note for many of Amazon's business segments, its Amazon Web Services cloud computing business reported a ho-hum quarter. However, management noted that some of the headwinds are beginning to die down while new workloads are coming online.
Couple that tailwind with Amazon's margin profile, and you've got a recipe for a stock that could have a phenomenal 2024. In Q3, nearly all of Amazon's profit measures approached all-time highs. Furthermore, they did it without secular tailwinds (like COVID-19 lockdowns).
AMZN Gross Profit Margin (Quarterly) data by YCharts
With Amazon set to have a full year of high profits and a rebounding business segment, I'm confident in significantly increasing my position size.
2. Alphabet
Like Amazon, Alphabet (GOOG 0.24%) (GOOGL 0.18%) is big tech company that dealt with some headwinds throughout 2023. The advertising market (making up nearly 80% of Alphabet's revenue) was soft in late 2022 and early 2023, as many advertisers cut their budgets to prepare for a recession.
Now that the economic outlook has improved and Alphabet has lapped those year-over-year comparisons, it's starting to show solid growth. In Q2, Alphabet's revenue rose 11% year over year, helping its earnings per share improve from $1.06 to $1.55.
This will boost Alphabet's stock throughout 2024, but it also has another tailwind: artificial intelligence. AI is a huge investment for Alphabet, and with the launch of its latest Gemini generative AI model beating the competition on many benchmark tests, it could be a new revenue driver for the company.
Alphabet's 2024 should be solid, and investors would be wise to establish a position before it takes off.
3. UiPath
UiPath (PATH -0.52%) is slightly more obscure than the previous two stocks. It's focused on robotic process automation (RPA) software, which helps automate repetitive tasks within a business. UiPath is also a big AI user, as it utilizes AI to increase the tasks it can automate as well as analyze what activities employees are doing to see what could be automated.
The RPA opportunity is massive, with Polaris Market Research projecting a $66 billion market by 2032. Compared to the $2.6 billion market Polaris estimated in 2022, this software sector has a lot of growth ahead.
UiPath is already a major player, with its annual recurring revenue sitting at $1.38 billion (up 24% year over year).
With UiPath growing quickly in an important market, it is a top stock pick for 2024.
4. DLocal
DLocal (DLO -0.41%) gives its clients the ability to sell to emerging market countries like Egypt, Turkey, and India. Instead of a large client (like Amazon, Shopify, or Nike) developing its own solution for these countries (which often have vastly different online payment options than in the U.S.), it can work with DLocal, which has already done the legwork to create these payment avenues.
By conceding a bit of revenue to DLocal, clients increase their market opportunity drastically and capture many important customer bases.
Unsurprisingly, DLocal is growing quickly, with revenue rising 47% year over year to $164 million. However, what may come as a surprise is its profitability levels. In Q3, DLocal posted a $40.4 million profit, up 25% year over year. This is good enough for a 25% profit margin, a level few companies attain.
With DLocal recently trading for just 23 times 2023 earnings, it's great to load up before other investors discover it.
These are the stocks I'm planning on going "all in" on in 2024. While that doesn't mean I will sell all of the other stocks in my portfolio to fund these investments, it does mean I will channel a significant portion of my contributions to these stocks. However, I won't weight more than 10% of my portfolio to any of these companies, as anything more than that may cause me to become too worried about the position.
This figure may be smaller or larger for you, but I'm confident that a position in these four will be a solid investment for 2024.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet, Amazon, DLocal, Shopify, and UiPath. The Motley Fool has positions in and recommends Alphabet, Amazon, Nike, Shopify, and UiPath. The Motley Fool recommends the following options: long January 2025 $47.50 calls on Nike. The Motley Fool has a disclosure policy.
