Goldman Sachs raised the year-end target of the S&P 500 index to 5,600 points by adding some stocks to its Conviction List: here are 7 stocks with an upside potential of more than 40%.
Wall Street analysts are closely monitoring these 7 stocks for the second half of 2024. After the impressive rally of the S&P 500 Index fueled by Nvidia and other artificial intelligence stocks, Goldman Sachs, Citi and other investment firms have revised upwards their price target for the benchmark index at the end of the year, setting it at 5,600 points.
According to analysts, some of these stocks could outperform in the second half of the year, with a potential upside of 40% or more from current target prices, and are already on the rise into 2024.
1. Super Micro Computer
- Super Micro Computer daily graph
- Source: Tradingview
Super Micro Computer (SMCI) is among the stocks under the scrutiny of analysts, particularly appreciated for its innovative solutions in the field of servers and cloud infrastructures. In 2024, the stock has seen a significant increase thanks to the growing demand for cloud services and data centers. Supermicro shares are currently trading at 4.3 times sales, lower than the U.S. technology sector average of 7.8, suggesting the stock is undervalued.
One of the main reasons Supermicro’s price to sales is attractive is the company’s exceptional revenue growth. Analysts see further growth potential in the second half of the year, with a price target of $1,070, suggesting a 17% upside. Super Micro Computer solutions are particularly in demand amid the increased adoption of AI and big data technologies, which require high-performance servers. The company reported 20% year-on-year revenue growth in H1 2024, supported by a diversified product portfolio and strategic partnerships with large technology players.
- Super Micro Computer EPS growth
- Source: TheMotleyFool
Supermicro’s revenues and earnings grew 37% and 115%, respectively, in fiscal 2023. Analysts expect revenues and earnings to grow another 110% and 102%, respectively, in fiscal 2024, rates of explosive growth for a stock that trades at just 24 times forward earnings. Supermicro’s growth may slow as the supply of AI servers on the market catches up with demand, but it still has room to grow. It currently generates more than half of its revenue from its dedicated AI servers, and Bank of America expects its global share of AI servers to increase from 10% to 17% over the next three years as the market expands by about 150%.
2. Amazon
- Amazon daily graph
- Source: Tradingview
Amazon (AMZN) continues to be a top stock for investors, thanks to its dominance in e-commerce and its investments in artificial intelligence and cloud computing. After a positive start to the year, with shares up 22%, analysts expect a further increase of more than 30% in the second half of 2024.
Amazon recently expanded its AI capabilities with the launch of new AWS (Amazon Web Services) services, which have met robust demand. Furthermore, the continued development of the distribution network and expansion in the logistics sector provide further catalysts for growth. Investors are particularly optimistic about advances in automation and delivery technologies, which could further improve the company’s operating margins.
3. Berkshire Hathaway
- Berkshire Hathaway B graph
- Source: Tradingview
Class B shares of Berkshire Hathaway (BRK.B), the conglomerate led by Warren Buffett, have been identified as another key investment opportunity for the second half of 2024. Expected to rise by 20% over the next 12 months, up to $490, the stock is already up 15% this year.
Analysts cite Berkshire Hathaway’s strong financial position and its ability to generate consistent cash flows as key reasons for optimism. The conglomerate’s portfolio diversification, which includes sectors such as insurance, energy, and consumer goods, provides a solid foundation to address market uncertainties. Argus recently upgraded the stock rating from "hold" to "buy", highlighting the attractiveness of the valuation and the company’s resilience in a volatile economic environment.
4. United Airlines Holdings
- United Airlines Holdings graph
- Source: Tradingview
United Airlines Holdings (UAL) is another stock that analysts expect to outperform in the second half of 2024. While the airline industry has faced significant challenges in recent years, United Airlines has shown signs of recovery with a 19% increase in 2024 and a forecast of a 47% upside over the next six months.
The airline benefited from the recovery of international air travel and increased demand for business travel. United Airlines has also implemented effective cost management strategies and expanded its international routes, positioning itself well to capitalize on growing demand. Analysts are positive about the company’s long-term prospects, thanks in part to its continued investments in technology and sustainability.
5. The Walt Disney Company
- The Walt Disney Company weekly graph
- Source: Tradingview
The Walt Disney Company (DIS) remains a closely followed stock on Wall Street, with a forecast of 25% growth for the rest of 2024. Disney shares have already recorded a 13% increase this year, thanks to a solid performance from its theme park segment and the continued success of its streaming platforms.
Guggenheim reiterated his buy rating on Disney shares, highlighting healthy demand for its theme parks and attractions. Additionally, the launch of new exclusive content on Disney+ continues to attract subscribers, strengthening the company’s competitive position in the streaming industry. About 75% of analysts covering the stock have a "buy" or "strong buy" rating, indicating strong confidence in Disney’s growth potential.
The most optimistic valuations include a target price of $145, which represents an increase of 43% compared to current values.
6. Vistra
- Vistra graph
- Source: Tradingview
Vistra (VST), a major utility company in the United States, is another stock that analysts recommend monitoring. Vistra shares have seen a 130% increase in 2024 and are expected to rise a further 21% in the next six months.
- Vistra EPS growth
- Source: SimplyWallet
The company is well positioned to benefit from energy transition initiatives, thanks to its investments in renewable energy and sustainable solutions. Vistra recently announced plans to expand its solar and wind generation capacity, as well as innovative energy storage projects. Analysts like Vistra’s strategy of balancing renewable energy growth with the stability of its traditional businesses, which provide stable cash flows.
7. Chevron
- Chevron graph
- Source: Tradingview
Finally, Chevron (CVX) is another energy sector stock that is expected to outperform in the second half of 2024. Although the shares are only up 4.4% this year, analysts expect a significant upside of 31% in the next few months up to 206 dollars.
Chevron is currently engaged in key projects, including the development of offshore oil assets in Guyana and the acquisition of Hess for $53 billion. These projects are intended to increase production capacity and improve profit margins. Chevron stock is trading at a P/E ratio below its five-year average, suggesting there is still room for growth. Analysts are optimistic about Chevron’s ability to generate shareholder value through effective capital management and targeted expansion strategies.
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Original article published on Money.it Italy 2024-06-23 13:46:00. Original title: Wall Street, 7 titoli da monitorare nel secondo semestre 2024
