Some of the best-performing stocks, including market monsters helped buoy a rebound in equities. These firms are among the largest corporations in their respective niches and exert significant influence. In fact, all of the stocks discussed here are among the 70 most valuable firms globally. They all boast strong fundamentals balanced by future prospects that result in a very attractive combination.
Best-Performing Stocks: Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) has dominated headlines as a must-have AI stock in 2023. Its chips have proven integral to the generative AI boom that has taken root this year. The emergence of, and excitement around generative AI sent Nvidia’s shares surging higher early in 2023.
Then, in late May the firm forecast Q2 revenues of $11 billion when Wall Street had been expecting $7 billion. That catapulted an already strong Nvidia to new heights. Share prices were then around $380 following the news. They’ve passed $450 recently and they don’t look to be slowing down. In fact, a Bank of America (NYSE:BAC) analyst recently upped his target price to $550 for Nvidia’s shares.
That analyst reasons that cloud and enterprise spending substantiates the higher target prices as it drives demand for Nvidia’s AI chips. A $550 share price would represent a nice return for those who purchase now. However, returns could be significantly higher given that one analyst believes they could rise to $767.
Best-Performing Stocks: Microsoft (MSFT)
The trajectory of Microsoft (NASDAQ:MSFT) has mirrored that of Nvidia. Both firms have been massive beneficiaries of the generative AI boom that has added hundreds of billions of dollars to their valuations. Microsoft’s generative AI prowess lies in the actual customer tools available through OpenAI which it has invested in heavily. Those tools have transformative power and promise to increase revenues for Microsoft at an accelerated rate.
In fact, Microsoft recently announced that it has launched a new generative AI subscription for its Microsoft 365 business suite. The subscription is being tested across 600 enterprise partners and costs $30 monthly. That could increase enterprise revenues by as much as 83%. The 365 suite has already been enjoying double-digit growth over the past several years and accounted for $63.36 billion in sales in 2022 alone. Expect Microsoft to add similar revenue-generating services that feature AI capabilities moving forward.
Best-Performing Stocks: Apple (AAPL)
Apple (NASDAQ:AAPL) skyrocket this year thanks to the dominance of its iPhone, new markets for the iPhone, and the revenue-boosting potential of its Vision Pro VR/AR headset that is due out in early 2024.
Sales of the iPhone set a new record with more than $51.3 billion worth of handsets sold. iPad and Mac sales flagged and sales fell by 3% overall. However, iPhone sales and increasing service revenue have been enough to satiate investors. Part of the reason investors remain keen on AAPL shares is the fact that the company’s Indian market is showing strong signs. The Rest of Asia segment has been a bright spot for the company and Foxconn, a major Apple supplier, is investing in India as well.
The Vision Pro cost is set to cost $3,499 at its release which also provides reason for optimism. All of that news propelled Apple in 2023. It didn’t benefit from the AI boom directly. That might be changing. The company has created its own AI chatbot giving investors one more reason to believe Apple’s growth will continue at its torrid pace.
AMD (AMD)
As I write this, AMD (NASDAQ:AMD) stock is sinking on the news that Taiwan Semiconductor Manufacturing (NYSE:TSM) is warning of a deepening slump. The news sent chip stocks falling across the board. TSMC expects its revenues to fall by 10% in 2023 after giving guidance months earlier that sales would contract by 5%. Given that TSMC is the foundry that provides chips to a large percentage of chip firms the market reacted negatively.
However, there’s reason to believe that AMD will be affected to a much lesser degree than other chip firms. The answer is AI chips. TSMC management stated that end-market demand for its AI chips is expected to grow this year and beyond. That’s where AMD’s strength lies and TSMC is a major supplier to the firm.
The issue is going to affect other chip end markets including automotive, handphones, and industrial segments. AMD is chasing Nvidia and as its nearest competitor its chips are said to be roughly 80% as powerful as Nvidia’s chips.
UnitedHealth Group (UNH)
Now is likely a good time to buy UnitedHealth Group (NYSE:UNH), as another one of the best-performing stocks to buy. The shares are a buy simply for the fact that the company is fundamentally sound on 16% top-line growth year-over-year. Revenues reached $92.9 billion. UnitedHealth Group’s operational earnings increased by 14% as margins shrunk slightly during the period.
UnitedHealth Group’s medical care ratio increased from 81.5% to 83.2% in the second quarter. That’s another indication that operations remain more difficult for the firm than they were a year ago.
Despite the challenges, UnitedHealth Group’s strong growth provides investors enough reason to be optimistic. Management was satisfied with the results and consequently increased its earnings outlook for the year.
The good news for investors is that with an average target stock price of $570, UNH shares offer more than 10% upside according to Wall Street. There’s an additional 1.5% return for investors in the form of a dividend.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) certainly has issues currently as concerns about aspartame threaten the company and its stock. I think those fears are largely unfounded given the scientific evidence. The aspartame issue will blow over. It may already have done so. That makes KO shares less risky as consumer staples look strong overall at the moment.
Let’s quickly understand the aspartame scare as it relates to Coca-Cola. The World Health Organization has stated that aspartame is possibly carcinogenic. However, the World Health Organization also states that a person weighing 154 pounds would have to drink 14 cans of aspartame-containing soda per day to reach a level that would be dangerous. In short, there’s little danger to health or KO stock.
At the same time, consumer staple shares are performing well of late and that also benefits Coca-Cola. It remains a great stock for capital preservation and income investors with a dividend yielding nearly 3%.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) could see potential upside with its Wegovy weight loss drug possibly receiving Medicare coverage. Novo Nordisk’s Wegovy is the first obesity medication on the market. However, there have been affordability concerns as the drug costs more than $16,000 annually without insurance. Medicare is currently prevented from covering the cost of obesity drugs.
A group of lawmakers is looking to change that and has put forth a bill to change coverage. The Treat and Reduce Obesity Act hopes to expand coverage of obesity treatments including Wegovy.
The result is that Novo Nordisk now has much greater future revenue potential due to expanded coverage. Back in May, Novo Nordisk was aiming for $3.72 billion in obesity sales by 2025. That figure had already doubled the firm’s previous expectations from its obesity portfolio. It’s reasonable to believe that Novo Nordisk should expect even better results out of the drug portfolio moving forward.
On the date of publication, Alex Sirois did not have (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.