The NASDAQ index, which lost one-third of its value last year, has rebounded with vigor in the first half of 2023. It climbed a staggering 32% during the period, channeling the spirit of 1983 when the tech-heavy index shot up 37% in value. Hence, investors are looking to cash in on the uptrend and to wager on the top stocks for 2023.
Yet, the optimism doesn’t end there. According to historical trends and a recent CFRA analysis, the latter half often glows even brighter when the market shines in the first half.
Specifically, the S&P 500 is likely to notch significantly larger gains in the back-end of the year. In the wake of 2022’s challenges, the dominant narrative revolves around the pursuit of efficiency and the transformative power of artificial intelligence.
As investors set their sights on the horizon, optimism reigns supreme in curating their stock picks for 2023.
Oracle (ORCL)
Traditionally renowned for its database management and enterprise resource planning, Oracle (NYSE:ORCL) is now turning heads with its foray in the AI sphere.
This changing focus is reaping dividends, as evidenced by its stellar, robust earnings and growth. The tech behemoth recently posted earnings per share of $1.19 and a commendable revenue bump of 17%, bringing its tally to $13.8 billion in the fiscal fourth quarter.
Notably, its cloud venture, infused with AI strategies, soared to an impressive $4.4 billion, marking a 54% surge year-over-year. With the rapid advancements in the AI domain and
Oracle’s ability to harness its tremendous potential, the trajectory for this tech giant seems unmistakably skyward-bound. It offers an excellent dividend yield of 1.4%, with eight consecutive years of growth.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) faced some turbulent waters post-pandemic, marked by daunting comps and aggressive competition.
An unexpected setback occurred when the streaming giant reported its first subscriber loss in a decade in its first quarter last year, with its stock plummeting by a staggering 60% in the following four months.
However, Netflix’s resilience has shone through. Instead of wallowing in defeat, the company leadership took proactive measures.
One particular area of focus was the rampant password-sharing, with nearly 43% of Netflix’s 100 million users sharing accounts. Moreover, Netflix introduced an $8 surcharge for sharing outside immediate households.
There was an 8% jump in Q2 subscriptions, with revenue hitting $8.19 billion with its earnings-per-share at $3.29, surpassing analysts’ predictions.
With a projected third-quarter revenue increase of 7% year-over-year, Netflix seems poised to redefine its bullish narrative. Besides this, NFLX stock is up 40% year-to-date, offering a 12.7% upside from current levels.
Apple (AAPL)
When it comes to tech powerhouses, Apple (NASDAQ:AAPL) remains a paragon of innovation and excellence. Its unparalleled product suite, combined with the global obsession with the iPhone, continues to position the company at the top in a fiercely competitive market.
The brand’s ability to command premium prices is a testament to its established market dominance, leading to a gusher of cash inflows every quarter.
Investment heavyweights aren’t just watching from the sidelines. Warren Buffett often praises Apple as the shiny centerpiece of his investments.
The company isn’t just stacking up its profits. Since 2012, Apple has funneled more than $500 billion into share buybacks. Just last quarter, it generously returned $24 billion to shareholders.
Apple epitomizes an investor’s utopia with a jaw-dropping $62.5 billion in cash reserves and a growing 0.5% dividend yield for nine consecutive years. Also, Tipranks analysts suggest even brighter horizons with a projected 16.5% rise from its current market standing.
AbbVie (ABBV)
Once a segment of Abbott Laboratories, AbbVie (NYSE:ABBV) has faced the challenge of diversifying its revenue streams away from its, especially as its star arthritis drug, Humira.
Though Humira recorded a 25% sales dip following patent expiration, it was still able to notch up $4 billion in sales in its most recent quarter
The company boasts a massive drug pipeline and seeks to broaden Humira’s applications. Some of these include Skyrizi, a plaque psoriasis treatment, and Rinvoq, a remedy for Crohn’s disease.
Both have shown robust sales growth of over 50% in its second quarter, compensating for Humira’s drop in sales. This dynamic shift led to sales that exceeded analysts’ predictions by a sizable $400 million, driven mainly by non-Humira sales, marking a promising transition for the firm.
AbbVie offers an attractive 4% dividend yield with a notable five-year growth rate of 12.3%, further cementing its reputation as a top bet in the healthcare sphere.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) has been the beacon of robust returns for its investors for years, leveraging its powerful position in PCs, cloud computing, gaming, and more. Reflecting on this prowess, its shares have more than tripled in the last five years.
The tech giant’s recent fiscal fourth-quarter earnings surpassed expectations by a comfortable margin, reporting an earnings-per-share of $2.69 against the estimated $2.55 and a revenue of $56.19 billion, marginally exceeding the forecast of $55.47 billion.
As Microsoft steadily unveils advanced AI solutions, building upon its collaboration with OpenAI, it has solidified its leadership in the AI realm. Complementing this is its thriving cloud business, showcasing a 15% revenue surge in the second quarter.
Also, the expected $68 billion acquisition of Activision Blizzard post a pivotal legal win underlines the firm’s ambitious growth trajectory. Although the current 0.85% dividend yield might seem modest, Microsoft’s formidable cash reserves hint at the potential for a bigger dividend hike in the future.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) stands tall with its diverse application suite, which sees an eye-popping 3.8 billion monthly users. This user engagement underlines the platforms’ sustained appeal.
It will benefit immensely from its growing product base, including Threads, Reels, and the AI-backed Llama 2. These investments will significantly enhance content recommendations and augment user experiences, ultimately turning things up a notch or two as far as its growth rates are concerned.
In leveraging AI for tailored advertising, Meta’s new products, Meta Advantage, and Meta Lattice, offer businesses enhanced ad efficiency and AI-driven messaging, positioning Meta as an invaluable ally.
Despite facing analyst skepticism and dropping sales last year, 2023 marks Meta’s resurgence. Cost-effective strategies and initiatives like open-sourcing Llama 2 signify its commitment to industry-wide innovation.
Meta’s emphasis on the metaverse and the anticipated Quest 3 mixed reality headset highlight its long-term vision, priming the company to pioneer in the intertwining worlds of virtual reality and AI.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is blazing a trail in the stock market, turning heads with its recent earnings smasher. Reporting an earnings-per-share of $2.45 on revenues of $13.5 billion, the figures effortlessly outshone Wall Street’s expectations of a $2.08 earnings-per-share and $11.2 billion revenue.
Such robust results prompted Wedbush Securities’ analyst Dan Ives to label the earnings as a “historical moment” in the tech realm. And the momentum doesn’t stop there; the company’s shares experienced a brief soaring past the $500 mark post-earnings, cementing its position with an impressive annual return of over 200% for the year.
As a titan in the AI domain, Nvidia is strategically poised to capitalize on the surging demand for its chips. This dominance assures the company’s sustained growth trajectory as Bernstein’s optimistic projection places Nvidia’s AI-driven revenue for the upcoming year between $75 billion to $90 billion.
On the date of publication, Muslim Farooque 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