These companies dominate their respective areas of tech and could deliver major gains over the long term.
Investors have been on a roller coaster since the start of 2024, with considerable market fluctuation. The Nasdaq Composite and S&P 500 experienced plenty of peaks and valleys due to factors like the budding artificial intelligence (AI) market, a potential decrease in interest rates, and easing inflation.
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The most recent dip occurred on July 11 when a U.S. inflation report revealed the Consumer Price Index (CPI) decreased 0.1% the month before, the index’s first negative reading since May 2020. Meanwhile, the CPI saw a 3% year-over-year rise in June, decelerating from May’s 12-month increase of 3.3%.
Markets opened higher on the encouraging news, while tech stocks began to tumble later in the day. Investors who sought haven in tried-and-true stocks like Nvidia (NVDA -0.62%), Amazon (AMZN -0.91%), and Microsoft seemed to reshuffle their holdings to include companies that could also benefit from easing inflation.
The dip in tech stocks could signal a buying opportunity, with many of these companies still likely to see significant gains over the long term. So, here are two growth stocks that are screaming buys in 2024 and beyond.
1. Nvidia: Growth catalysts that will keep it expanding for decades
Nvidia’s stock has climbed 157% since the start of 2024, which has made it the first chipmaker to cross a market cap of $3 trillion. Yet, its dominant role in tech suggests it still has plenty of room left to run.
Since the start of last year, Nvidia emerged as one of the biggest threats in AI, with its graphics processing units (GPUs) becoming the most sought-after chips by developers worldwide. Increased demand for AI services has caused Nvidia’s earnings to soar as the market has required a seemingly endless supply of GPUs.
As a result, Nvidia’s revenue rose 262% year over year in its latest quarter (first quarter of fiscal 2025), while operating income soared 690%. The company profited from impressive gains in its AI-focused data center segment.
While AI remains a lucrative growth catalyst for Nvidia, with the sector projected to hit nearly $2 trillion in spending by 2030, the company achieved solid positions in other tech areas that could also boost its business in the long term.
For instance, the company achieved an 88% market share in discrete desktop GPUs, a market where it sells its chips to consumers who use them to build high-powered gaming PCs or setups for video editing. Sales of these chips are classed under Nvidia’s gaming segment, which rose 18% in the fiscal first quarter of 2025, ended April 28, 2024.
The quarter also highlighted the company’s budding automotive business, where Nvidia supplies its hardware to companies like Tesla, powering self-driving technology. Automotive revenue jumped 11% to $329 million in Q1 2025. However, Nvidia CFO Colette Kress sees automotive as a potential multibillion-dollar business as the market develops and expects it to be the “largest enterprise vertical” with its data center segment in 2024.
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Nvidia’s shares are trading at about 47 times its forward earnings, which doesn’t exactly scream “bargain.” However, its head start in AI has seen its financials rise so far above its competitors that Nvidia is unlikely to lose its market dominance anytime soon. As a result, this growth stock will likely continue delivering gains for years, making it a screaming buy in 2024.
2. Amazon: A better value than you might think
While Nvidia enjoys hype around its chips, there’s been similar excitement over Amazon’s position in AI software. The company’s cloud platform, Amazon Web Services (AWS), holds a leading 31% market share in the cloud industry, potentially giving it an edge in AI.
Cloud services have become the go-to for many businesses seeking ways to integrate AI into their workflows. Meanwhile, AWS and rivals like Microsoft’s Azure invested heavily in their respective platforms, introducing new AI tools over the last year.
However, Amazon’s lead in the industry has allowed it to more easily promote its products to its prominent clientele, which includes Netflix, Formula 1, Meta Platforms, and Samsung.
As a result, bullish investors boosted Amazon’s stock by 53% since last July. While that kind of rally could sink the value of a company’s shares, Amazon is actually more of a bargain than you might think.
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Amazon’s price-to-sales (P/S) ratio is significantly lower than the same metric for its biggest competitor, Microsoft. Additionally, Amazon’s P/S is reasonably close to the average it has maintained over the last decade, while Microsoft’s is nearly double. The P/S ratio is a useful valuation metric calculated by dividing a company’s market cap by its trailing 12-month revenue. In other words, the metric highlights the cost of a single share in relation to how much that share generates in revenue. As a result, the lower the P/S, the more value a stock offers.
So, in this case, Amazon’s P/S indicates that its stock is trading at a bargain compared to its No. 1 rival, Microsoft, making it a no-brainer investment this year.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Meta Platforms, Microsoft, Netflix, Nvidia, and Tesla. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short August 2024 $35 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.