Investors on Wall Street have reason to be optimistic after enduring the worst stock market performance in over a decade. The S&P 500 has climbed 25% from its bear market low, and is now less than 6% below its all-time high. Once the index surpasses that level, it will signal the arrival of the next bull market.
However, the recent rally has been unequal, with many stocks still struggling to gain momentum. On the other hand, the “Magnificent Seven” stocks have outperformed the broader market. These stocks include Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.
Alphabet has seen a 51% increase, Amazon has surged by 72%, Apple is up by 44%, Meta Platforms has experienced an impressive 180% growth, Microsoft has climbed by 54%, Nvidia has soared by 240%, and Tesla has seen a 93% increase.
Despite their already impressive performance, analysts believe that two of these tech stocks still have significant potential upside. They predict that these stocks could gain 58% and 122% respectively over the next 12 to 18 months.
One of the top performers, Amazon, has attracted investors due to its diversification and continuous innovation. The company is a leader in e-commerce, cloud computing, digital advertising, streaming video, artificial intelligence, video game streaming, consumer electronics, and more. Amazon is well-positioned to benefit from the rise in consumer spending and the accelerating adoption of cloud computing and AI. Analysts maintain a bullish outlook on Amazon, with a projected additional upside of 58%.
Nvidia, another top gainer, has been the clear winner in the growing demand for generative AI. The company’s GPUs are widely recognized as the gold standard for AI processing. Nvidia’s recent financial results reflect the surge in demand for AI, with record revenue and earnings growth. Analysts believe there is still more to come for Nvidia, with a projected upside of 122%.
Despite their impressive performance, both Amazon and Nvidia are still viewed as attractive investments. Amazon’s stock is selling at just 2 times next year’s sales, while Nvidia’s triple-digit earnings growth has caused its valuation to contract. Both stocks have received positive ratings from analysts.
Overall, the recent rally in the stock market has provided a glimmer of hope for investors. While some stocks continue to struggle, others have seen significant gains. Amazon and Nvidia, in particular, are viewed as stocks with further upside potential.