The market’s relentless ascent into bull territory leaves investors searching for stocks poised to continue defying gravity. The S&P 500, already up 3% this year after a 24% surge in 2023, has breached the 4,900 mark, while the broader market boasts a 36% gain since October 2022’s lows. But who will be the flagbearers as the rally progresses?
Echoing 2023’s trend, tech titans have largely fueled the market’s upward spiral. However, Will Rhind, CEO of GraniteShares, sees Artificial Intelligence (AI) as the dominant melody in 2024’s symphony. Here, we delve into his five stock picks – a diverse ensemble encompassing chipmakers, a crypto player, and a tech giant undergoing a strategic shift.
Nvidia: The Reigning AI Monarch
Rhind crowns Nvidia the “undisputed king of AI stocks,” with its crown jewels gleaming brighter than ever. Shares have surged 26% this year, adding to a staggering 206% gain over the past year. However, the upcoming February earnings report casts a shadow of intrigue. Will the company maintain its stellar performance? While Nvidia has consistently surpassed earnings expectations for four quarters straight, a “huge question mark” looms regarding export controls on strategic chip technologies, particularly concerning sales to China. Can Nvidia navigate this geopolitical maze and translate uncertainty into positive earnings?
AMD: The Rising Star in the AI Firmament
Another chipmaker, AMD, emerges as a compelling challenger in Rhind’s portfolio. Though not basking in the same spotlight as Nvidia, its presence in the AI arena cannot be eclipsed. In a market yearning for competition and value, AMD shines as the “best of the rest,” offering investors an enticing alternative within the sector. With a 20% year-to-date increase and a 135% gain over 12 months, AMD is no mere understudy. It’s a rising star with the potential to steal the show.
Coinbase: Crypto’s Guiding Light Amidst Shifting Tides
Despite a recent pullback, Rhind remains bullish on Coinbase, his chosen champion in the ever-evolving crypto landscape. While the buzz surrounding a Bitcoin ETF has faded, the stock has doubled in value over the past year. With crypto wallet prices still elevated, Rhind expects this to translate into robust Coinbase earnings, fueled by renewed interest in crypto through stock ETFs. However, investors must acknowledge the inherent volatility associated with the cryptocurrency market.
Alibaba: Unveiling Value in a Turbulent Chinese Landscape
China’s tech giant, Alibaba, has weathered its share of storms, navigating a sluggish economy and a volatile stock market. Yet, Rhind sees it as a “macro value play” with the potential to surprise investors. He hails Alibaba as the “highest quality company” in China, further bolstered by recent share purchases by its co-founders. While down 5% year-to-date, Alibaba offers exposure to high-quality Chinese tech at a potentially attractive valuation. However, investors must be wary of the ongoing regulatory and economic uncertainties in China.
Meta: Metamorphosis Towards an AI-Powered Future
With a renewed focus on AI and a phenomenal 164% gain in 2023, Meta earns a spot on Rhind’s list. While replicating last year’s meteoric rise might be a formidable feat, Rhind remains optimistic. He expects Meta to prioritize cost control and strategically invest in AI, potentially boosting margins and future performance. However, investors must remember that even with its pivot towards AI, Meta still faces stiff competition from other tech giants in this arena.
Beyond the Curtain:
Remember, these are just glimpses into the intricate tapestry of the market. Past performance is not a guarantee of future success, and every investment carries inherent risks. Before embarking on your own investment journey, conduct thorough research, consider your risk tolerance, and consult with a financial advisor to tailor a strategy that aligns with your individual goals.
