Prediction: These 2 Stocks Could Skyrocket in 2024

There are many ways to make money in the stock market. Some investors like to peruse lists of the best-performing stocks in search of highfliers that are set to soar even higher. Others like to bet on beaten-down equities that are due for a rebound.

Whichever strategy you prefer, you’ll likely find something to like about the following two stocks — both of which appear set to surge in the coming year.

1. Nvidia

Winners tend to keep on winning. That’s one of the most powerful lessons I learned during my analyst training at The Motley Fool. So when people ask me how they can profit from the artificial intelligence (AI) boom, I urge them to look first at the companies that are already dominating the AI industry — and Nvidia (NASDAQ: NVDA) is at the top of the list.

Nvidia designs computer chips that power the most cutting-edge AI applications. With businesses of all sizes seeking to obtain the tremendous productivity and efficiency gains that AI can bring about, demand for Nvidia’s chips is soaring.

The semiconductor leader’s sales surged 206% year over year to $18.1 billion in the quarter that ended on Oct. 29. Its adjusted operating income climbed an even more impressive 652% to $11.6 billion.

Much more growth lies ahead. The AI chip market will explode to $400 billion by 2027, according to fellow chipmaker Advanced Micro Devices. Thus, when combined with the enormous demand for chips for video game systems, autonomous vehicles, and cloud services, Nvidia thinks its total market opportunity could be as large as $1 trillion.

Better still, despite its torrid growth and fortune-building share-price gains in 2023, Nvidia’s stock can still be had for an attractive valuation today. Its shares currently trade for less than 40 times its projected earnings in 2024 and 24 times estimates for 2025. That’s still a bargain for an elite business that’s set to grow its profits by 268% this year and 66% next year.

2. Rivian Automotive

While the market’s best-performing stocks can certainly continue to head higher, there’s also something fun about buying stocks when they’re on sale. One heavily discounted stock that’s caught my eye is Rivian Automotive (NASDAQ: RIVN). The electric vehicle (EV) upstart’s shares are down about 90% from the highs they reached shortly after its initial public offering (IPO) in November 2021. But brighter days lie ahead for this future industry leader.

Rivian’s R1T pickup trucks and R1S SUVs are selling briskly. The automaker delivered 50,122 vehicles in 2023, up from 20,332 EVs in 2022. Rivian, in turn, is expected to report a 165% increase in sales to $4.4 billion when it announces its fourth-quarter results on Feb. 21.

Moreover, Rivian’s margins are improving as it boosts production. The company is working to wring out costs from its manufacturing operations. Management expects these efforts, combined with a simpler and cheaper battery pack design, to help Rivian produce positive gross profit in 2024.

Importantly, Rivian’s balance sheet strength — it held over $9 billion in cash and investments as of Sept. 30 — should give it most of the capital it needs to reach its profitability goals. That ought to limit any further shareholder dilution. More equity or debt offerings could be required, but Rivian should find it easier to obtain financing on better terms as its operational results strengthen.

All told, Rivian produced 57,232 vehicles in 2023, up from 24,337 in 2022. That figure is likely to continue to head sharply higher in the coming years. With EV unit sales projected to reach a whopping 73 million EVs by 2040, according to Goldman Sachs, Rivian has a long runway for further expansion.

A promising new deal with AT&T should help. The telecom titan will buy an as-yet undisclosed number of EVs from Rivian as part of its efforts to curb emissions and cut costs.

Consider buying shares today, and you can position yourself to profit from any future deals Rivian signs with other large fleet operators, as well as its rapidly growing sales to consumers.

Should you invest $1,000 in Rivian Automotive right now?

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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Goldman Sachs Group, and Nvidia. The Motley Fool has a disclosure policy.

Prediction: These 2 Stocks Could Skyrocket in 2024 was originally published by The Motley Fool

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