These companies have what long-term investors need to grow their portfolios.
Investors have been eagerly awaiting a new bull market, and multiple indexes hitting new highs in early 2024 provide final confirmation that a new bull market is well underway. While not all stocks are fully contributing to the growth of today’s bull market right now, companies with wide moats and proven financial strength are steadily rising to the top.
If you’re looking for two great growth stocks in the wake of the current bull market, here are two you shouldn’t miss.
1. Alphabet
alphabet (Google 1.31%) (GOOG 1.32%) is a veteran company in the technology space, but that doesn’t mean its growth opportunities are nearing an end. Google, the company’s flagship search engine, accounts for approximately 40% of digital advertising revenue generated worldwide. However, the digital advertising market is still growing at a high pace and is on track to reach a global valuation of $1.2 trillion by 2030. This means that the company is expected to have a compound annual growth rate of approximately 16% from its current valuation.
For the full year 2023, Alphabet had total revenues of approximately $307 billion and net income of approximately $74 billion. These two numbers represent increases of 9% and 23%, respectively, from 2022. Digital advertising through Google Search still accounts for the majority of the company’s revenue. Case in point: Alphabet brought in $86 billion in revenue in the fourth quarter, about $48 billion of which came from the Google search engine.
While search brings in the bulk of Alphabet’s revenue, other segments account for an increasing share of Alphabet’s revenue. growth. One example is YouTube, which in his last three months of 2023 brought in $9.2 billion in ad revenue, compared to the numbers he reported in the same quarter of 2022. % increased. Subscriptions are also part of Alphabet’s ever-growing pie. The company’s subscription, platform and device business brought in nearly $11 billion in revenue in the fourth quarter of 2023, up 23% year-over-year.
The company is also making impressive strides in the world of artificial intelligence (AI). Gemini is Alphabet’s large-scale language model (LLM) chatbot designed to operate in mediums ranging from mobile devices to data centers. Gemini is available in different versions and tiers, so organizations of various sizes can choose the one that fits their unique needs. Alphabet released the latest version of its AI model, Gemini 1.5, in February, just a few months after releasing the first version. These models have different use cases, and Gmail and Google Docs already have Gemini built in to some degree.
according to financial times An April 3 report said Alphabet may be considering an AI-powered search engine with a subscription-based paywall. The vast footprint that Alphabet has maintained in the search engine market for decades continues to drive its business forward. The company’s focus on expanding its subscription-based services is a smart move as it seeks to diversify in a rapidly evolving competitive space as the AI boom continues. For long-term investors, Alphabet still looks like a solid stock to buy and hold for the long term.
2. Pinterest
pinterest (pin -1.12%) The company has had a tumultuous few years after growth accelerated significantly during the early months of the pandemic. In the difficult macro period following the height of the pandemic, a slowdown in advertising spending, the bread and butter of Pinterest, has become a challenge.
Unfavorable revenue and user growth compared to the height of the pandemic, combined with an overall slowdown in these areas, dampened investor enthusiasm for the business. Tough economic conditions are also making companies more cautious about where they spend their advertising dollars, a trend that Pinterest has no control over but will slowly recover as macro conditions improve.
Pinterest’s free-to-use website and mobile apps provide millions of users around the world with inspiration for everything from recipes to travel to home decor, but these platforms can help brands It is also a major source of advertising space. The company sells ad space to vendors in a variety of industries and places those ads, in the form of videos and images, on the remaining Pins that users browse for inspiration on specific topics. We are making a profit.
At the end of 2023, Pinterest had 498 million monthly active users worldwide, a steady 11% increase compared to the end of 2022. Revenue for the year totaled $3 billion, an increase of 9% from 2022. Users (ARPU) increased by only 1% over his 12 months. However, by region, ARPU rose 5% in the US and Canada last year, 15% in Europe, and 17% in the rest of the world.
Although the company reported a net loss under generally accepted accounting principles (GAAP), both the third and fourth quarters of 2023 were positive with net income of $7 million and $201 million, respectively. It became. After a series of shaky financial reports, the company appears to be gradually returning to healthy growth levels, and investors are taking note. As of this writing, Pinterest is up about 30% from where it was a year ago. Now might be a good time to buy a few social media stocks.
Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. Rachel Warren has a title in Alphabet. The Motley Fool has positions in and recommends Alphabet and Pinterest. The Motley Fool has a disclosure policy.
