One of the best ways to build lasting wealth in the stock market is to buy stocks of strong companies with exceptional growth prospects. To help you position yourself for a lucrative 2024, here are two top-notch companies that are generating attractive returns for their investors.
1. Alphabet
According to Statista, the digital advertising market will reach over $870 billion by 2027, up from around $600 billion in 2023. Google’s dominance in the Internet search industry alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) is in a strong position to benefit as more advertising spend shifts online in the coming years.
YouTube offers Alphabet shareholders another great opportunity to benefit from the growth of digital advertising. According to DemandSage, the hugely popular video sharing platform is a must-have platform for digital marketers, with an impressive 2.7 billion users collectively consuming 1 billion hours of content on the platform every day.
In addition, YouTube is a strong growth driver. First-quarter revenue rose more than 20% year-over-year to $8 billion. Investors can expect this number to steadily rise in the coming years. Demand Sage predicts that YouTube’s user base will grow to 2.85 billion by 2025. Additionally, YouTube’s advertising sales could get a boost if rival TikTok is banned from operating in the US
Alphabet shareholders will also benefit from the rapid adoption of artificial intelligence (AI). Increasing demand for AI model training services and other machine learning workloads is driving growth at Google Cloud, the company’s computing infrastructure division. Google Cloud’s first-quarter revenue rose 28% year-over-year to $9.6 billion. Operating profit, in turn, rose almost fivefold to $900 million.
Here, too, there is enormous long-term expansion opportunity for Alphabet. According to Acumen Research and Consulting, the global cloud computing market will grow to a staggering $2.5 trillion by 2032, up from $495 billion in 2022.
With so much room for profitable growth ahead of us, Alphabet stock is a good buy today. Management seems to agree with this. On April 25, the company increased its share buyback program by a whopping $70 billion. Alphabet also announced it would begin paying a dividend, which should put its stock on the radar of more income-focused investors.
2. Eli Lilly
The US Food and Drug Administration (FDA) warns that obesity can lead to dangerous diseases such as diabetes and heart disease. Eli Lilly (NYSE:LLY) aims to combat these worrying health trends by helping people lose excess body fat. In turn, its breakthrough weight-loss drug, Zepbound, could become the best-selling drug of all time.
Zepbound is an incretin-based therapy that works by stimulating hormones that can reduce a person’s appetite and therefore the amount of food they eat. A 72-week clinical trial showed that people who received the highest dose of the once-weekly injection lost an average of 48 pounds.
Better yet, study participants who were given Zepbound and implemented a diet and exercise plan improved their cholesterol and blood pressure profiles. Other clinical studies showed that the active ingredient in Zepbound, tirzepatide, may improve blood sugar levels in people with type 2 diabetes.
Because of these promising results, Eli Lilly is expected to see huge demand for its new drugs. The healthcare giant’s first-quarter revenue and profit rose 26% and 67% to $8.8 billion and $2.2 billion, respectively.
Looking forward, Eli Lilly’s earnings per share are forecast to grow more than 50% annually over the next half decade. Looking even further into the future, investment bank Goldman Sachs estimates that sales of anti-obesity drugs could rise to a whopping $100 billion by 2030. By buying shares today, you can profit alongside Eli Lilly as the company works to meet high demand for its new weight-loss drugs.
Should you invest $1,000 in Eli Lilly now?
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Goldman Sachs Group. The Motley Fool has a disclosure policy.
“2 Top Stocks That Could Make You Richer in 2024” was originally published by The Motley Fool