Best-Performing Stock Picks of December 2024
Updated October 28, 2024 at 4:01 am
Buying and holding growth stocks can lead to sizable returns in the long run. For instance, the S&P 500 has an annualized 7.9% return from more than 95 years. Returns have been higher in recent years, including this one. The benchmark is up by 9% year-to-date, with several tech companies pushing the index to new highs.
While economic slowdowns arrive from time to time, a long-term approach has benefited most investors. Panic selling may seem prudent at the moment but often results in lost gains when viewing the stock market with a wider lens.
It’s possible to beat the index if investors look for stocks with long-term growth potential. In fact, you can look at any index’s holdings to discover stocks that have outperformed the benchmark. Wondering which stocks can soar to the top? Here are 15 of the best stocks to buy now.
Our Methodology Our research is designed to provide you with a comprehensive understanding of personal finance services and products that best suit your needs. To help you in the decision-making process, our expert contributors compare common preferences and potential pain points, such as affordability, accessibility, and credibility.
Our Picks - Best Technology Stock: Nvidia Corp.
- Best Social Media Stock: Meta Platforms
- Best Digital Ad Stock: Alphabet
- Best Fast Food Restaurant Stock: Chipotle
- Best Cloud Computing Stock: Microsoft
- Best Fintech Stock: Visa
- Best Consumer Discretionary Stock: Costco
- Best E-Commerce Stock: Amazon
- Best Rideshare Stock: Uber Technologies
- Best Semiconductor Stock: Broadcom
- Best IT Stock: Vertiv Holdings
- Best Cybersecurity Stock: CrowdStrike
- Best Athletic Apparel Stock: Deckers Outdoor
- Best Retail Stock: Walmart
- Best Bank Stock: Nu Holdings
15 Best Stocks of 2024
Best Technology Stock
Nvidia Corp.
Vault Verified
Why We Chose It
Nvidia is one of the best-performing AI stocks available. The chipmaker is leading the artificial intelligence boom, and revenue and profits are expanding at a rapid pace.
Pros
- Key player in AI computing solutions
- Stock’s growth in 2023 outpaced Meta, Alphabet and Microsoft
- Strong and consistent financial performance
Cons
- High valuation compared to a year earlier
- Competition from companies like AMD and Intel
- Sequential revenue growth has been decelerating
Best Social Media Stock
Meta Platforms
Vault Verified
Why We Chose It
One of the Magnificent Seven stocks, Meta is best known for Facebook, but the company also owns WhatsApp, Instagram and Messenger. The company is expanding its services into virtual reality and AI, which could open up new growth opportunities.
Pros
- Global leader in the social media industry
- Opportunities to grow in virtual reality and AI
- Solid financial performance with consistent revenue growth
Cons
- Majority of Facebook’s revenue is ad revenue
- Backlash and increased competition
- Facebook could eventually reach a saturation point
Best Digital Ad Stock
Alphabet
Vault Verified
Why We Chose It
Another Magnificent Seven stock, Alphabet commands 39% of the global digital advertising market, which should continue to add to the company’s long-term growth. The company should also benefit from continued growth in the cloud computing sector.
Pros
- Gemini AI model could improve search, ads and cloud capabilities
- Dominates the global digital advertising market
- Remains the most widely used search engine worldwide
Cons
- Involved in a Department of Justice antitrust case
- Shift in ad spending could hurt revenue
- Continues to deal with privacy concerns
Best Fast Food Restaurant Stock
Chipotle
Vault Verified
Why We Chose It
Chipotle plans to open more restaurants this year than last year. Double-digit revenue growth and expanding profit margins can help the stock rise.
Pros
- Reputable fast-food restaurant chain with more than 3,000 locations
- Most new openings have been coming with Chipotlanes
- The 50-for-1 stock split is bringing more attention to the stock
Cons
- Competitors can make it more difficult for Chipotle to gain market share
- High valuation
- Stock gains have outpaced net income growth over the past year
Best Cloud Computing Stock
Microsoft
Vault Verified
Why We Chose It
Microsoft is another Magnificent Seven stock and a leading cloud computing firm that is still exhibiting high revenue growth for its profitable segment. The company is also gaining market share thanks to its big lead in the artificial intelligence race.
Pros
- Cloud computing is still growing at a good pace and accounts for more than half of Microsoft’s revenue
- Exposure to numerous industries and enough capital to explore new opportunities as they arrive
- High annual dividend growth rate
Cons
- Low dividend yield
- The stock’s gains over the past year exceeded year-over-year revenue and net income growth
- Competition in the artificial intelligence industry is heating up
Best Fintech Stock
Visa
Vault Verified
Why We Chose It
Visa offers high profit margins and a reliable business model that depends on consumer spending. The stock can rally during the good times and experience limited losses during the bad times.
Pros
- High profit margins
- Reliable business model that revolves around consumer spending
- Excellent dividend growth rate
Cons
- Competition
- The stock has slightly underperformed the S&P 500 over the past five years
- Low dividend yield
BEST CONSUMER DISCRETIONARY STOCK
Costco
Vault Verified
Why We Chose It
Costco is an established wholesaler that offers affordable products for its members. The stock has outperformed the market for several years while raising its dividend. The company is a recession-resistant stock that still does well in bull markets.
Pros
- Rising revenue in multiple regions
- E-commerce sales are on the upswing
- The company’s vast number of stores presents a steep barrier to entry for competitors
Cons
- Low profit margins
- Competition from other retailers that focus on affordable products
- Low dividend yield
Best E-Commerce Stock
Amazon
Vault Verified
Why We Chose It
Amazon’s online marketplace continues to grow in domestic and international markets. Amazon Web Services has been another catalyst. The company also has exciting initiatives that can pay off in the long run, such as streaming and advertising.
Pros
- Potential for Amazon to use streaming, advertising, and other segments to generate more growth
- Amazon’s online marketplace is arguably the most recognizable one on the web
- Double-digit revenue growth rates in domestic and international markets
Cons
- Low profit margins
- Lower consumer spending can hurt e-commerce growth rates
- Competitors in e-commerce, cloud computing, and streaming can get market share
Best Rideshare Stock
Uber Technologies
Vault Verified
Why We Chose It
Uber’s stock has soared over the past year, and the company recorded its first operating profit. Uber’s two core businesses—ridesharing and food delivery—continue to deliver strong results for the company.
Pros
- Continues to improve ridesharing business
- Diversified income in additional revenue streams
- Investing heavily in autonomous vehicles
Cons
- Continues to face regulatory challenges
- Reliance on gig workers could lead to more labor disputes
- Faces heavy competition from companies like Lyft
BEST SEMICONDUCTOR STOCK
Broadcom
Vault Verified
Why We Chose It
The recent acquisition of VMware has improved Broadcom’s software business, but that’s not the only catalyst. Revenue from AI products hit a new record for the company, prompting the firm to raise its fiscal 2024 guidance.
Pros
- Broadcom’s AI sales hit a new record
- The VMware acquisition is bearing fruit
- Respectable yield and double-digit dividend growth rate
Cons
- Less momentum after the stock split
- The valuation remains high
- Competition from other AI chipmakers
Best IT Stock
Vertiv Holdings
Vault Verified
Why We Chose It
Vertiv Holdings provides IT infrastructure support and has been in business since 1965. The company provides support to data centers and industrial facilities, so it’s well-positioned for growth in the coming year.
Pros
- Can benefit from the growth of data centers
- Pays dividends annually
Cons
- Operating in a competitive market
- Vulnerable to regulatory changes
- High valuation
Best Cybersecurity Stock
CrowdStrike
Vault Verified
Why We Chose It
The cybersecurity platform Crowdstrike experienced incredible growth before the global IT outage. The mistake has decimated year-to-date gains, but the business model is attractive for investors with lengthy time horizons.
Pros
- Experienced rapid growth over the past year
- High annual recurring revenue
- The fallout from the global IT outage presents a long-term buying opportunity
Cons
- Global IT outage has cast doubt on the stock
- Faces strong competition from other cybersecurity companies
- Shares are more expensive than they were a year earlier
Best Athletic Apparel Stock
Deckers Outdoor
Vault Verified
Why We Chose It
The athletic apparel company is gaining market share from top rivals with its HOKA and UGG product lines. Deckers Outdoor continues to deliver double-digit revenue growth and higher profit margins.
Pros
- The company is gaining market share from industry giants like Nike
- Recent S&P 500 inclusion has brought more attention to the stock
- Profit margins are rising
Cons
- The industry has many competitors
- Stock gains over the past year have exceeded net income growth
- No dividend
Best Retail Stock
Walmart
Vault Verified
Why We Chose It
Walmart is well-known for offering affordable products and has been in business since 1962. The company should attract more customers as the cost of living and inflation remain elevated.
Pros
- Walmart has been around for decades
- The company is accelerating revenue growth with e-commerce and advertising
- The company has an opportunity to attract higher net worth consumers
Cons
- Advertising represents a small percentage of overall revenue, which means it may not have a meaningful impact for several years
- Rising competition from other retailers and e-commerce businesses
- Narrow profit margins
Best Bank Stock
Nu Holdings
Vault Verified
Why We Chose It
The digital bank continues to expand in Latin America. Revenue and earnings growth are both impressive. Nu Holdings has more than 100 million customers.
Pros
- A large customer base
- High revenue and net income growth
- A wide range of financial products
Cons
- High valuation
- Most of the bank’s business is in Latin America
- Competition
What Is a Stock?
A stock represents partial ownership in a company and gives you a claim on that company’s earnings and assets. As the value of the business rises and falls, so will shares of the company’s stock.
If you invest in a company’s stock, it’s probably because you believe that company will increase in value. Buying stocks is an excellent way to build long-term wealth. Buying any of the best stocks will expedite the timeline for growing your equity.
Stocks are bought and sold through stock exchanges, like the New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASDAQ). Some companies will sell stocks directly to investors, but most will require you to purchase shares through an online broker.
And when you buy stocks, you may also gain access to certain privileges, depending on whether you buy common stock or preferred stock. Common stock has the potential for higher returns and often includes voting rights. In comparison, preferred stock comes with higher dividend returns and less share price volatility.
How To Choose the Best Stocks For You
With more than 3,000 stocks listed on the NASDAQ alone, picking stocks can be difficult for the most experienced investor. And unfortunately, there’s no foolproof investing formula that will ensure you pick the right stocks.
Keep the following in mind when investing in stocks.
Decide On Your Investing Goals
Everyone invests because they want to earn money, but what do you want your money to do for you? Your investment goals will depend on factors like your age, income and level of risk tolerance.
Start by thinking about how long you plan to invest your money. Short-term investment strategies are five years or less, while long-term plans are usually over 10 years. The longer you have to invest your money, the more opportunities you’ll have to reach your goals.
You should also consider how much risk you’re willing to take on. Younger investors can afford to take more investing risks, whereas if you’re nearing retirement, you’ll want to avoid risking any big losses.
Research Potential Companies
You need to research any stocks you’re considering adding to your portfolio. You’ll start by reviewing the company’s financial information, which can be found in its SEC filings. If you want to find the best stocks, you will have to dig into a company’s financial statements. In particular, you’ll want to review the balance sheet, income statement and cash flow.
“Research is important, but don’t get caught up in trying to time the market or find the perfect stocks to invest in. Investing is a long-term game and getting started now gives you the best chance to maximize your returns.”
— Jamie Johnson
As you’re reviewing the company’s financials, pay attention to the following metrics:
- Price-to-earnings (P/E) ratio: The P/E ratio compares the company’s current share price to its earnings per share (EPS). This ratio can help you compare the value of that company’s shares to others within the same industry.
- Price-to-earnings-growth (PEG) ratio: The PEG ratio expands on the P/E ratio by factoring future growth into the equation, giving you a more comprehensive picture of that company.
- Debt-to-EBITDA ratio: The debt-to-earnings before taxes, depreciation and amortization (EBITDA) ratio measures the income generated and that company’s ability to pay down debt before deducting interest, taxes, depreciation and amortization. This ratio helps you determine whether the company has a heavy debt load.
Look For Companies With a “Moat”
Legendary investor Warren Buffett says that when you’re evaluating potential investments, you should always look for companies with a moat around the business. According to Buffett, a moat is a competitive advantage that will protect the company and allow it to maintain its pricing power.
Once you’ve found a company that you believe has a moat, you need to determine how strong it is. Will that company still be in business in another 20 years? From there, you need to assess the quality of the company’s management team.
Make Sure You Understand the Business Model
Imagine a local business owner coming to you and asking you to invest money in their company. If you didn’t understand the business or how it worked, would you be willing to give that person any money? Probably not.
You should take this same mindset when it comes to investing in stocks. Take the time to learn as much as you can about each company you’re considering investing in. This level of due diligence will help you choose better investments and will give you the confidence to stay the course if that company’s share price drops.
Adjust Your Strategy As Needed if You Want To Find the Best Stocks
Your work isn’t over after you’ve done the necessary research and picked your investments. Now, you’ll continue to monitor your investments and adjust your strategy as needed. Ideally, you’ll buy stocks as long-term investments, but you do have the option to sell if you’re happy with your profits.
Most importantly, continue to optimize your portfolio and focus on the factors you have control over. At some point, you may want to branch out beyond stocks and consider other investment options, like mutual funds or an IRA.
Investing Strategies For The Best Stocks
The best stocks can outperform benchmarks like the S&P 500 and the Nasdaq Composite for several years. But it’s important to approach each stock with the right strategy. These are some of your choices:
- Buy and hold: Time in the market often beats timing the market. A buy-and-hold strategy involves building positions in companies that you wouldn’t mind holding onto for several years.
- Buy the dips: It’s a common mistake among beginners to panic when their stocks lose value. Using dips as buying opportunities can lower your cost basis and increase your long-term gains.
- Portfolio diversification: Putting all of your eggs in one basket is incredibly risky, especially if you choose the wrong egg. Investing in multiple stocks across numerous sectors spreads your risk and can result in higher returns.
Picks from Hedge Funds
Hedge fund managers conduct thorough research before picking stocks. These fund managers also have analysts who provide insights that can lead to better decisions. A lot of thought goes into each transaction at a hedge fund, and investors can get great ideas from these funds.
These are some of the best stocks to buy now according to hedge fund managers:
- Microsoft
- Amazon
- Alphabet—Class A
- Apple
- Meta Platforms
- Nvidia
- Alphabet—Class C
- Visa
- JPMorgan
- Berkshire Hathaway—Class B
Most of the top 10 holdings are Magnificent Seven stocks. Hedge funds also place a strong focus on growth stocks with high market caps. None of the stocks on this list has a market cap below $500 billion.
Stocks vs. Index Funds
Many people like investing in stocks because of the high growth potential, but this investment strategy does come with potential risks. Since you’re investing in a single company, your portfolio is less diversified and you’re exposed to higher market volatility.
In comparison, an index fund tracks and attempts to duplicate the performance of a market index, like the S&P 500. Rather than investing in a single company, you’re tracking an index made up of hundreds of companies which provides more diversification.
Individual stocks are active investments, so it’s better suited to more experienced investors who have the knowledge and time to monitor the stock’s performance. Index funds are a passive investment strategy, making them a good option for beginners looking to invest.
The following table outlines some of the biggest differences between stocks and index funds:
| Stocks | Index Funds | |
| Ownership | Represents ownership in a single company | Attempts to duplicate the performance of a market index |
| Management style | Active | Passive |
| Skill level | Buying individual stocks is better for experienced investors with a higher level of market knowledge. | Investing in index funds is a good option for beginners since it’s a more straightforward approach. |
| Diversification | Low—investing in one stock exposes you to more risk | Provides more diversification since you’re investing in a wide variety of companies |
| Risk | Comes with higher volatility and risk | A lower risk investment than individual stocks |
Frequently Asked Questions
What Is the Best Investment with the Highest Return?
The U.S. stock market is considered the best investment with the highest returns. Investors can choose from many growth stocks or put their money into index funds to mirror market returns. However, investing in the stock market comes with more risks than other assets like bonds and high-yield savings accounts. Investors often have to take a greater amount of risk to end up with a higher potential return.
What are the Magnificent 7 Stocks?
The Magnificent Seven stocks are mega-caps that have historically outperformed the market and contribute to a large percentage of the S&P 500’s returns. The Magnificent Seven stocks are:
- Microsoft
- Apple
- Nvidia
- Amazon
- Alphabet
- Meta Platforms
- Tesla
Is It a Good Idea to Invest in Stocks?
Buying stocks may be a good idea if you’re willing to implement a buy-and-hold strategy. That means you buy stocks and hang onto them for years, regardless of what happens in the market. This strategy helps you take advantage of compound interest, and you may earn company dividends.
Should a Beginner Invest in Stocks?
If you’re a beginner looking to invest, you can start investing in stocks, but you’ll need to do your research first. Stay informed about what’s happening with the global economy and upcoming industry trends.
Research any companies you’re considering investing in, and diversify your stocks across different asset classes. You can also use trading simulators to help you get comfortable picking stocks and testing different investing strategies.
How Much Money Do I Need to Start Investing in Stocks?
You can begin investing in stocks even if you don’t have a lot of money to start with, and there’s no minimum investment required. The growth of commission-free brokerage accounts and fractional shares have made buying stocks more affordable. Once you come up with a reasonable budget, you can start looking for investing opportunities.
Newsweek writer Marc Guberti contributed to this post.
Editorial Disclosure: We may receive a commission from affiliate partner links included on our site. However, this does not impact our staffs’ opinions or assessments.
