What to do with $100,000? Where to invest that kind of money? These stocks to buy for 2024 include technology stocks, which continue to be a safe bet for growth-oriented investors. Of course, tech stocks are coming off their best year since the heady days of the internet bubble in 1999, with the Nasdaq index rising 43% in 2023. Despite the big rally, there’s still reason to be bullish on tech, semiconductor and microchip stocks in particular.
These securities have a multi-year growth driver behind them in artificial intelligence (AI). While AI drove the Nasdaq higher last year, the technology is still in its infancy, and companies are only now starting to monetize it. Expect demand for AI microchips and semiconductors to continue growing as the technology changes the world. Here are three stocks to buy for the $100,000 portfolio: 2024 edition.
Advanced Micro Devices (AMD)
Analysts at Stifel Financial (NYSE:SF) just upgraded their price target on shares of chipmaker Advanced Micro Devices (NASDAQ:AMD) from $145 to $170. The new price target implies a 20% upside for AMD stock from current levels after a 123% gain over the past 12 months. In December alone, AMD’s share price rose 20%. Stifel analysts cite AMD’s strong balance sheet and ties to secular trends such as AI as reasons to remain bullish on the stock.
AMD stock has been a long-term winner for investors, gaining 650% over the past five years. The increase in 2023 was only about half the rise with rival chipmaker Nvidia‘s (NASDAQ:NVDA) stock; AMD has outpaced Nvidia over the past six months (24% vs. 12%) and appears to have momentum heading into 2024. AMD’s executives have also clarified that they are going all-in on AI, recently launching a new series of microchips called the “Ryzen 8040,” specifically for AI applications.
Cadence Design Systems (CDNS)
Now for a technology stock that most investors are likely unfamiliar with—Cadence Design Systems (NASDAQ:CDNS). Based in Silicon Valley and an ongoing concern since 1988, Cadence produces the software, hardware, and silicon pieces for designing and building integrated circuits, microchips and circuit boards. Think of them as creating the nuts and bolts of the microchip industry. While Cadence Design gets little attention, its stock is up 66% over the past 12 months and 510% over five years.
Heading into 2024, Cadence Design Systems could be a good way to play the rally in chip and semiconductor stocks. The company’s earnings remain strong, and it has forecasted full-year 2023 revenue growth of 15% year-over-year and earnings per share (EPS) growth of 20%. Cadence is also flush with cash of $962 million and long-term debt of $649 million at the end of Q3 2023. CDNS stock isn’t cheap, trading at 75 times future earnings estimates, but the stock’s performance justifies the premium price.
Micron Technology (MU)
Sticking with chipmakers, we have Micron Technology (NASDAQ:MU). Its stock is up 12% in the past month after the company posted better-than-expected quarterly results. Over the last 12 months, MU stock has risen 66%, up 155% through five years. Not yet profitable, Micron reported a loss of $0.95 a share for its fiscal first quarter, which was better than the expected loss of $1.01 on Wall Street. Revenue totaled $4.73 billion, which beat analysts’ forecasts of $4.58 billion.
Micron is a leader in dynamic random-access memory chips for desktop computers and servers, and flash memory in smartphones and hard drives. During its earnings call, the company’s management team gave a bullish outlook for AI, saying the technology should drive “multiyear growth.” Micron also said that inventory levels for its memory and storage chips are normal, and it’s working with Nvidia on upcoming AI chips—all music to investors’ ears.
On the date of publication, Joel Baglole held long positions in NVDA and CDNS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
