If you can find strong companies that are set to benefit from powerful long-term trends, you can earn a fortune in the stock market. To advance your hunt for these wealth builders, here are two elite businesses that are set to deliver handsome returns to their shareowners in the years ahead.
1. Meta Platforms
After a rough stretch, Meta Platforms (META +1.81%) is back to its winning ways. The advertising market is recovering, and the social media king is riding the wave to hefty profits.
NASDAQ: META
Key Data Points
CEO Mark Zuckerberg deemed 2023 Meta's "year of efficiency." The parent company of Facebook and Instagram went through the painful process of shedding costs via job cuts and other much-needed expense reduction initiatives. Those efforts are now bearing fruit. Meta's sales climbed 16% to $135 billion in 2023, while its net income surged 69% to $39 billion.
Better still, the company's growth is accelerating. Revenue and net profit jumped 25% and 201%, respectively, year over year to $40 billion and $14 billion in the fourth quarter.
Meta's aggressive investments in artificial intelligence (AI) are strengthening its ad-targeting capabilities. At the same time, its massive user base continues to expand. Nearly 3.2 billion people use one of the company's apps every day. That's up 8% compared to the prior-year period.
As a nod to its soaring profits, Meta said it would pay its first-ever dividend. Its initial quarterly cash payment will be a relatively meager $0.50 per share, but it's likely to grow quickly along with the company's earnings.
To further reward shareholders, Meta announced plans to repurchase an additional $50 billion worth of its stock. Buy shares today, and you can position yourself to benefit from this AI-powered advertising leader's colossal new capital return program.
2. Nvidia
Like Meta, Nvidia (NVDA +1.67%) is on an epic bull run. The semiconductor juggernaut designs the cutting-edge chips that power the most advanced AI applications, and business is booming.
NASDAQ: NVDA
Key Data Points
Tech titans like Microsoft and Tesla are stocking up on Nvidia's graphics processing units (GPUs) to run their AI models and related services in their cloud computing facilities. In turn, Nvidia's data center revenue surged a staggering 279% year over year to $14.5 billion in the quarter ended Oct. 29.
Yet some investors are concerned about mounting competition. Several of Nvidia's major customers are developing their own chip designs. But the chipmaker is meeting this challenge head-on. Nvidia is reportedly offering custom chip design services to leading cloud computing, automotive, wireless, and video game companies, according to Reuters. If it's successful in courting some of these large chip buyers, Nvidia could transform a potential threat into an opportunity. Analysts at investment bank Needham peg the market for custom chips at approximately $30 billion.
Nvidia also intends to compete aggressively in the burgeoning market for chips that can run AI-powered apps directly on laptops and other mobile devices. Demand for so-called "local AI" could be enormous; it's expected to drive the expansion of the global personal computer market, which is projected to approach $250 billion by 2028, according to Statista.
With these lucrative opportunities set to fuel its earnings growth in the coming years, Nvidia's stock remains a solid buy today.
