One of the best ways to build lasting wealth in the stock market is to buy the shares of strong companies with exceptional growth prospects. To help you position yourself for a lucrative 2024, here are two superior businesses that are generating handsome returns for their investors.
1. Alphabet
The digital advertising market will top $870 billion by 2027, up from roughly $600 billion in 2023, according to Statista. Google's dominance of the internet search industry places Alphabet (GOOGL 0.50%) (GOOG 0.61%) in a strong position to profit as more ad spending shifts online in the coming years.
NASDAQ: GOOGL
Key Data Points
YouTube offers Alphabet's shareowners another excellent way to gain from the growth of digital ads. With a stunning 2.7 billion users that collectively consume 1 billion hours of content on its platform every day, according to DemandSage, the massively popular video-sharing platform is an indispensable platform for digital marketers.
Moreover, YouTube is a powerful growth driver. Its sales were up more than 20% year over year to $8 billion in the first quarter. Investors can expect this figure to climb steadily in the years ahead. Demand Sage forecasts that YouTube's user base will grow to 2.85 billion by 2025. Additionally, YouTube's ad sales could receive a boost if rival TikTok is banned from operating in the U.S.
Alphabet's shareholders also stand to benefit from the rapid adoption of artificial intelligence (AI). Soaring demand for AI model training services and other machine learning workloads is fueling the growth of Google Cloud, the company's computing infrastructure division. Google Cloud's revenue leaped 28% year over year to $9.6 billion in the first quarter. Its operating profits, in turn, rose nearly fivefold to $900 million.
Here, too, Alphabet has a tremendous long-term expansion opportunity. The global cloud computing market will grow to a staggering $2.5 trillion by 2032, up from $495 billion in 2022, according to Acumen Research and Consulting.
With so much room for profitable growth still ahead, Alphabet's stock is a solid buy today. Management appears to agree. On April 25, the company boosted its share repurchase program by a whopping $70 billion. Alphabet also said it would begin paying a dividend, which should place its stock on the radar of more income-focused investors.
2. Eli Lilly
The U.S. Food and Drug Administration (FDA) warns that obesity can lead to dangerous illnesses like diabetes and heart disease. Eli Lilly (LLY +0.05%) wants to combat these worrisome health trends by helping people lose excess body fat. In turn, its game-changing weight-loss treatment, Zepbound, might just become the best-selling drug of all time.
NYSE: LLY
Key Data Points
Zepbound is an incretin-based therapy that works by stimulating hormones that can decrease a person's appetite and, by extension, the amount of food he or she eats. A 72-week clinical study showed that people who received the highest dose of the once-weekly injection lost an average of 48 pounds.
Better still, trial participants who were administered Zepbound and implemented a diet and exercise plan improved their cholesterol and blood pressure profiles. Other clinical trials showed that the active ingredient in Zepbound, tirzepatide, can improve blood glucose levels in people with type 2 diabetes.
Due to these promising results, Eli Lilly is expected to enjoy enormous demand for its new drugs. The healthcare titan's sales and profits surged by 26% and 67%, respectively, to $8.8 billion and $2.2 billion in the first quarter.
Looking ahead, Eli Lilly's earnings per share are forecasted to increase by more than 50% annually over the next half-decade. Peering even further into the future, investment bank Goldman Sachs posits that sales of anti-obesity drugs could grow to a whopping $100 billion by 2030. Buy shares today, and you can position yourself to profit alongside Eli Lilly as it works to satisfy the torrid demand for its new weight-loss treatments.
