There are 77 U.S.-listed stocks with market caps north of $1 billion that have more than doubled through the first nine months of this year. Most of them won't double again, but I want to single out three of them that I think can continue rallying through the final three months 2024.
Nvidia (NVDA +1.73%), Sweetgreen (SG +1.89%), and Sea Limited (SE 2.15%) can potentially double again in the fourth quarter. Let's take a closer look at these high-flying names that may have no plans to land anytime soon.
NASDAQ: NVDA
Key Data Points
1. Nvidia: Up 145%
Kicking off this list with the country's third most valuable company by market cap may seem brazen. It suggests that Nvidia will become the first company to top a market cap of $4 trillion, $5 trillion, and likely $6 trillion -- in the next three months. However, none of the market behemoths is growing as quickly as Nvidia. Revenue has more than doubled in each of the past five quarters, and that includes more than tripling in three of those reports.
Nvidia has come a long way from when it was simply the market leader in graphics processing units. It has become the obvious play in artificial intelligence. It was already setting itself apart with essential hardware for everything from virtual reality to autonomous driving. It's the top dog in AI chips, and business is booming as companies scramble to gain a competitive edge by leading in AI.
Image source: Getty Images.
The top line won't be growing at a triple-digit clip forever, though. Nvidia's own guidance calls for 79% in revenue growth in the current quarter that it should report in late November. Wall Street pros then see the top line slowing to 42% next fiscal year.
Nvidia also isn't cheap. It's trading for 43 times this fiscal year's projected earnings and 30 times next year's target. However, with Nvidia routinely trouncing expectations and analysts scrambling to raise their projections, the stock is probably cheaper than today's forward-looking models suggest.
Looking out just to the fiscal third quarter that will be announced next month, we see that analyst earnings estimates have risen from $3.39 to $4.02 per share in just the past three months. A lot has happened in that time. A lot can happen in the next three months.
It's all tailwinds for AI chips and the buildout of data centers. There is going to be a lot of money going to work to generate next-gen computing power, and Nvidia is in the driver's seat. With Nvidia's board authorizing another $50 billion in share buybacks this past summer, a pretty good authority seems to think that the shares aren't expensive after all.
NYSE: SG
Key Data Points
2. Sweetgreen: Up 214%
Let's go from AI chips to green goddess ranch potato chips. Sweetgreen operates a growing chain of fast-casual eateries serving premium salads. It sounds simple, but Sweetgreen has actually been a better stock than Nvidia this year. It has more than tripled through the first nine months of the year.
Sweetgreen has been thriving after the initial pandemic-related slump that affected most eateries. It has rattled off 13 consecutive quarters of better than 20% growth. Brisk expansion and positive comps are combining to deliver robust top-line growth. The bottom line is improving, but actual profitability is still a couple of years away.
Sweetgreen's surge this year is largely the result of its starting line. Sweetgreen went public at $28 three years ago, but it fell to the pre-teens by the end of last year. Despite more than tripling this year, the shares are just 25% higher than its IPO. The future is bright, and a major catalyst right now is that companies are calling employees back to the office. Sweetgreen is a popular lunch option for health-conscious workers, and the chain even has a program where it can set up dedicated outposts in large office buildings to enable lunchtime deliveries in bulk.
NYSE: SE
Key Data Points
3. Sea Limited: Up 133%
With a 133% gain this year, Sea Limited is the laggard of the lot. Sea Limited is a player in e-commerce, online gaming, and fintech. The Singapore-based company is benefiting from the recent surge in Asian stocks, but it's a global player moving higher on its own merits.
Revenue surged at least 20% in all three of its segments in its latest quarter. Sea Limited was dogged by red ink for a long time, but it finally turned profitable last year. Analysts see earnings per share more than tripling this year and nearly tripling again in 2025. Sea Limited is trading for 47 times next year's projected earnings. It may not seem like a bargain here, but the stock would have to nearly quadruple to revisit the all-times it hit three years ago. It also trades at a reasonable revenue multiple of less than 4. Momentum is strong right now, and the ceiling is high.
