When the S&P 500 is up as much as it already is this year, investors demand growth. And some stocks are about to deliver — and then some.
A dozen stocks in the S&P 500, including Nvidia and Super Micro Computer plus Micron Technology, are expected to post 30% or higher revenue growth in the soon-to-be reported first quarter, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
And that's a whopper of a growth rate — roughly 10-times more than average. S&P 500 revenue is only seen rising 3.5% in all of the S&P 500, says John Butters of FactSet.
"Things will begin to pick up in pace later this week and early next week as companies start to report (first quarter) 2024 earnings," says Bespoke Investment Group.
Looking For Solid Growth In S&P 500
The S&P 500 already returned roughly 10% this year. And 2024 isn't even half over.
Solid growth is needed to justify such a rise in valuations. While the S&P 500's revenue growth isn't blistering in the first quarter, there are solid outliers. Communication services, information technology and real estate companies in the S&P 500 are seen putting up the most growth, says Butters.
Expect 7.3% and 7.2% revenue growth respectively from communication services and tech, respectively. And some individual S&P 500 companies are seen doing even better still.
All In On AI
If you're looking for off-the-hook growth, look no further than AI. Kingpin Nvidia is expected to post 237.6% higher revenue in the first quarter of $24.3 billion. That incredible growth backs up the stock's blistering 72% gain this year.
Also in the AI theme is Super Micro Computer. The stock is up 218% this year as investors see big things happening in its AI business. Analysts see it coming too, calling for 207% first-quarter revenue growth. That's second only to Nvidia in the S&P 500. Micron, also, is on pace to report 45% higher revenue as many of its chips find their way in AI models.
It's Not Just AI
AI might be the hot spot for growth, but it's not alone. In real estate, Extra Space Storage is expected to boost revenue by nearly 59%. And Las Vegas Sands keeps cashing in on the rise of gambling with nearly 39% higher revenue expected in the first quarter.
And with growth like this, it's easier for S&P investors to justify paying current S&P 500 valuations.
Top S&P 500 Growth
For the first quarter of 2024
| Company | Ticker | Q1 2024 revenue growth (forecast) | Sector |
|---|---|---|---|
| Nvidia | 237.6% | Information Technology | |
| Super Micro Computer | 207.1% | Information Technology | |
| Extra Space Storage | 58.7% | Real Estate | |
| Qorvo | 46.4% | Information Technology | |
| Micron Technology | 44.9% | Information Technology | |
| Las Vegas Sands | 38.8% | Consumer Discretionary | |
| First Solar | 38.4% | Information Technology | |
| Xylem | 37.9% | Industrials | |
| Broadcom | 37.1% | Information Technology | |
| Newmont | 35.6% | Materials | |
| Lamb Weston Holdings | 31.9% | Consumer Staples | |
| Hess | 31.0% | Energy |
