The S&P 500 started 2024 with a solid 4.5% rise, following a successful 2023. The main question for investors is: are these gains transient, or is this the start of another lasting bull market?
Market legend and billionaire asset manager, Ken Fisher, has been watching current conditions, and he has some opinions about where we’re likely to go from here.
“A strong January for global stocks has not silenced doubters,” he says, and goes on, “Higher-for-longer interest rates! Global economic malaise! Escalating regional wars! You know all the reasons bears say this bull market is definitively doomed, extending their 2023 arguments. Wrong again. Markets move on what people do not widely know and watch – surprises, positive or negative. This year, those surprises will be to the upside – shocking everyone again, like 2023.”
But words are cheap, and money talks, so let’s take a look at two of the mega-cap tech stocks that Fisher has been buying into – Nvidia (NASDAQ:NVDA) and Meta Platforms (NASDAQ:META) – in anticipation of solid upside gains this year. A closer look may show us why Fisher is willing to buy big.
Nvidia
First up, on our list of Fisher’s picks, is Nvidia, the fast-growing leader in the semiconductor chip industry. Nvidia is currently the third-largest publicly traded company in the world – behind only Microsoft and Apple. The stock has been rising at a fast pace over the past several years; it is up more than 250% in the last 12 months.
The main driver of Nvidia’s success in recent years has been the high quality of the company’s chipset products. Nvidia has long been a leader in the GPU segment, and these chips, originally designed to meet the processing needs of high-end computer graphic programs, have found ready audiences among computer gamers, professional graphic designers, data center operators, and – more recently – in AI applications. Each of these fields requires high capacity chips, and Nvidia has built a reputation as the go-to name for those users.
The data center industry has been a particularly bright spot for Nvidia. The company’s market share in GPUs for the data center industry provides about 83% of the Nvidia’s total revenues. In raw numbers, Nvidia reported $18.4 billion in sales to data centers in its fiscal 4Q24 report. That marked a year-over-year increase of 409%.
Overall, Nvidia’s fourth quarter of fiscal 2024 saw a total top line of $22.1 billion, a company record and a 265% y/y increase. Q4 revenues were also $1.55 billion better than had been expected. At the bottom line, Nvidia realized earnings of $5.16 per share in non-GAAP EPS; this beat the forecast by 52 cents per share.
As for billionaire investor Ken Fisher, he is clearly bullish on Nvidia. In the last calendar-year quarter, 4Q23, he bought 594,243 shares of the stock, bringing his total holding in NVDA to 8,943,979 shares. At current prices, Fisher’s holding in Nvidia shares is valued at $6.58 billion.
In addition to Ken Fisher, Nvidia has caught the eye of Loop Capital analyst Ananda Baruah. The 5-star expert is upbeat on Nvidia, basing his stance on the company’s solid data center business, it’s exposure to the growing AI industry, and its potential to continue realizing outsized gains.
“Our work suggests NVDA has material upside to Street revenue and EPS through CY2024/FY2025 and into / through CY2025/FY2026 (Figures 1 & 3) driven by Data Center GPUs). Specifically we’re looking for revenue & EPS CY2024/FY2025 & CY2025/ FY2026 of $132.4B & $30.00 (vs Street of $95.8B & $21.76) and $175.6B & $40.00 (vs Street of $110B & $24.84). We also believe there is legitimate upside potential to even our above Street estimates via both revenue and GM expansion. For those looking at quarterly trends … NVDA’s 1. Quarterly results vs Street and 2. Guidance vs. Street, which shows a distinct pattern of pronounced beats and raises since Gen AI kicked off 12 months ago,” Baruah opined.
Quantifying this stance, Baruah puts a Buy rating on NVDA shares, along with a $1,200 price target that implies a robust 63% gain in the next 12 months. (To watch Baruah’s track record, click here)
High-end tech stocks never fail to gain love from Wall Street, and Nvidia shares have 38 recent reviews from the Street’s analysts. These reviews include 36 Buys and just 2 Holds, for a Strong Buy consensus rating. (See Nvidia stock forecast)
Meta Platforms
The next stock we’re looking at is Meta, the parent company of Facebook and the most recent member of the ‘trillion-dollar club.’ Despite boasting a market cap of $1.21 trillion, making it the smallest of these mega-caps, Meta still holds the position as the world’s sixth-largest public company.
In addition to Facebook, its flagship social media concern, Meta also owns Messenger, Instagram, and WhatsApp. In the company’s last quarterly report, covering Q4 and the full year 2023, Meta reported increased audiences across all of its social media platforms. For December 2023, the company had a DAP – family daily active people – totaling 3.19 billion, marking an 8% year-over-year increase; for the month, the monthly active people (MAP) were up 6% to 3.98 billion. Facebook makes up the largest share of this audience – the platform saw 2.11 billion daily active users in December 2023, marking a 6% increase year-over-year. Facebook’s monthly active users (MAUs) grew by 3% year-over-year to reach 3.07 billion.
For Meta, active users are a key metric. The company leverages these numbers to generate revenue from advertising, and in 4Q23, Meta generated $40.11 billion in total revenues, marking a 25% year-over-year increase and surpassing expectations by $940 million. Annual revenue was up by 16%, reaching $134.9 billion. The company’s quarterly EPS, by GAAP measures, amounted to $5.33 per share, exceeding the forecast by 39 cents per share. Shares in META have gained more than 33% so far this year, and approximately 175% over the past 12 months.
While these figures represent solid returns, for return-minded investors, there is an even better option. In its quarterly report, Meta announced the initiation of a regular quarterly dividend. The first payment is set at 50 cents per share, scheduled for a March 26 payout. The annualized rate of $2 provides a modest forward yield of 0.42%. The key point here is not the current yield, but the stronger commitment to capital return. The dividend announcement was accompanied by a $50 billion increase in the company’s share repurchase authorization.
All of this provides an interesting backdrop to Ken Fisher’s heavy buy-in to Meta. In 4Q23, the billionaire added 414,520 META shares to his portfolio; his total stake in Meta now stands at 5,456,958 shares, worth $2.55 billion.
Turning to the analysts, we’ll check in with Tigress Financial’s 5-star analyst, Ivan Feinseth, who sees Meta’s lead in social media and inroads to AI as key points for the stock.
“META is well-positioned to benefit from ongoing innovation; increasing AI functionality integration and new product introductions will drive further increases in user engagement and ongoing acceleration of revenue growth. META continues to benefit from its dominant digital advertising position and growing user engagement. META’s ongoing advertising success continues to be driven by its strong click-to-action conversion, reflecting improvements in advertising performance due to engaging in-platform advertising experiences connecting advertisers with their marketing data and leveraging AI across its advertising platform,” Feinseth opined.
To this end, Feinseth gives META shares a Strong Buy rating with a $575 target price, implying a 23% gain by the end of this year. (To watch Feinseth’s track record, click here)
From the Street generally, there are 41 recent reviews of META stock, breaking down to 38 Buys, 2 Holds, and 1 Sell for a Strong Buy consensus. The shares are trading for $468.03, with a $529.02 average price target pointing toward a 13% potential upside on the one-year horizon. (See Meta stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
