2024 promises to be a lucrative year in the stock market for many reasons. First of all, the Federal Reserve is on track to begin easing off in its efforts to cool an overheated economy. Interest rates are set to decrease with multiple projected cuts on the horizon.
Beyond that though, the world continues to evolve at a rapid pace with multiple megatrends promising to galvanize strong growth. Perhaps none is more salient and influential than artificial intelligence. However there are many other trends to consider including sustainability, mobility, demographics, geopolitics and more. The biggest trends, the so-called megatrends, are particularly worth paying attention to.
Joby Aviation (ACHR)
A recent article in Forbes demonstrates why investors should be inherently interested in Joby Aviation (NYSE:ACHR) and its stock. The article paints a picture of an airline passenger who has just disembarked from a Hypersonic flight taking 2 hours from New York to London. That passenger then jumps into an urban air mobility drone, avoiding rush hour traffic, and arrives home in 20 minutes.
Urban air mobility has emerged as one of the megatrends to pay attention to in 2023. Firms including Joby Aviation are developing electric vertical takeoff and landing vehicles (eVTOLs) at a rapid pace. These firms have established strong relationships with airline companies, Joby with Delta (NYSE:DAL), that promise to revolutionize commercial flight.
The company undertook exhibition flights in New York City in November. The company expects to drastically decrease the time required to and from major airports in the area. For example, it anticipates that a flight to JFK from the surrounding boroughs will decline from 1 hour to 7 minutes. Joby Aviation continues to demonstrate the volume potential of its operations at airports. Joby recently demonstrated that it would be possible to operate 120 flights per hour in and out of busy airports.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) Is another stock to consider that leverages the drastic changes occurring across the field of mobility. Electric vehicles continue to displace internal combustion engine vehicles although their growth has not been linear. I am, of course, referring to the recent collapse in lithium prices and EV sales.
In short, the electrification of vehicles is not going to stop. EV adoption is still relatively early overall but investors should rest assured the industry is not dying. Lithium did however face a steep price correction in 2023 that saw prices decline by 80%. However with every decline there is always a chance of rebound. Current expectations are that the rebound in lithium prices will begin either in 2024 or perhaps 2025.
That coincides quite well with Lithium Americas and its future production plans. The company owns the rights to Thacker Pass which is the largest lithium deposit in the Western hemisphere. Lithium Americas commenced construction in June of this year and anticipates lithium mining operations to start sometime in 2026. It isn’t hyperbolic to suggest that investing in Lithium Americas could produce 10x returns.
Nvidia (NASDAQ:NVDA) could pop up on any megatrend stock list for a number of reasons. The company is intimately connected with all things technological being that it is the leading producer of the most in-demand chips. Primarily though, Nvidia promises to provide a strong start to 2024 because of artificial intelligence.
Of course, artificial intelligence is a megatrend that has taken off in 2023. Its rapid emergence has turned Nvidia into an even more important company. As strong as Nvidia’s performance has been in 2023, 2024 appears to be just as strong. The analysts covering Nvidia’s shares anticipate that prices could rise by 50% again, if not more.
Nvidia has cornered the market for AI chips and demand for its h100 chips has been staggering. That said, the company is expected to launch its updated h200 chips in 2024 that promise to further consolidate its lead over the AI field.
AMD (NASDAQ:AMD) has to be the other stock to consider in relation to the artificial intelligence megatrend. While the company continues to play second fiddle to Nvidia, it has emerged as a legitimate competitor.
Back in mid-November the company announced an event to introduce its MI300 GPU accelerator. Then, weeks later, in early December the company released the new chips which will be available in 2024. The news has sent AMD shares from just below $100 to nearly $150 as I write this.
It has become clear that major companies are very interested in AMD’s chips for their application to artificial intelligence. Major purchasers including Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) have noted that they are willing to switch from Nvidia’s h100 chips to AMD’s mi300 chips once they are available. The news is a clear indication that major tech firms believe in AMD and are also frustrated with Nvidia for its pricing. Overall though, it’s a strong indication that AMD is going to remain as a potent challenger in the AI conversation.
Qualcomm (NASDAQ:QCOM) is another important tech company that touches on many of the megatrends of the near future. The stock is a wise choice for many reasons including its stability and dividend as well as its relationship with Apple (NASDAQ:AAPL).
For the purposes of this conversation though, I’ll be talking about Qualcomm in relation to its 5G business. 5G is one of the mega trends that has emerged over the past few years. It promises to rapidly increase the speed of communication and the degree of connectivity. The push toward greater and greater connectivity is not going to slow and it is estimated that $20,000 satellites will be launched this decade in order to facilitate that increased connectivity.
Qualcomm notes that 5G is imperative for the Continue development of the digital economy. In fact, the company believes that the overall value associated with 5G will exceed $13 trillion by 2035.
IBM (NYSE:IBM) Has emerged as the company that is most closely associated with the development of quantum computing. Quantum computing is a nascent technology that promises to fundamentally change computing overall. The field leverages quantum mechanics to solve problems that are too complex for current classical computers to solve.
Quantum computing is an incredibly complex field and those who would like to learn more about it should do so through this link.
The important thing to understand for the layman investor like myself is that IBM is the leader in quantum computing. Thus, if any company is best positioned to take advantage of this megatrend, IBM is it.
IBM’s industry-best qubit count is expected to more than quadruple by 2025. The company is developing quantum computing hardware as well as software including the cloud-based quantum computing services. If quantum computing lives up to its billing then IBM can grow rapidly. For now, current investors can get a dividend that yields more than 4% making IBM shares attractive for income investors and those looking for future growth.
MercadoLibre (NASDAQ:MELI) often enters discussions that relate to e-commerce and fintech stocks. It’s probably the clearest example of a company that is showing strong results in both regards. The company has emerged as the dominant force in Latin American e-commerce and created a strong, rapidly growing payments platform in the process.
MercadoLibre’s results in that regard are incredibly impressive. During the third quarter, revenues increased by more than 69%, reaching $3.8 billion. Meanwhile, gross payment volume grew by 121% to $47.3 billion. And while Mercado Libre deserves recognition for those results, there are other megatrends that I want to focus on.
Instead, it is the megatrend of emerging markets. Economists continue to note that emerging markets have vast untapped potential. World superpowers including the United States and China face significant problems which has led investors to look at emerging markets with a greater focus. Thus, firms like MercadoLibre are well positioned due to their exposure to the emerging market trend as well as those in fintech and commerce.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.