The stock market has risen over the past year, with Nasdaq Composite An increase of more than 27% since last June. The growth is a welcome development after the Covid-19 pandemic and economic downturn in 2022, which saw the same index fall by 33% during a challenging year.
Investors have become optimistic because easing inflation and advances in emerging markets such as artificial intelligence (AI) could pave the way for a profitable future for many companies.
As leaders in the consumer market with billions of loyal users, Costco wholesale (NASDAQ: COST) And Amazon (Nasdaq: AMZN) They have promising expectations. Its shares are up 61% and 45% respectively over the past 12 months, yet it doesn't appear to be close to reaching its cap. Costco is expanding rapidly and has barely scratched the surface of its venture abroad. Meanwhile, Amazon's online retail business is booming alongside huge investment in artificial intelligence.
So, here are two high-flying stocks I would buy right now without hesitation.
1. Costco
Costco has come a long way since its founding 40 years ago, when it opened its first store in San Diego, California. The retail giant has captured consumers around the world with its unique model of providing access to wholesale pricing for the cost of an annual membership.
The company's success has made it one of the best retail investments in the past five years, outperforming competitors such as Amazon, WalmartAnd Goal In stock growth. While past gains are not always an indication of what's to come, recent earnings indicate a profitable future for Costco.
The retail giant posted its earnings results for the fiscal third quarter of 2024 on May 30. Revenue for the period ending May 12 jumped 9% year over year to $57 billion. International sales continued to be the largest driver of growth, with revenues from abroad rising nearly 9% compared to 6% domestically.
Costco membership increased 8% to more than 74 million in the third quarter, a promising accomplishment as the global renewal rate reaches 90%. The company has 878 locations in 14 countries and is adding more every year.
Costco is on an exciting growth path that you won't want to miss. And with Price to sales (P/S) ratio. With a value of 1.4, the company's stock is an excellent value and I would buy it without hesitation.
2. Amazon
Amazon has created more than a few breakout companies over the past year, drumming up investors with its booming e-commerce business and expanding role in artificial intelligence.
Macroeconomic headwinds in 2022 caused sharp declines in consumer spending, with Amazon's retail sales hit particularly hard. However, the amazing recovery has proven the reliability of the company's business model and its value as a long-term investment.
Amazon announced its first-quarter 2024 earnings on April 30. Revenue for the quarter increased 13% year-over-year, beating analysts' expectations by $750 million. However, the most impressive growth came in the form of operating income, which rose 221% to more than $15 billion.
The retailer's profits rose significantly over the past year thanks to positive growth in its retail segments and cost-cutting measures. For example, the first quarter of 2024 saw Amazon's international segment return to profitability with operating revenue of $903 million, which represented a significant improvement over the $1 billion loss it reported the previous year. Meanwhile, operating income in North America rose 454% year over year.
Amazon's e-commerce verticals are expanding rapidly and show no signs of slowing down. However, the best reason to consider a long-term investment in Amazon is that it is highly profitable Cloud businessAmazon Web Services (AWS). The platform has a leading market share in cloud computing, an industry with huge growth potential amid a boom in artificial intelligence.
In the first quarter of 2024, AWS was responsible for 62% of Amazon's operating income despite having the smallest portion of revenue among its three segments. The cloud service gives the company a strong role in technology and artificial intelligence and will likely continue to boost profits for years.
This chart shows that Amazon's P/E is lower than many of its largest competitors, suggesting that its stock could be trading at a discount. This fact, combined with a booming retail business and a promising niche in artificial intelligence, makes Amazon a no-brainer at the moment.
Should you invest $1,000 at Costco Wholesale now?
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Susan Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dani Cook He has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Costco Wholesale, Microsoft, Target, and Walmart. The Motley Fool recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has Disclosure policy.
2 high-flying stocks that I would buy now without hesitation Originally published by The Motley Fool