7 Must-Own Stocks to Hold for the Second Half of 2024

Seven firms representing various industries stand out as prospective high-yielders as the market approaches H2 2024. Each one has distinct development drivers and value propositions. These stocks cover a wide range of prospects indicative of the changing market landscape, from semiconductor discoveries to AI development, medicinal breakthroughs, and worldwide consumer brands.

Because of its economical and effective processors, the first one is becoming increasingly popular in the data center and cloud computing sectors. The latter is growing internationally, improving user experiences across its platforms, and making major strides in AI. The third is seeing a rapid increase in profitability and revenue due to the growing demand for AI-powered PCs and an enterprise refresh cycle.

The fourth one provides stability with its substantial interest revenue from floating-rate loans and a deliberate move toward safer first-lien loans. With a varied pipeline in cancer and other therapeutic areas, the fifth one keeps innovating while guaranteeing consistent revenue growth. The sixth one employs strategic initiatives for global expansion in the face of setbacks. Lastly, the seventh shows strong revenue growth and rising user satisfaction.

Must-Own Stocks: AMD (AMD)

Despite a historically weak first quarter (Q1 2024), AMD (NASDAQ:AMD) boosted its share of server CPU revenue thanks to growing cloud deployments and business acceptance. Globally, about 900 public instances are using AMD processors. This is due to the expansion of fourth-generation EPYC processors applied by major cloud providers, including Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Google (NASDAQ:GOOG). Hence, this widespread usage highlights AMD’s expanding market share in cloud computing.

Moreover, strong demand for Ryzen 8000 series CPUs drove 85% year-over-year (YOY) revenue growth for the Client division. Sales of Ryzen desktop CPUs increased by double digits compared to the previous year, while sales of Ryzen mobile CPUs almost doubled. The introduction of Ryzen Pro 8000 CPUs with AI capabilities and performance that lead the industry solidifies AMD’s leadership in the commercial PC market.

Finally, with a 10% yearly rise to $1.7 billion in operating expenditures, AMD’s aggressive R&D and marketing spending to take advantage of AI growth potential is evident. Hence, this strategic investment is essential to continue innovation and keep a competitive edge.

Meta (META)

The Llama 3 model-powered Meta (NASDAQ:META) AI marks a breakthrough in artificial intelligence, with its 8 billion and 70 billion parameter models being acknowledged as best-in-class. In addition, the 400+ billion parameter model’s continuous evolution is expected to establish industry standards.

Furthermore, positive feedback has been received from tens of millions of people who have previously interacted with Meta AI. This early widespread acceptance is indicative of the AI’s efficacy and user-friendliness. Meta AI’s potential to produce real-time, high-quality pictures and animations greatly improves the user experience on several platforms, including Facebook, Instagram, WhatsApp, Messenger, and more. Hence, these improvements raise engagement levels and draw in additional people.

By providing early copies of its products to a select group of users for feedback and further enhancements, Meta’s strategy guarantees that the final product will be improved before being made available to a larger audience. In the past, this approach has worked well for product launches. Therefore, the methodical extension of Meta AI into other languages and nations suggests a well-organized strategy to boost user base and engagement on a worldwide scale.

Must-Own Stocks: Intel (INTC)

Intel (NASDAQ:INTC) has released positive Q1 earnings, with sales matching expectations and EPS above forecasts. Revenue for the first quarter increased by 9% YOY to $12.7 billion. Consequently, the business exceeded the forecast by 5 cents and produced a non-GAAP EPS of 18 cents, demonstrating that Intel’s methodical approach to cutting costs has the desired effect. Indeed, strong profitability and sound financial standing are reflected in higher-than-expected EPS, which is essential to finance the following expansion projects.

Additionally, Intel expects several important variables to support sequential sales growth throughout the year and into 2025. AI PCs (AIPCs) are gaining pace due to their enterprise renewal cycle. Since December 2023, over 5 million AI PCs have been shipped due to the release of Intel Core Ultra CPUs. By the end of 2024, Intel anticipates exceeding its previous prediction of 40 million AI PCs. 

Overall, these patterns show a strong market need for AI-driven solutions and new enterprise technologies, two crucial areas for Intel. Thus, they exceed expectations due to a rising market share and robust product acceptability.

Oaktree Specialty Lending (OCSL)

Oaktree Specialty Lending (NASDAQ:OCSL) announced a Net Investment Income (NII) of 56 cents per share (Q2 2024), less than the 57 cents per share recorded in the prior quarter. This minor decline indicates the company’s continued strong earnings. The timing of capital deployments and repayments over the quarter caused the marginal decline. This shows that timing variations may affect quarterly profits despite the high overall earnings power.

Additionally, the company’s strategic change toward first-lien loans dropped the weighted average portfolio spread by 0.10% throughout the quarter. On Sept. 30, 2022, first-lien investments comprised 71% of the portfolio; second-lien investments dropped from 16% to 5% by the same date. Lastly, although it may result in somewhat lower returns, this move to safer, first-lien loans is a risk mitigation approach that improves the portfolio’s credit quality.

Must-Own Stocks: Pfizer (PFE)

For Q1 2024, Pfizer (NYSE:PFE) announced total revenues of $14.9 billion. Pfizer managed an 11% operating revenue gain, excluding COVID-related medications (Comirnaty and Paxlovid), despite a 19% YOY fall in demand for these products. The company’s non-COVID product portfolio demonstrates good underlying performance across various therapeutic areas, which drove this rise. Undoubtedly, this operational growth reflects Pfizer’s ability to shift its focus from its COVID-19 pandemic revenue drivers to other business areas. This indicates the company’s resiliency and smart reallocation of resources.

Moreover, Pfizer’s cancer business showed noteworthy expansion, with oncology sales rising operationally YOY by 19%. Commercial solid execution and integration of Seagen’s products greatly supported this expansion. This rise is indicative of Pfizer’s compelling foray into the cancer sector. Here, it used both internal development and acquisitions to propel growth. Lastly, this tendency is further supported by the acceptance and high demand for novel medications like Padcev and the ongoing efficacy of well-established therapies like Xtandi.

Starbucks (SBUX)

Starbucks (NASDAQ:SBUX) maintained its global development efforts in Q2 2024. Despite operational difficulties, the company added 364 net new locations to its total count of 38,951 worldwide. Notably, the U.S. and China remain important markets for the corporation, accounting for 61% of its global portfolio. Starbucks’ confidence in its long-term development prospects and dedication to seizing new market possibilities are evident in this planned expansion.

Additionally, Starbucks’ digital initiatives — such as Mobile Order & Pay (MOP) and the Starbucks app — keep boosting convenience and consumer engagement. Customers’ significant acceptance rate of MOP reflects that 31% of all transactions during the quarter were MOP transactions. In addition, Starbucks intends to make the Starbucks app available to all users in July to improve accessibility and encourage the acquisition and retention of consumers via digital channels.

Finally, to lessen the strain on its margins, Starbucks focuses on achieving cost reductions and operational efficiency.

PayPal (PYPL)

PayPal’s (NASDAQ:PYPL) EPS increased significantly, rising 27% on a non-GAAP basis YOY to $1.08 in Q1 2024. EPS would have climbed by around 20% even under the company’s previous non-GAAP methodology. This did not account for the impact of stock-based compensation. Furthermore, this substantial rise in earnings implies that PayPal’s business model is extremely successful and has the potential to yield significant returns for investors.

Moreover, the number of monthly active accounts rose by 2% YOY to 220 million, demonstrating consistent user involvement with the platform. On a trailing 12-month basis, the number of transactions per active account climbed by 13% to 60, indicating a rise in user engagement and transaction volume.

Finally, PayPal’s strategy priority is expanding its services for small and medium-sized businesses (SMBs) and major organizations. Thus, programs like the PayPal Complete Payments platform, intended for SMBs, have gained traction, as 7% of SMB activity is currently being processed using this platform.

As of this writing, Yiannis Zourmpanos held long positions in AMD, META, INTC, OCSL, PFE, SBUX and PYPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.