The leaves are falling, and the weather is getting cooler. You know what that means: It’s time to start thinking about next year.
We’re running out of months in 2024, and investors are increasingly focused on what next year will bring and which stocks to buy now.
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With that in mind, let’s turn our attention to three tech stocks that our Motley Fool contributors can’t stop thinking about: Meta Platforms (NASDAQ: META), Shift4 (NYSE: FOUR), and Microsoft (NASDAQ: MSFT).
Jake Lerch (Meta Platforms): My choice is Meta Platforms.
Simply put, Meta is a thriving business that generates ample revenue, profit, and free cash flow. That’s why its stock is up 64% year to date and more than 380% since the start of 2023.
In the company’s most recent earnings report (for the three months ended on Sept. 30, 2024), Meta reported revenue of $40.5 billion, which was up 19% year over year.
To begin with, that’s a staggering amount of revenue (for context, Starbucks generates less than $40 billion in revenue over the course of an entire year). Moreover, Meta is growing that revenue at a breakneck pace of nearly 20%.
Even better for shareholders, Meta converts much of that revenue into profit. The company reported $15.7 billion in net income, representing an increase of 35% from a year ago.
Finally, free cash flow was $15.5 billion, helping to bolster the company’s cash reserves, which increased to $70.9 billion. That’s important because having so much cash in the bank gives Meta the ability to increase shareholder returns via future dividend increases, share repurchases, strategic acquisitions, or capital investments.
Granted, there are concerns for Meta. Regulatory actions in both the U.S. and E.U. could hamper growth or profits. In addition, the company’s headlong charge into the metaverse and artificial intelligence is costly.
Nevertheless, the reason to own Meta shares is its enormous user base. The company has over 3.3 billion daily average users (DAUs), representing about 41% of the world population.
With so many people using one of Meta’s apps every day, the company’s digital ad business is simply too lucrative to ignore. For that reason, I expect Meta to turn in another excellent year in 2025.
Will Healy (Shift4 Payments, Inc.): Despite a long existence, Shift4 is far from becoming a household name, even among the fintech stocks with which it competes. CEO Jared Isaacman founded this company in 1999 to offer a faster payment-processing alternative.