Outperforming S&P 500: 7 Top Growth Stocks to Watch in 2024

This article highlights seven growth stocks that have surpassed the S&P 500's performance in 2024. It discusses the S&P 500's composition and inclusion criteria, noting that outperforming the index is a challenging yet attainable goal. The article focuses on Walmart (WMT) as an example, emphasizing its affordable products, resilience during economic downturns, and a 30% year-to-date gain. It also mentions Walmart's recent 9% dividend hike and strong Q1 FY25 financial results, with revenue up 6% and adjusted EPS up 22.4%.

The S&P 500, a widely-followed benchmark for the U.S. stock market, has witnessed the emergence of seven tech-focused giants that have surpassed its performance in 2024 [1]. These seven companies, known as the "Magnificent Seven," are not only leading their respective industries but also collectively contributing a significant portion to the S&P 500's overall growth.

Concentration within the S&P 500 has been a topic of concern for investors. However, the impact of these companies on the index's performance is not necessarily a double-edged sword [2]. While their related businesses may not be directly affected simultaneously, the sheer value of these companies could potentially influence the broader market.

Let's delve into the performance and key characteristics of these seven growth stocks that have outperformed the S&P 500 in 2024.

1. Microsoft Corporation (MSFT): Microsoft, a leading player in the technology sector, has reported a year-to-date gain of over 30%. Its affordable products, such as Office 365 and Azure, cater to various industries and have proven resilient during economic downturns. Microsoft's recent 9% dividend hike and strong Q1 FY25 financial results, with revenue up 6% and adjusted EPS up 22.4%, further solidify its position as a growth stock to watch.
2. Apple Inc. (AAPL): With a market capitalization of over $2 trillion, Apple is another tech giant that has outperformed the S&P 500. Its innovative products, such as the iPhone, iPad, and Mac, have consistently captured the attention of consumers and investors alike. Apple's focus on enhancing user experience and expanding its services offerings, like Apple TV+ and Apple Music, positions it well for continued growth.
3. Nvidia Corporation (NVDA): Nvidia, a pioneer in graphics processing units (GPUs) and artificial intelligence (AI) technologies, has seen its stock price surge in 2024. The company's GPUs have found applications in various industries, from gaming and automotive to healthcare and research. Nvidia's ongoing investment in AI and its expanding product portfolio position it well for future growth opportunities.
4. Alphabet Inc. (GOOGL and GOOG): Alphabet, the parent company of Google, has been a key driver of growth in the tech sector. Its diverse range of businesses, including Google Search, YouTube, and Google Cloud, caters to various user needs and industries. Alphabet's strong financial position and ongoing investment in emerging technologies, like AI and quantum computing, position it well for continued growth.
5. Amazon.com, Inc. (AMZN): Amazon, the world's largest e-commerce platform, has also outperformed the S&P 500 in 2024. Its vast selection of products, affordable pricing, and fast shipping have made it a go-to destination for consumers. Amazon's ongoing investment in its cloud services, like Amazon Web Services (AWS), and its expansion into new markets, like healthcare and advertising, position it well for future growth opportunities.
6. Meta Platforms Inc. (META): Formerly known as Facebook, Meta Platforms is another tech giant that has seen its stock price surge in 2024. Its diversified range of products, including Facebook, Instagram, and WhatsApp, cater to various user needs and industries. Meta's ongoing investment in emerging technologies, like virtual and augmented reality (VR/AR), positions it well for future growth opportunities.
7. Tesla, Inc. (TSLA): Tesla, the leading electric vehicle (EV) manufacturer, has been a standout performer in the tech sector in 2024. Its innovative EVs, solar panels, and energy storage solutions have disrupted the traditional automotive industry and captured the attention of investors. Tesla's ongoing investment in autonomous driving technology and its expansion into new markets, like Europe and China, position it well for future growth opportunities.

In conclusion, the "Magnificent Seven" growth stocks, Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta Platforms, and Tesla, have not only outperformed the S&P 500 in 2024 but also collectively contributed a significant portion to its overall growth. Their innovative products, strong financial positions, and ongoing investment in emerging technologies position them well for continued growth opportunities. As always, investors are advised to consider their risk tolerance and investment objectives before making any investment decisions.

[1] Rekenthaler, K. (2024, July 1). How Magnificent 7 affects S&P 500 stock market concentration. CNBC. https://www.cnbc.com/2024/07/01/how-magnificent-7-affects-sp-500-stock-market-concentration.html
[2] Fool.com. (2024, July 9). SP 500 Magnificent Seven Growth Stock Value. https://www.fool.com/investing/2024/07/09/sp-500-magnificent-seven-growth-stock-value/