- July is expected to be another eventful month on Wall Street.
- Identifying favorable opportunities becomes paramount in the current environment.
- As such, investors should strongly consider adding Apple, Alphabet, and Amazon to their portfolio in July.
- Looking for more actionable trade ideas? The InvestingPro Summer Sale is live: Subscribe for under $8/month!
As we enter the second half of 2024, savvy investors should consider positioning their portfolios with high-quality mega-cap tech stocks poised for strong performance.
In particular, Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) stand out as must-own stocks for July. These tech giants not only have a history of robust returns during the month, but they also have several catalysts on the horizon that could drive their share prices higher.
Now, by leveraging the advanced research and analysis tools available through InvestingPro, let's delve deeper into what makes the three tech behemoths we plan to discuss below compelling opportunities for investors as a new month kicks off.
Looking for winners beyond the mega-cap space?
With ProPicks' state-of-the-art AI financial modeling, you can get your hands on a list of 90+ winners before they rally higher. Subscribe now for less than $8 a month as part of our summer sale using this link and follow the strategy that more than doubled the S&P 500's gain so far this year!
1. Apple
- 2024 Year-To-Date: +14.5%
- Market Cap: $3.38 Trillion
Apple stock ended at a new all-time high of $220.37 on Tuesday, above the prior record peak of $220.20 from June 12. Shares are up 14.5% year-to-date.
Source: Investing.com
At current levels, the Cupertino, California-based consumer electronics conglomerate has a market cap of $3.38 trillion, making it the second most valuable company trading on the U.S. stock exchange.
July Historical Performance: Apple boasts an impressive 100%-win rate over the last eight Julys, with an average return of +8.2% during the month dating back to 2016. This remarkable track record suggests that July is a particularly favorable time for Apple shareholders.
Catalysts for July: Apple is scheduled to deliver its fiscal third-quarter earnings update after the U.S. market closes on Thursday, August 1 at 4:30 PM ET.
The iPhone maker is seen earning $1.32 a share, rising 5.5% from $1.26 in the year-ago period thanks to improving profitability trends. Meanwhile, revenue is forecast to increase by 2.4% to $83.74 billion, driven by solid demand for the company’s high-end smartphones and computers.
Apple continues to integrate advanced artificial intelligence into its products and services, enhancing user experiences and driving demand. The company's AI-powered features in Siri and its new AI-driven health and fitness tools are expected to boost sales.
Financial Health: Apple has an above-average Financial Health Score of 3.0 out of 5.0, as assessed by the AI-powered models in InvestingPro, citing its strong market presence and innovative product ecosystem as key strengths.
Source: InvestingPro
Apple also stands out with ProTips emphasizing its robust free cash flow levels, strong dividend, and consistent profit growth.
2. Alphabet
- 2024 Year-To-Date: +32.6%
- Market Cap: $2.29 Trillion
Alphabet stock ended Tuesday’s session at $185.24, just below its record closing high of $186.04 from June 27. Shares have rallied 32.6% year-to-date, rising alongside much of the tech sector.
Source: Investing.com
At its current valuation, the Mountain View, California-based company has a market cap of $2.29 trillion, making it the fourth most valuable company trading on the U.S. stock exchange.
July Historical Performance: July has been the best month of the year for Alphabet over the last decade, with a 90%-win rate and an average return of +8.4%. This historical data points to a strong likelihood of positive returns for Alphabet shareholders in July.
Catalysts for July: Alphabet will report its earnings on Thursday, July 25, and sell-side confidence is brimming as Wall Street grows increasingly optimistic ahead of the print. According to an InvestingPro survey, all 33 analysts covering the company have upwardly revised their profit estimates in the past 90 days.
Consensus estimates call for the search giant to report earnings per share of $1.84 for the second quarter, rising nearly 28% from EPS of $1.44 in the same quarter a year earlier. Revenue is forecast to increase 12.6% from the year-ago period to about $84 billion, which if confirmed would mark the highest quarterly sales total in the Google-parent company’s history.
Alphabet's ongoing advancements in artificial intelligence, particularly in its Google Cloud and search engine capabilities, are expected to drive revenue growth. The company's AI-driven products and services are increasingly becoming essential tools for businesses and consumers alike.
Financial Health: As per InvestingPro's AI-powered models, Alphabet has an outstanding Financial Health Score of 4.0/5.0, with several bullish tailwinds working in its favor, including a robust profitability outlook and solid free cash flows.
Source: InvestingPro
This indicates an excellent balance sheet and strong growth potential, reinforcing its status as a top tech stock to own.
3. Amazon
- 2024 Year-To-Date: +31.6%
- Market Cap: $2.08 Trillion
Amazon stock closed at a fresh record peak of $200 on Tuesday, eclipsing its previous all-time high of $199.82 touched on June 27. Shares have significantly outperformed the broader market so far this year, climbing roughly 32%.
Source: Investing.com
With a valuation of $2.08 trillion, the Seattle, Washington-based tech giant is the fifth most valuable company listed on the U.S. stock exchange.
July Historical Performance: Amazon has been green in July for 15 of the last 20 years, with an average return of +4.9%. This consistency highlights July as a particularly favorable month for Amazon's stock performance.
Catalysts for July: Amazon is slated to release its second quarter financial results on Tuesday, July 30 at 4:00 PM ET.
It should be noted that earnings estimates have been revised upward 24 times leading up to the print, according to an InvestingPro survey, compared to just four downward revisions, as Wall Street grows increasingly bullish on the e-commerce and cloud giant.
Consensus calls for Amazon to post earnings per share of $1.01, surging 55.4% from EPS of $0.65 in the year-ago period. Revenue is expected to climb 10.6% to $148.6 billion, reflecting ongoing strength in its cloud computing and advertising businesses.
Furthermore, Amazon's annual Prime Day event, scheduled for July 16-17, is expected to generate significant sales and boost the company's revenue.
Financial Health: InvestingPro's AI-powered models rate Amazon with a near-perfect Financial Health Score of 4.0 out of 5.0, emphasizing its favorable positioning in the e-commerce and retail industries which has allowed the company to leverage a resilient business model and strong revenue growth.
Source: InvestingPro
This strong financial standing, combined with its growth initiatives, makes Amazon a compelling addition to any investment portfolio.
Before investing in any stock, thorough research and consideration of your investment goals are highly recommended. It's crucial to consider the company's financial health, industry trends, and your own risk tolerance before making any investment decisions.
Be sure to check out InvestingPro to stay in sync with the market trend and what it means for your trading.
Our InvestingPro Summer Sale Is Now Live!
Readers of this article can subscribe to InvestingPro for less than $7 a month as part of our summer sale.
To apply the discount, don't forget to use the coupon code PROTIPS2024 for an extra 10% discount!
Whether you're a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging backdrop of elevated inflation, high interest rates, and mounting geopolitical turmoil.
Subscribe here and unlock access to:
- ProPicks: AI-selected stock winners with proven track record.
- Fair Value: Instantly find out if a stock is underpriced or overvalued.
- Stock Screener: Search for the best stocks based on hundreds of selected filters, and criteria.
- Top Ideas: See what stocks billionaire investors such as Warren Buffett, Michael Burry, George Soros, and Ray Dalio are buying.
Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR S&P 500 ETF (SPY (NYSE:SPY)), and the Invesco QQQ Trust ETF (NASDAQ:QQQ). I am also long on the Technology Select Sector SPDR ETF (NYSE:XLK).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.