Even with a slight early-summer correction on the books, Nvidia (NASDAQ:NVDA) stock still finished the first half of 2024 as one of the biggest and brightest winners, with a gain of around 152%. That’s an amazing return in a six-year timespan, let alone a six-month one.
Undoubtedly, Nvidia is no longer the world’s largest company, but as shares look to regain their footing and power higher again, I’d not bet against NVDA stock making another run for that top spot. Perhaps its next leg higher could leave Microsoft (NASDAQ:MSFT) behind.
In any case, it’s hard to tell when the next leg for NVDA stock will be. For momentum investors, Nvidia isn’t the only game in town. There are other booming stocks in the market, many of which trade at far lower valuation multiples.
In this piece, we’ll look at three cheaper high-momentum stocks, hoping to follow up on impressive first-half showings.
Abercrombie & Fitch (ANF)
Abercrombie & Fitch (NYSE:ANF) is having a powerful resurgence, with the stock soaring more than 111% year to date. Undoubtedly, apparel is a tough place to be these days, but Abercrombie has found a way to buck the trend and pull off one of the biggest comeback stories in all of retail.
For Abercrombie, the big top- and bottom-line beats keep coming in. Over the past two years, much-improved quarterly numbers have helped shares skyrocket close to 950%. Despite the parabolic surge, however, ANF stock still looks cheap at 21.8 times forward price-to-earnings (P/E).
Given newfound sales momentum and a reinvigorated brand resonating with young crowds again, it’s a mistake to bet against the firm as it may just be in a spot to take a bigger bite out of the apparel market. Undoubtedly, the turnaround strategy has been a profound success. Now, the big question is if Abercrombie can keep it up. As it tackles international markets, perhaps ANF stock’s run still has legs.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) is an AI chip titan that may be worth checking in on after its June swoon. With AVGO stock now down 10% from last month’s all-time high, the AI darling may have investors biting their nails as some seek to take profits after a remarkable first-half gain of around 50%.
Bank of America (NYSE:BAC) Securities analyst Vivek Arya thinks the jitters over AVGO stock are not warranted. In fact, he’s a huge fan of the company’s “diverse growth drivers,” strong management and the dividend. Indeed, Broadcom’s AI potential is widely recognized by many. It’s no longer a stealthy way to bet on the AI race. That said, I find it quite intriguing that the firm maintains a relatively attractive dividend payout.
Mr. Arya notes AVGO stock’s above-average yield (currently at 1.31%) and dividend growth prospects are additional reasons to pay a premium price tag. I couldn’t agree more. Broadcom offers unrivaled exposure to AI growth in addition to a very generous and “growth-y” dividend. At 27.4 times forward P/E, AVGO stock also looks much cheaper than NVDA.
Oracle (ORCL)
Sticking with the AI theme, we have Oracle (NASDAQ:ORCL), which is up an impressive 37% year-to-date. There is decent momentum behind ORCL stock going into the second half, but it is far less explosive versus Nvidia, Abercrombie and Broadcom. Still, I view Oracle as boasting a strong growth profile that can sustainably support the stock’s newfound momentum for a few years.
With an impressive data center growth profile and a new in-database large language model (LLM) in HeatWave GenAI launching last month, Oracle stands out as an AI play that could finish the year with a bang.
At the time of writing, ORCL stock trades at 22.7 times forward P/E, making it a relative value play in the red-hot AI scene. With a 1.12% dividend yield, the name also stands out as a great dividend growth play to play the AI revolution for the longer term.
On the date of publication, Joey Frenette held shares of Microsoft. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.