Based

2024

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<p class="has-drop-cap">The fresh 2024 is on a trajectory to see the reversal of the Fed’s interest rate hiking cycle. Fed fund futures keep pricing in this likelihood, now seeing a <a aria-label=" (opens in a new tab)" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">64%</a> probability of the first rate cut in March, followed by 100% rate cut probabilities throughout the year.</p>
<p>At the same time, recession indicators are still active. New York Fed places US recession probability by treasury spread at <a aria-label=" (opens in a new tab)" href="https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">51.8%</a>. The rate cuts could prevent or lessen the recession blow depending on the inflation trajectory.</p>
<p>In turn, companies are heading to benefit from reduced borrowing costs, easier capital access, and boosted stock valuations. In a feedback loop, cheaper interest rates boost consumer spending, further fortifying the companies’ bottom lines.</p>
<p>In this macroenvironment, investors typically pick proven <a href="https://tokenist.com/investing/blue-chip-stocks/" rel="noopener noreferrer nofollow" class="deco-link">blue chip stocks</a> to hedge against risk. The “<a aria-label=" (opens in a new tab)" href="https://www.visualcapitalist.com/magnificent-seven-stocks/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Magnificent Seven</a>” have already absorbed over $11 trillion in capital, making them much more challenging to move. These lesser blue chips pose solid diversification stakes during 2024.&nbsp;</p>
<h3 id="visa-inc-nasdaq-v">Visa, Inc. (NASDAQ: V)&nbsp;</h3>
<p>As blue chip-based risk dampening goes, Visa is the top contender. Sharing a global payment duopoly with MasterCard (MA), Visa increased its net revenue by 11% in 2023, to $8.6 billion in the fiscal fourth quarter. Year-over-year, V shares gained 24% vs MA’s 21.5%.&nbsp;</p>
<p>Per the latest <a aria-label=" (opens in a new tab)" href="https://s1.q4cdn.com/050606653/files/doc_financials/2023/q4/Q4-2023-Earnings-Release-FINAL.pdf" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Q4 2023 earnings report</a>, the global payment processor also racked double-digit growth in key areas.</p>
<p>Visa’s total cross-border payment volume increased by 20%, having to process 10% more transactions year-over-year. Visa’s profitability increased by 18% annually, at $8.28 GAAP (Generally Accepted Accounting Principles) earnings per share (EPS).</p>
<p>Visa (V) shareholders can also count on the company’s generous stock repurchase program, mitigating value dilution in a <a href="https://tokenist.com/investing/investing-during-a-recession/" rel="noopener noreferrer nofollow" class="deco-link">potential recession scenario</a>. During 2023 (twelve months ending September), Visa repurchased $12.4 billion worth of V shares at an average price of $222.98.</p>
<p>Taking these factors into account, 31 analyst inputs pulled by Nasdaq place V stock as a “strong buy.” The average V price target is $281.94 vs the current $258. The high estimate is $305 vs the low forecast of $243 per share.</p>
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<h3 id="advanced-micro-devices-inc-nasdaq-amd">Advanced Micro Devices, Inc. (NASDAQ: AMD)</h3>
<p>What is MasterCard to Visa, AMD is to <a href="https://tokenist.com/why-nvidia-dipped-despite-blockbuster-q3-earnings/" rel="noopener noreferrer nofollow" class="deco-link">Nvidia</a> and Intel. While Nvidia took the investing spotlight by transitioning to data center supplier for generative AI demand, AMD keeps ramping up its competitive edge.&nbsp;</p>
<p>As of Q3 2023, AMD increased its market share in the desktop PC market by 5.8% year-over-year. Likewise, more people bought AMD’s mobile and server offerings, at 3.8% and 5.8% respectively.&nbsp;</p>
<p>Mercury Research places AMD desktop unit share at 19.2%. Across all segments, AMD’s revenue share is holding at 16.9%. In the latest <a href="https://d1io3yog0oux5.cloudfront.net/_00f82238b7e5e13415bae3386df8e7f8/amd/news/2023-10-31_AMD_Reports_Third_Quarter_2023_Financial_1163.pdf" target="_blank" aria-label=" (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">Q3 2023 financial report</a>, AMD’s revenue is up by 4% year-over-year, with net income delivering $299 million compared to $66 million from a year-ago quarter.</p>
<p>Relying on its competitive pricing, AMD revenue for the quarter increased by 21%, mainly owing to the 4th gen AMD EPYC CPUs. The Ryzen series is still the show’s star, delivering 42% more year-over-year revenue in the mobile processor arena.&nbsp;</p>
<p>AMD’s EPYC processors are also gaining ground in cloud computing adoption across AWS, Microsoft Azure, and Oracle. More competitively priced, AMD is known to be a value-oriented company, making it favorable for consumers in a recession scenario.</p>
<p>Based on these factors, 32 analyst inputs pulled by Nasdaq place AMD stock as a “strong buy.” The average AMD price target is $133.19 vs the current $139. The high estimate is $170, while the low forecast is $98 per share.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<h3 id="thermo-fisher-scientific-inc-nasdaq-tmo">Thermo Fisher Scientific, Inc. (NASDAQ: TMO)</h3>
<p>TMO missed the sales forecast in October, causing the shares to drop. However, Thermo Fisher rallied by 7.3% in the last three months, and for a good reason. The company supplies science instruments, diagnostic tools, laboratory consumables, and analytics software in drug development.&nbsp;</p>
<p>In other words, Thermo Fisher is to the biotech sector what semiconductor foundries like TSMC are to AMD or Nvidia. The global biotech market is projected to be worth $210.71 billion by 2030 at a compound annual growth rate (CAGR) of <a aria-label=" (opens in a new tab)" href="https://www.precedenceresearch.com/biotechnology-market" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">12.8%</a>.</p>
<p>Although TMO generated 1% lower year-over-year revenue in <a aria-label=" (opens in a new tab)" href="https://ir.thermofisher.com/investors/news-events/news/news-details/2023/Thermo-Fisher-Scientific-Reports-Third-Quarter-2023-Results/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Q3</a> at $10.57 billion, its GAAP diluted earnings per share (EPS) was 17% higher from a year-ago quarter, at $4.42 per share. Moreover, the company’s profitability, expressed by operating margin, increased by 160 points (1.6%), showing strong positioning for long-term growth.</p>
<p>Moving forward, Thermo Fishers expects to reach $42.7 billion in revenue for 2023, with an adjusted EPS of $21.50. After the October slump, investors took that as a buy-in opportunity.&nbsp;</p>
<p>Based on 20 analyst inputs pulled by Nasdaq, TMO stock is a “strong buy.” The average TMO price target is $544.89 vs the current $542.90. The high estimate is $640 vs the low forecast of $475 per share.</p>
<p><strong><em>Which sector are you most exposed to, tech, payments, or biotech? Let us know in the comments below</em></strong>.</p>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/three-stocks-to-diversify-beyond-the-magnificent-seven-in-2024/">Three Stocks to Diversify Beyond the Magnificent Seven in 2024</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Three Stocks to Diversify Beyond the Magnificent Seven in 2024

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