The US stock markets have gone up leading up to the day of President Donald Trump’s inauguration. All the major indices are set to continue their optimism from last week, when the Dow, the S&P, and the Nasdaq all reported gains of over 3.7%.
Even though the S&P had hardly moved from its early November levels when the election happened, many mega-cap stocks continue to register 52-week highs. We looked at some of these stocks and why they are expected to continue surging up with the earnings season already underway.
To come up with our list of 10 mega-cap stocks that could continue surging post 52-week highs, we only considered stocks that have recently hit their 52-week highs and have a market cap of at least $150 billion.
An aerial shot of a regional bank with its numerous branches situated in a city.
10. Citigroup Inc. (NYSE:C)
Citigroup Inc. is a worldwide financial and banking services provider to institutions, governments, consumers, and corporations. It operates through markets, wealth, U.S. personal banking, and other segments. The company’s shares have just reached a 52-week high boosting investors’ confidence.
The company’s Q4 report showed a 12% rise in revenue, making it one of the strongest quarters in a decade. The company wants to buy back shares worth $1.5 billion in the 1st quarter of 2025, which should add further value to the stock. It shows the company is confident in its financial position, which should also help it in its aim of becoming one of the world’s top investment banks.
After the price surge, the valuation gap is reduced from 0.4 tangible book value to 0.8 reaching a more reasonable level. The overall performance of the company was quite good as its stock had already gained over 50% in the past year. With a continuous upward trend in the stock performance, it continues to attract investors’ attention.
9. Arista Networks Inc. (NYSE:ANET)
Arista Networks Inc. is a cloud networking solution provider for campus, data center, and routing environments. The firm is a major player in high-speed AI networking, being one of the top suppliers in the market. The company’s stock hit a 52-week high indicating a positive trend.
Since late 2022 ANET has recorded a 280% price surge. This isn’t as impressive as some of the AI stocks but it still comfortably outperformed the S&P 500. The company is expected to create a mid-teens growth cadence by 2026. Even though the valuation seems high, keeping in mind the future growth of AI, the price is justified considering the long-term investment potential of the firm.
The share price continued its momentum in 2024, going up 90% to end another successful year. It is likely to follow the upward trend in 2025 as well making it an ideal long-term option for investors.
8. HSBC Holdings plc (NYSE:HSBC)
HSBC Holdings plc is a financial and banking services provider worldwide that operates through global banking and markets, wealth and personal banking, and commercial banking segments. The company’s stock is on a dream run, gaining over 150% in 4 years. That run is likely to continue judging by the company’s performance.
The bank’s most recent earnings beat both the revenue and earnings consensus. The bank continues to reap the benefits of high interest rates. Even if the interest rates go down, the bank’s global business is structured in such a way that it continues to reduce the sensitivity of its net interest margins to decreasing interest rates.
The stock’s 6% dividend yield continues to attract more investors and forms the backbone of most people’s investment thesis in the company.
7. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Intuitive Surgical, Inc. is a medical technology company that generates, markets, and manufactures surgical systems.
The company’s share prices went up right after the estimates showed a 25% expected increase in Q4 earnings. The increased revenue forecast was the result of an 18% rise in worldwide surgeries performed using the da Vinci system of ISRG. The company expects worldwide da Vinci procedures to grow 13% to 16% in 2025. Share prices skyrocketed over 60% in the previous year.
The current optimism is also partially driven by the company’s AI prospects. ISRG sits on a vast amount of surgical data which can be used to train AI models. This unique position makes the company a unique AI play, despite its strength in medical devices technology.
6. The Goldman Sachs Group, Inc. (NYSE:GS)
The Goldman Sachs Group, Inc. is a worldwide financial services provider that operates through platform solutions, global banking & markets, and other segments. The global banking and markets segment is the key driver of earnings for the bank.
Analysts are hopeful about the company as the expected EPS growth for 2025 and 2026 is 18% and 13% respectively. This growth makes GS’s valuation quite attractive. Financial companies were some of the strongest performers in the last year, helping investors generate strong returns.
The bank’s stock has surged over 60% in just a year. Though lower interest rates might affect earnings, investors should take it as an opportunity and be bullish about the bank’s future outlook and earning potential.
5. American Express Company (NYSE:AXP)
American Express Company is a worldwide financial services provider that operates through commercial services, consumer services, and other segments. The company is in the spotlight as its shares hit a 52-week high indicating strong investor optimism.
AXP’s Q4 earnings report will be released on 24th Jan. Revenue growth is projected to be 9% while EPS is expected to grow by 16%. The market seems worried about the company due to higher credit card charge-offs and an unstable economy in light of the presidential elections. However, the company serves customers who keep spending even during economic depressions, helping it strengthen its moat.
The company’s expenses are well managed too. It has a great return on equity at over 34%. Moreover, the company’s shares have soared over 70% in the last year, which could continue well into 2025.
4. Morgan Stanley (NYSE:MS)
Morgan Stanley is an investment bank that provides various financial services and products to individuals, governments, corporations, and financial institutions. CEO of the bank, Ted Pick, stated that 2024 was “one of the strongest years” in the history of the bank.
“Total client assets grew to $7.9T across Wealth and Investment Management supported by markets and healthy net new assets”
MS earned more than double in FQ4 2024 compared to the same quarter last year. In Q4 of 2024, the bank’s revenue was 25% higher than estimates while GAAP EPS exceeded expectations by $0.53. The stock showed a continuous uptick in the previous year with a gain of over 60%. The bank’s shares just reached a 52-week high on the back of impressive earnings from the banking sector. The 2.68% dividend yield may not be the most impressive, but coupled with the company’s strong financials, makes for an attractive investment picture for investors.
3. Cisco Systems Inc. (NASDAQ:CSCO)
Cisco Systems Inc. is a multinational company that manufactures, sells, and designs internet protocol-based networking and other telecom equipment. CSCO’s last year performance was only slightly below the S&P 500’s, which is quite staggering considering the stock was down 10% in the first 8 months of the year.
The company’s resurgence has brought investors and analysts back into the stock, with Citi recently adding it to its 30-day Catalyst Watch list. The company announces its fiscal Q2 results on the 12th of February, so one can expect upward momentum till that point.
CSCO is now in a strong position for growth and profitability. The company appears to be making good progress heading into the latter half of the fiscal year. The Cloud/AI and Security Segments are expected to register growth in the second half of the year. The ongoing quarter is also expected to beat analyst estimates according to the management, with revenue coming in at $13.85 billion. In the longer run, even though revenue could stay steady, operating EPS is expected to accelerate through 2027.
2. SAP SE (NYSE:SAP)
SAP SE is a technology, applications, and services provider. It provides software solutions for manufacturing, finance, and other services. The company’s share hit a 52-week high recently, highlighting its strong market performance.
It has been a key AI player in the last couple of years. If we look at the company’s past year performance, the stock gained over 60%. TD Cowen also just upgraded the company from Hold to Buy and increased the target price from $240 to $305.
The company has demonstrated a strong financial performance in the recent past. In Q3 total revenues were up 9% in euros, but revenue expectations were not met in terms of USD. GAAP was also higher than expected. Seeing how the stock performed in the previous year, investors will hope the trend continues into 2025.
1. JPMorgan Chase and Co. (NYSE:JPM)
JPMorgan Chase and Co. is a global financial services provider. It operates in asset & wealth management, consumer and community banking, and commercial & investment banking segments. The bank has shown a strong upward trend in the previous year with a gain of 55%.
The reason for this optimism is the company’s recently announced Q4 performance. It exceeded the expected revenue for Q4 by $1.21 billion. Additionally, GAAP EPS was also higher ($4.81) than expected ($4.10). The Fixed-Income, Currency, and Commodities (FICC) trading Outperformed this quarter, clocking in at $5.01 billion, surpassing the expected $4.37 billion mark.
The bank’s book value per share was up 11% while tangible book value per share was up 13% y/y. The net interest income of the bank was down 3% as compared to the previous year, but it still managed to exceed estimates. The strong performance of the company as well as continuous gain in the stock’s price for the whole year continues to deliver strong results for investors.
JPMorgan Chase is 22nd on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 105 hedge fund portfolios held JPM at the end of the third quarter which was 111 in the previous quarter. While we acknowledge the potential of JPM as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
