Earnings growth is a key driver of stock prices in the long term, as stated by Nasdaq Chief Economist Phil Mackintosh. This is evident in the performance of growth stocks with strong earnings per share (EPS) leading the market since October 2022. Innovative companies that align with current trends tend to have the best EPS growth, and this is reflected in their stock performance.
Two key growth areas currently are data center AI chips and e-commerce. Companies operating in these sectors are experiencing significant earnings growth. For example, Nvidia has established itself as a leader in AI chips, experiencing a surge in revenues and earnings. Analysts predict continued growth for Nvidia, making it a top growth stock with strong EPS.
PDD Holdings is disrupting the e-commerce market by offering discounted products and targeting lower-income consumers. Its revenue and net income have seen substantial growth, leading to positive analyst sentiment and a favorable valuation. MercadoLibre, known as the Amazon of Latin America, is also experiencing rapid growth in the e-commerce space. With strong financial performance and projected EPS growth, MercadoLibre is poised for continued success.
Overall, these companies are among the top growth stocks with impressive EPS growth, supported by their strategic investments and alignment with current market trends. Investors can expect further upside as these companies continue to deliver strong financial results and capitalize on growth opportunities.