3 stock giants that could compete with Amazon’s market value

Buying the right stocks is crucial to maximize returns and ensure long-term financial growth. Among the myriad options available, three companies stand out as compelling choices. These companies potentially have major advantages, such as a trillion-dollar market cap, by capitalizing on AI and fintech trends, similar to Amazon (NASDAQ:Amazon).

These companies are responsible for global payment innovation, capitalizing on digital transformation trends and expanding their market presence with innovative payment solutions. Leveraging their massive user base and advanced AI capabilities, they continue to redefine digital engagement and advertising effectiveness on their platforms.

At the same time, the strategic focus on AI and semiconductor solutions has significantly driven revenue growth. This is especially true in the data center and networking sectors. To navigate volatile markets and capitalize on new opportunities, it is crucial to identify the underlying fundamentals that keep these companies at the top. Here, the focus is on the financial strength, strategic initiatives and market positions of these companies. It examines why these stocks are the right investments today, but could still be the market leaders tomorrow.

Visa (V)

Source: Kikinunchi / Shutterstock.com

Visa (NYSE:V) has mastered digital payments, enabling secure and efficient transactions around the world. The company generated net revenue of $8.8 billion (Q2 2024), up 10% year-on-year. This growth translated into a 20% increase in earnings per share, underscoring Visa’s effective revenue management and operational edge in driving profitability.

In addition, Visa’s strength lies in global payment volumes, which increased 8% year-on-year in constant dollars. This growth was driven by a 6% increase in US payment volumes and strong 11% growth in international payment volumes. Particularly notable is the 16% year-on-year growth in cross-border volumes, excluding intra-European transactions. This reflects Visa’s strong international presence and ability to efficiently process cross-border transactions.

In addition, Visa is targeting a huge market, with global personal consumer goods (PPCE) spending – excluding Russia and China – estimated at over $20 trillion. This growth is being driven by initiatives such as tap-to-pay and the conversion of domestic network cards to Visa credentials. This is particularly highlighted by success in Europe, where over 20 million credentials have been converted since 2018.

In short, payment volume growth, market expansion, and the resulting increase in revenue cement Visa’s presence on the list of stocks to buy.

Meta (META)

Source: Ascannio / Shutterstock.com

Meta (NASDAQ:META) dominates in social media and digital advertising. In the first quarter of 2024, Meta generated revenue of $36.46 billion, a significant increase of 27% year-over-year. This growth was primarily driven by a corresponding 27% increase in advertising revenue, which reached $35.6 billion. This growth can be attributed to robust performances in online commerce, gaming, and entertainment. Revenue growth was robust in regions such as Rest of World (40%) and Europe (33%), reflecting sharp monetization strategies tailored to different geographic markets.

Furthermore, the company can effectively monetize its large user base across its family of apps. This is due to its robust engagement strategies and sophisticated AI-powered recommendation systems integrated into platforms like WhatsApp, Messenger, Instagram, and Facebook. Therefore, these AI capabilities can generate revenue by increasing advertising effectiveness and user engagement.

With billions of daily active users across its family of apps in March 2024, up 7% year-over-year, Meta continues to make strong inroads into online advertising. Overall, this global expansion makes Meta a top stock to buy, with a solid foundation to scale its AI-driven services and capitalize on emerging market opportunities.

Broadcom (AVGO)

Source: Shutterstock

Broadcom (NASDAQ:AVGO) dominates AI-driven networking, data center semiconductors, and infrastructure. The company’s AI revenue has grown exceptionally, increasing 280% year-over-year. The company is able to benefit from the growing AI sector. This is especially true in the data center market, which positions the company well for further revenue growth. Following the VMware acquisition, annualized booking value (ABV) for VMware products accelerated from $1.2 billion to $1.9 billion from Q1 to Q2, reflecting strong customer adoption led by Broadcom.

Broadcom’s semiconductor segment also saw solid growth, with revenue reaching $3.8 billion, up 44% year-on-year. This growth was driven by increased demand from hyperscalers for AI networking and custom accelerators. Broadcom posted consolidated revenue of $12.5 billion, up 43% year-on-year. In addition, gross margins for its infrastructure software were remarkably high at 88%, demonstrating its ability to maintain profitability despite revenue growth. Operating margins for infrastructure software were also solid at 60%, therefore indicating sharp cost management and an operational edge in VMware integration.

Broadcom’s revenue performance, ongoing VMware integration, and improving bottom line led the company to land on the list of stocks to buy.

At the time of writing, Yiannis Zourmpanos held a long position in META. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publishing policies.

At the time of publication, the editor in charge did not own (either directly or indirectly) any positions in the securities mentioned in this article.