One of the best ways to spot opportunity is by spotting hot trends.
Just look at Nvidia, for example.
Caught up in a potential $1.8 trillion AI boom, the tech giant ran from about $120 to a high of about $1,200 before splitting 10:1. Even now, with the AI boom showing no signs of cooling off – at least, not any time soon – Nvidia could easily make its way back to $1,000.
Or, look at Viking Therapeutics.
Caught up in the obesity treatment boom, the once unknown stock ran from about $5 to $99. Now at $52.74, it could easily double, if not triple as it gets closer to a potential drug launch. All as the obesity epidemic bursts at the seams, creating a multi-billion-dollar opportunity.
Even lithium stocks are about to take off again, with lithium prices bottoming out.
Again, if you really want to make good money in the market, spot hot trends like these.
That being said, here are five hot opportunities to jump on.
NextEra Energy (NXE)
At the moment, one of the hot stories is the electricity demand from AI data centers.
All of which will require even more electricity to meet AI demands.
In fact, according to NextEra, electricity demand could increase 38% between 2020 and 2040, which is up from the 9% increase in demand between 2000 and 2020.
As one of the largest wholesale generators of electric power in the U.S., with approximately 30,600 megawatts of total net generating capacity, NextEra is a prime beneficiary of that demand. Making it even more attractive, Goldman Sachs says the latest drop in the NXE stock is a buy opportunity – especially with the company forecasting strong growth.
Helping. NXE’s recent joint development agreement with Entergy will allow it to accelerate the development of about 4.5 gigawatts (GW) of new solar generation and storage projects over the next five years.
Plus, the company expects to grow its earnings per share by 6% to 8% through 2027. In addition, the company has a substantial backlog of renewable energy projects. For example, in the first quarter, it added about 2.8 gigawatts, which was substantial.
Digital Realty (DLR)
What makes Digital Realty so attractive is the big demand for data centers for artificial intelligence projects. In fact, thanks to artificial intelligence, data center demand is expected to rise at a 15% CAGR until 2030, according to Goldman Sachs.
All of which will benefit Digital Realty, a real estate investment trust (REIT) that owns and operates data centers required to meet the growing demands of AI workloads.
“Almost every industry is now looking for new AI functionality that can streamline processes and improve results. In this new digital landscape, data centers are uniquely positioned to both provide and benefit from AI applications,” says Digital Realty.
And until the AI boom slows, data centers will continue to see significant demand. All of which will drive some of the best REITs to buy, like Digital Realty to new highs.
In addition, not only can investors profit from future stock price appreciation, they can also collect its current yield of about 3.3%. Helping, analysts at RBC Capital just raised their price target on Digital Realty to $166 from $144, with an outperform rating.
“The firm’s decision follows a review of the company’s first quarter 2024 results, which included record leasing performance and favorable pricing trends,” as noted by Investing.com.
SoundHound AI (SOUN)
Another way to profit from the AI story is with a Nvidia-backed stock, like SoundHound AI.
While we can always look at AI heavyweights like Alphabet, Microsoft, Nvidia, C3.AI, and Palantir, for example, the big payoff could come from the lesser known AI companies, which could eventually find themselves an M&A target, such as SOUN.
A leader in conversational intelligence, the company offers voice AI solutions that let businesses offer incredible conversational experiences to their customers, for example.
Granted, that may not sound exciting. But consider this.
One, the company is working to integrate voice assistants into vehicles and restaurants, both of which could bring in more than $500 million a year in revenue for the company. Even better, according to Automotive World, about 90% of new vehicles are expected to have embedded voice assistants by 2028. Another big plus for SOUN.
Two, Nvidia invested $3.7 million into the stock. Three, recent earnings haven’t been too shabby. The company lost seven cents per share on revenue of $11.59 million, which was better than the nine-cent loss expected on revenue of $10.1 million.
Plus, according to analysts at Wedbush, SOUN’s recent earnings put its momentum “front and center,” as quoted by Seeking Alpha.
“Overall, we believe this was a major step in the right direction for the SOUN story as the company continues to build toward profitable growth with stable revenue pillars in Automotive/Restaurant and strong monetization capabilities to capture demand from enterprises across industries that seek ways to optimize efficiencies,” added the firm.
Albemarle (ALB)
Another hot trend to jump on is lithium.
For one, lithium prices appear to be bottoming out. Two, electric vehicle sales are starting to accelerate, which is great news for lithium companies.
In fact, “Six of the 10 biggest EV makers in the US saw sales grow at a scorching pace compared to a year ago,” says Bloomberg. “For the rest of 2024, GM appears to be on the brink of becoming the biggest driver of EV growth in the US. The Detroit automaker has committed to electrifying some of its biggest brands, which are finally reaching production.”
Plus, “Canaccord says it’s more confident in its current view that lithium has bottomed than it was last May due to production prices for lithium carbonate equivalent recently falling across several producers,” they added, according to NorthernMiner.com.
All of which is great news for oversold lithium stocks, like Albemarle (ALB) – which will pay you to hold the stock. With a yield of 1.69%, the company just announced a 40-cent dividend, payable on July 1 to shareholders of record as of June 14.
While ALB earnings haven’t been too hot lately, that’s to be expected with the dip in lithium prices. However, with lithium bottoming out and electric vehicle demand accelerating, company earnings and the ALB stock should see a strong turnaround.
Altimmune (ALT)
Next up is Altimmune, a clinical stage biopharmaceutical company that focuses on developing treatments for obesity and liver diseases.
While ALT doesn’t have the most attractive chart, don’t write it off. Should all go according to plan with its obesity drug trials, the $6.41 stock could double if not triple near term.
Citing data from its MOMENTUM trial, the company said its pemvidutide treatment led to weight loss while preserving lean mass.
“Data from a 48-week trial showed that about 74.5% of weight loss was linked to fat tissue. About 25.5% was linked to lean mass, which may give it a leg up against the competition,” according to ALT’s press release.
The company says the preservation of lean mass with weight loss is critical.
After all, according to the company, as quoted by FierceBiotech: “The preservation of lean mass observed in this trial is better than reported historically with diet and exercise programs and greater than that associated with other incretin weight loss drugs, where lean mass has accounted for as much as 40% of total weight loss,” CEO Vipin Garg, Ph.D. said.
“Preservation of lean mass, which is primarily muscle tissue, is believed to be important in maintaining healthy weight loss and physical function. We believe that this best-in-class muscle preservation further adds to the differentiation of pemvidutide in the treatment of obesity.”