As 2024 comes to a close, seasonality is a theme that occurs every year entering the holiday season. A look back at some of the familiar headline trends for 2024 includes the AI data center boom, shortage of GLP-1 drugs, fresh demand for nuclear power, restarting the interest rate cut cycle, off-price shopping frenzy, retailer inventory normalization, and the ad market, and cloud computing recovery. The fear of missing out (FOMO) on the Santa Claus rally can set up a perfect buying storm in the year's fourth quarter. Here are the growth stocks to watch for.
Best Buy Is Expecting a Strong AI-Powered Holiday Shopping Season
The nation's largest brick-and-mortar consumer electronics big box store, Best Buy Co. (NYSE: BBY), has been an example of growing efficiencies during the lean times. Revenues have been steadily falling due to the normalization of the post-pandemic surge for the past two years. Still, the company has been beating consensus analyst EPS estimates every quarter for the past five years. In its fiscal second quarter of 2025, the company grew its EPS by 10% YoY to $1.34.
The company has been laser-focused on cost containment and growing efficiencies by trimming layers of management and prioritizing high-margin products and services. The AI boom is also driving the computing category upgrade cycle thanks to new AI functionalities on Microsoft Co. (NASDAQ: MSFT) co-pilot. The company is expecting a strong close to the end of its fiscal year, as evidenced by its raised fiscal full-year guidance of $6.10 to $6.35, up from $5.75 to $6.20 prior guidance, crushing the $6.07 consensus analyst estimate.
Micron Technology Is the Late Bloomer in the AI Revolution
The nation's largest memory chip maker, Micron Technology Inc. (NASDAQ: MU), has been waiting for clients to work through the oversupply of memory chips triggered by the post-pandemic recovery. Revenues declined even as the AI boom took shape in 2023. While it was passing by Micron, massive data storage is a very important facet required for AI deployment.
Micron makes DRAM memory chips and NAND flash memory storage chips. Things changed when Micron reported a 93.3% YoY revenue surge in its fiscal fourth quarter of 2024 earnings release, beating consensus analyst estimates by over $100 million. Datacenter and AI deployment is a long runway for the company.
Its industry-leading high-bandwidth memory (HBM) chips are so in demand that they are all booked through 2025. This prompted Micron to purchase two chip factories in Taiwan to bolster its production capacity of HBM chips. Even its CEO couldn't contain his excitement, citing they are entering 2025 with its "best competitive positioning" in the company's history with "substantial revenue" and "significantly" improved profitability in fiscal 2025, which is calendar year 2024. Micron raised its fiscal first quarter 2025 EPS range to $1.66 to $1.82 versus $1.52 consensus analyst estimates.
TJX Companies Is Riding the Off-Price Shopping Trend to the Bank
The consumer discretionary sector has suffered as shoppers feel the pinch of high interest rates and inflation, despite economic reports claiming inflation has dropped under 3%. Consumers who don't want to sacrifice quality for quantity enthusiastically shop at off-price retailers like TJ Maxx, Marshalls, and HomeGoods owned by parent company The TJX Companies Inc. (NYSE: TJX). The thrill of the treasure hunt is alive and bountiful as regular shoppers frequent their stores to discover valuable hauls from luxury brands like Gucci, Versace, Longchamp, Saint Laurent, Valentino, and Christian Louboutin.
TJX CEO Ernie Herman stated, “Availability of quality branded merchandise is excellent, and we are confident we will have an exciting assortment of fresh goods across all of our stores and online throughout the fall and holiday selling seasons.” This is music to a treasure hunter’s ears. Holiday shopping will undoubtedly see TJX’s business surge this year, and its stock will likely follow.
