Previously, I discussed the outlook for my Singapore portfolio for this year, which prioritises income generation. In contrast, my US portfolio focuses on capital appreciation, seeking long-term growth.
To provide context for my outlook on these US companies, let me briefly describe the portfolio. It primarily comprises large-cap stocks, with only three out of sixteen counters having a market cap below US$20 billion.
While all the stocks are considered growth counters, they represent varying stages of development, ranging from established players to high-growth disruptors.
Furthermore, the portfolio is heavily slanted towards the technology sector, representing approximately 80% of the total holdings. This reflects my long-term belief that technology will continue to revolutionise various industries, driving significant growth opportunities across sectors.
Now, let’s examine how I anticipate some companies in my portfolio will fare this year. Do note that I am not predicting the stock prices but just briefly highlighting their businesses development and momentum.
That said, I personally think that the market, after two years of consistent growth, appears overvalued. However, numerous factors can impact short-term price movements, so the market can still move in either direction.
In fact, my US portfolio is already up by more than 5% in just the first two trading days of this year. It’s both exhilarating and a bit unsettling.
Disclaimer: The following paragraphs contain my personal opinions and should not be considered financial advice.
The Titans will Continue to Dominate
You are likely using one or more products from these tech titans: Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG), and Microsoft (NASDAQ: MSFT) to read this post. Their products and services are ubiquitous in today’s world and I believe it will continue to be so in the foreseeable future.
I don’t expect Apple Intelligence to wow but it should give iPhone sales a boost, expanding their user base and further fuelling their Services revenue.
Alphabet’s grip on both Google Search and YouTube ads segments should remain tight. As a user, I like how it has seamlessly integrated Gemini in its search by providing an AI Overview in the search results.
While ChatGPT and others are gaining traction, I believe the majority will stick with Google. Additionally, its recent 35% year-on-year (YOY) Google Cloud growth is impressive and a promising growth driver for the future.
Microsoft’s diverse portfolio, powered by ChatGPT’s integration, is poised for continued growth across Azure, Microsoft 365, and other ventures.
Any discussion of tech titans is incomplete without Nvidia. I missed out on its 2023 surge, initially hesitant to chase the price. However, I took a small position last April during a market correction and have since increased my holdings.
The imminent arrival of Blackwell chips, with their potential to revolutionise AI, is incredibly exciting. I believe Nvidia is well-positioned for continued growth.
During the Gold Rush, Sell Shovels
Arista Networks (NYSE: ANET), a leading provider of high-performance networking solutions, is ideally positioned to capitalise on the burgeoning AI revolution.
The company’s cutting-edge solutions are instrumental in enabling the rapid data transfer and processing that underpin the success of AI-driven applications.
Arista’s strategic partnerships with tech giants like Microsoft and Meta Platforms (NASDAQ: META) underscore its critical role in the AI ecosystem.
As AI projects transition from pilot programs to full-scale production, the company’s cloud AI segment is poised for significant growth in the coming years.
Furthermore, Arista’s continued expansion in the enterprise and campus networking markets further solidifies its position as a dominant force in the industry.
Given these favourable market dynamics and Arista’s strong track record of execution, the company is well-positioned to not only meet but potentially exceed its financial guidance.
The other company that “sell shovels during gold rush” is leading e-commerce platform Shopify (NASDAQ: SHOP).
After a robust 3Q 2024 results where its revenue grew by an impressive 26%, Shopify looks set to complete the year with a strong final quarter. This is evidenced by record-breaking merchant sales over Black Friday-Cyber Monday weekend.
Maintaining current growth may be challenging, but Shopify’s strong network effect positions it for long-term success.
The Innovative Disruptors: From Programmatic Advertising to Robotic Surgery
Just like how Shopify has made commerce better for everyone, The Trade Desk (NASDAQ: TTD), has transformed how advertising is done, improving the relevance and impact of advertisements.
The company’s new strategic partnerships with major players like Spotify (NASDAQ: SPOT) and Netflix (NASDAQ: NFLX) offer exciting growth opportunities.
It will be another exciting year for Intuitive Surgical (NYSE: ISRG), a company that has revolutionised minimally invasive surgery and provided significant value for patients and healthcare partners.
With the wider launch of tis da Vinci 5 platform this year, Intuitive is likely to solidify its position as the leading provider of robotic-assisted surgical systems.
Another healthcare player, Veeva Systems (NYSE: VEEV) is gaining momentum in migrating its customers from Veeva CRM, bulit on Salesforce‘s (NYSE: CRM) platform to its own proprietary system, Vault CRM.
Despite a recent Salesforce win, Veeva’s market dominance and deep life sciences expertise likely position them to retain most existing customers.
A Leading Rural Retailer and Cybersecurity Leader
Tractor Supply Company (NASDAQ: TSCO), a leading retailer that primarily serves rural lifestyle customers, has a challenging FY2024 due to decreased consumer spending. However, the company demonstrated resilience by maintaining both sales and net income.
Tractor Supply recently acquired Allivet, which complements and expands its existing Life Out Here’ product and services line-up. The growth should return once the broader retail environment improves.
Zscaler (NASDAQ: ZS) continued its strong growth trajectory, achieving 26% year-over-year sales growth in 3Q2024, although this represents a moderation compared to previous periods.
Sustaining a revenue growth rate of 20% or higher will be crucial for Zscaler to achieve profitability in the coming years.
In conclusion, I am optimistic about the development of the companies in my US portfolio.
While short-term stock price movements are uncertain, I believe that successful execution of their respective business plans will ultimately translate into strong long-term returns.
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