3 Strong Buy Large-Cap Stocks to Add to Your February Must-Watch List | Markets

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Without a doubt, large-cap stocks have been performing much better than small-cap stocks since the beginning of this year. The Dow Jones Industrial Average, which is made up of all large-cap stocks, has climbed 2.5% so far this year, while the S&P 500, whose performance is primarily driven by several strong buy large-cap stocks, is up 4.6% in 2024. Conversely, the Russell 2000, which tracks small-cap stocks is down 4% so far in 2024.

Given this data, it seems as though investors’ phobia of small-cap companies that are not yet profitable, which took a highly justified hiatus late last year, has returned. Consequently, momentum traders and momentum investors should look to buy large-cap, highly profitable stocks whose issuers have strong balance sheets. Here are three strong buy large-cap stocks for them to consider.

IBM (IBM)

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Driven by strong demand for its AI software and services, as well as its hybrid cloud offerings, IBM (NYSE:IBM) reported impressive fourth-quarter results on Jan. 25.

Specifically, its income from continuing operations climbed 14.5% year-over-year to $3.285 billion. Moreover, Big Blue’s free cash flow surged 1.7% year-over-year to $6.09 billion. Finally, the firm provided 2024 free cash flow guidance of $12 billion, well above Bank of America’s (NYSE:BAC) estimate of $11 billion to $11.5 billion.

IBM’s AI business is growing rapidly, as its bookings related to the technology soared 100% in Q4 versus Q3. With many companies quickly integrating AI and turning to IBM for help with doing so, the phenomenon should continue to provide a major positive catalyst for the firm’s profitability and for IBM stock going forward. This raid growth makes IBM one of the market’s strong buy large-cap stocks

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