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.
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…
“You deserve someone who would make you so happy that you forget that you had ever been sad; someone who would love you so much that you forget that you once wondered if you are worthy of love. You deserve someone who would make you realize that you deserve to be loved; but not just with any kind of love.” —Nica Rodriguez