Nvidia stock is a sensation among investors — including top fund managers — because of its rapid growth. But there’s one S&P 500 stock that’s growing even faster than the AI wunderkind.
Analysts think of casino operator The Las Vegas Sand (LVS) will post 150.7% revenue growth in 2023. That’s the highest expected revenue growth forecast for this year of any S&P 500 company, according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. It’s even higher than the breathtaking 100.5% revenue growth expected by analysts Nvidia (NVDA) this calendar year.
Amazingly, though, shares of Las Vegas Sands are up just 1.1% this year. Nvidia shares are up 211.6%. It’s just a reminder that investors still believe tech stocks like Nvidia have a brighter future than other sectors, says Nicholas Colas of DataTrek Research.
“There is a wide range of earnings revisions for technology names during these periods, but overall most of these companies offer better prospects than the broader US stock market,” he said.
Why growth is gold
Finding massive growth at companies like Las Vegas Sands and Nvidia is becoming increasingly difficult as many S&P 500 companies see revenue decline this year. Overall, S&P 500 companies are posting just 2.4% revenue growth this year, says FactSet’s John Butters.
It’s not surprising that many companies are trying to distract investors with their lack of growth with promising stories. A record 177 companies mentioned ‘AI’ during investor conference calls since June 15. That’s three times the average number of companies talking about AI in the past five years, Butters says.
Investors are playing along for the time being. Shares of the companies that drop “AI” in their calls are up 13.3% this year, outpacing the 1.5% gain of companies that don’t mention AI.
But ultimately, investors will want the letters AI to change to higher numbers on the income statement.
Betting on Las Vegas Sands
Las Vegas Sands is perhaps the best example of the business growth taking off as the economy returns to pre-pandemic life. It owns and operates casinos, mainly in Asia.
Analysts believe the company will generate $10.3 billion in revenue by 2023. If that comes to fruition, this would be 151% higher than the revenue it posted in 2022. That exceeds Nvidia’s projected growth of 100.5% in 2023. More importantly, though, Las Vegas Sands’ average annual growth rate in will be seen over the next two years. Reaching 85.2%. That also tops Nvidia, where growth of 71.3% is forecast on the same basis.
But again, the rise of travel is a key growth theme in the S&P 500. Half of the S&P 500 companies expected to grow the most this calendar year are in a similar boat Carnival (CCL), Norwegian cruise line (NCLH), Wynn Resorts (WYNN) and Royal Caribbean (RCL).
Where has technological growth gone?
Investors may like technology. But the big growth just isn’t there, with the exception of Nvidia.
Nvidia is one of only two information technology stocks to be among the fastest growing 10 stocks in the S&P 500 this year. But the other fast-growing technology is not part of the Magnificent Seven, but a solar installation company First solar energy (FSLR). Analysts believe the company’s revenue will reach $3.5 billion this calendar year, up almost 34% from last year.
What about the tech giants? Apple (AAPL) may be the most valuable stock in the S&P 500, but that’s not due to big growth. Analysts believe the gadget maker will grow its sales by just 0.6% in calendar 2023, followed by 7.4% growth in calendar 2024.
That said, Tesla is holding its own. And it’s a Magnificent Seven stock. Analysts believe the EV manufacturer’s revenue will reach $129.0 billion this year, up 22.8% from last year.
That’s pretty good, but still not enough to impress Las Vegas Sands investors.
Largest revenue growth in the S&P 500
Based on average annual growth for calendar 2023 and 2024
|Company||Ticker||2 years avg. resume growth (estimated)||Stock YTD % ch.||Sector|
|The Las Vegas Sand||(LVS)||85.2%||1.1%||Discretionary consumer products|
|Carnival||(CCL)||43.4||89.3%||Discretionary consumer products|
|Norwegian cruise line||(NCLH)||42.7||33.9%||Discretionary consumer products|
|Wynn Resorts||(WYNN)||39.6||14.8%||Discretionary consumer products|
|Extra space storage||(EXR)||36.7||-13.9%||Property|
|Royal Caribbean Cruises||(RCL)||34.2||95.4%||Discretionary consumer products|
|First solar energy||(FSLR)||32.1||21.8%||Information Technology|
|Tesla||(TSLA)||25.9||101.5%||Discretionary consumer products|
Source: S&P Global Market Intelligence, IBD.
Follow Matt Krantz on Twitter (X) @matkrantz
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