Surging Stocks That Can Keep Taking Market Share
Taking market share is crucial for companies and their stocks as a large market cap has numerous advantages.
Large-cap companies can secure cheaper financing and have a consistent stream of revenue while capitalizing on the recognition of their brand. This allows a company to operate on a greater scale which can increase profitability in correlation with economies of scale.
Typically for stocks, large-cap companies are valued at $10 billion or higher and tend to have the greatest trading liquidity. Higher trading liquidity allows large-cap stocks to be traded on the stock market quickly, without having a significant effect on their price.
Furthermore, market cap allows investors to compare the size, growth potential, income, and risk of different companies.
Let’s take a look at a few surging stocks that may be able to keep taking market share and boost investors' portfolios.
Technology Leaders with a Large Market Share
With this year’s surge in tech stocks, there are a number of companies that are retaining or growing their hefty valuations.
It's hard to not have this conversation without mentioning Apple AAPL or Nvidia NVDA with a market cap of roughly $3 trillion and $1.2 trillion respectively.
Apple is the highest-valued company on U.S. stock exchanges with Nvidia the fifth largest and continuing to take market share among chipmakers. Nvidia’s market cap is now 122% above the Zacks Semiconductor-General Markets' $54.82 billion average which alludes to why NVDA shares have kept climbing over the years.
Image Source: Zacks Investment Research
Nvidia currently sports a Zacks Rank #1 (Strong Buy) and has soared +223% this year. More astonishing, NVDA shares are now up 12,000% over the last decade and this somewhat unending stellar performance could continue with Nvidia’s chips powering the AI revolution.
As for Apple, its stock has climbed +43% this year and currently lands a Zacks Rank #3 (Hold). Of course, Apple can only fall out of the top spot in terms of market cap but the company’s $48 billion cash pile is indicative of the benefits of taking market share. Furthermore, with a pipeline of famous tech products Apple stock is up +963% in the last 10 years and is usually a viable option for longer-term investors.
Image Source: Zacks Investment Research
A Retail Company Poised to Take Market-Cap
Looking at smaller companies that may be on their way to taking market share or eventually achieving large-cap status is always beneficial. This could correlate with lofty stock market gains and Urban Outfitters URBN stands out in this regard.
With a Zacks Rank #1 (Strong Buy), Urban Outfitters is a popular fashion retailer that caters its apparel and merchandise to younger generations. Urban Outfitters has shown signs of taking market cap in the past hitting a peak of $6.25 billion back in 2018.
While Urban Outfitters' market cap is currently at $3 billion, we can see from the chart below that this is now on par with its Zacks industry further suggesting the company is a sound investment in the space and may have a chance at being a disrupter (and has already been so).
Image Source: Zacks Investment Research
Plus, Urban Outfitters' steady growth is reason to believe it might be taking real market share along the way. Urban Outfitters' stock has climbed +39% YTD as earnings are forecasted to pop 82% in its current fiscal 2024 to $3.18 a share compared to $1.75 per share a year ago.
More importantly to seeing continued brand growth, sales are expected to be up 6% in FY24 and rise another 4% in FY25 to $5.30 billion. Better still, FY25 sales projections would represent 55% growth over the last five years with FY21 sales at $3.45 billion.
Image Source: Zacks Investment Research
Bottom Line
Taking market share puts companies in a position to offer shareholders unprecedented returns in regard to their stocks. This makes keeping an eye on a stock's market cap beneficial to investors as well. To that point, Apple, Nvidia, and Urban Outfitters are three stocks to watch.
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Apple Inc. (AAPL) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report