Investors looking for lucrative opportunities in the stock market are looking in the right place. Technological actions have significantly outperformed the broader market in recent years. For example, Selected Technology Sector SPDR ETF almost doubled the yield of the S&P 500 since 2019. Here are two stocks with near-term growth catalysts that you should buy now.
1. Dell Technologies
Dell Technologies (NYSE: DELL) is widely known as a PC brand, but it is also a provider of storage, networking and artificial intelligence (AI) solutions for data centers. Strong demand for AI Servers have driven Dell’s business this year and propelled the stock to new highs. The momentum in Dell’s server business makes the stock a compelling buy right now after the recent pullback.
Dell is still reliant on a sluggish PC market, where its client solutions group posted flat revenue growth in the fiscal first quarter of 2025, which ended May 3. That business accounts for the bulk of Dell’s total revenue, but its infrastructure group, which includes servers, saw a strong 22% year-over-year increase, bringing the company’s total revenue up 6% to $22 billion.
Dell’s order backlog for AI servers suggests the company is only just beginning to seize this opportunity. The order backlog increased about 31% from the previous quarter to $3.8 billion, showing that AI servers are quickly becoming a significant contributor to revenue.
The AI server market is still in its infancy. Enterprises will continue to rapidly increase their investments in AI, as most executives believe it offers a competitive advantage. Additionally, Dell has significant support as IT spending continues to grow in line with the economy, which should benefit its overall business over the long term.
The reason the stock has been down over the past month is that stronger sales growth from AI servers could put pressure on the company’s margins in the near term. Management expects adjusted earnings to grow about 7% this year, less than full-year revenue growth of about 8%. But the important factor is that AI infrastructure solutions will be a long-term benefit to the company’s revenue and earnings. That’s why Wall Street analysts are currently predicting Dell’s earnings will grow at a 12% annualized rate in the coming years.
The outlook for double-digit earnings growth is more than enough to fuel the stock’s rally. Shares look downright cheap with a forward price-to-earnings (PE) ratio of 11, which is less than half the S&P 500 average.
2. Netflix
Netflix (NASDAQ: NFLX) Netflix stock has soared since its 2022 low. Subscriber growth has accelerated to a 15% rate as management has stopped sharing passwords and encouraged more users to pay for a subscription. But investors are still underestimating Netflix’s potential for margin expansion, profit growth and pricing power as it begins to offer live streaming content, particularly sports.
Netflix has become a ubiquitous brand in…
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