If I Could Only Buy 3 Stocks in the Last Half of 2024, I'd Pick These | The Motley Fool (2024)

There are a lot of exciting companies out there, offering investors earnings growth, dividends, and the promise of top returns over time. Potential winners exist across industries, from consumer goods to technology. And this often makes it very difficult to decide which stocks to buy, especially if your budget is limited.

Luckily, a few companies do stand out as fantastic buys -- for their earnings performance so far, future prospects, and their valuation right now. These are players you can buy today and hold on to for the long term because their growth stories include plenty of chapters ahead that you won't want to miss out on -- and these chapters could result in a major lift for your portfolio.

So, don't worry if you can't invest in dozens of stocks right now, and instead consider the players I'll talk about here. If I could only buy three stocks in the second half of this year, I'd pick these thanks to their solid earnings track records and potential to win over the long run.

1. Chewy

Chewy (CHWY 2.09%) has become your pet's best friend -- pet lovers recognize this, and that's why they've flocked to the e-commerce company for everything from pet food to treats and even pet insurance. This has helped Chewy's revenue soar, and the growth company reached profitability as of 2022.

I like the fact that Chewy's regular customers keep coming back because this offers visibility on future revenue. You can see this through the success of Autoship, a program that automatically reorders and ships your favorite products to you. Autoship sales make up more than 77% of Chewy's quarterly sales.

Chewy also is expanding in a wise way, recently opening e-commerce operations in Canada, a market with profitability prospects on par with that of the U.S. market. And Chewy just launched a chain of veterinary practices, a great way to connect with a new audience of pet parents.

This picture looks promising, but share performance hasn't yet followed -- leaving Chewy trading at the very attractive level of 26x times forward earnings estimates.

2. Amazon

Amazon (AMZN -0.58%) has already proven its strengths in the two high-growth businesses of e-commerce and cloud computing. The company brings in billions of dollars in revenue and profit annually thanks to its dominance in these areas.

Now, you can get in on Amazon as it readies to excel in the newish area of artificial intelligence (AI). Amazon uses AI to improve its own operations, resulting in earnings gains over time. But, even better, Amazon Web Services (AWS), the company's cloud computing business, offers customers a full suite of AI products and services. This helped AWS reach a $100 billion annual revenue run rate as of earlier this year.

With AI in its early days, I expect to see more growth from AWS thanks to its AI offerings -- and this is particularly important since AWS generally has been the profit driver at Amazon.

Today, Amazon trades for 40x forward earnings estimates, which isn't cheap, but it's well worth the price considering the company's leadership in two major industries -- and the potential of explosive growth down the road due to its AI investments.

3. Meta Platforms

Meta Platforms (META -0.13%) is a social media powerhouse, with its apps that have become household names -- and part of our daily routines. The company, owner of Facebook, Messenger, Instagram, and WhatsApp, says more than 3.2 billion people use at least one of these apps every day.

Meta has a significant moat, or competitive advantage -- and part of this moat is the idea that it's difficult to switch to another social media platform. People know that all of their contacts use WhatsApp, for example, and probably won't follow them to a rival platform.

The company generates most of its revenue from advertising as advertisers flock to these apps to reach users. Today, Meta is investing to add AI features to its apps -- this already has begun -- and as people spend more and more time on Meta apps, advertisers could increase their spend here, too.

Revenue is climbing at Meta, the company is highly profitable, and it even launched its first-ever dividend earlier this year. This makes Meta, trading at only 24x forward earnings estimates, a bargain and a smart addition to your portfolio in the second half.