With less than a month remaining in this year, it’s fair to say that 2024 has been great for the stock market. The S&P 500 index, which is often treated as the benchmark for broader market performance, has risen roughly 28% year to date. Meanwhile, the more growth-focused Nasdaq Composite index has seen its level rise 31.5% over the period.
Nvidia, Palantir, Microsoft, and other big winners may continue to march higher and help set records for major indexes, but investors may also want to consider stocks that still trade down big from previous valuation highs. With that in mind, read on to see why two Motley Fool contributors think that buying these stocks right now would be a smart year-end move.
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Jennifer Saibil: Shares of Carnival(NYSE: CCL) are up 44% this year after more than doubling last year. So investors might be surprised to learn that this top stock, which seems to have rebounded, is still 63% off its all-time highs.
The business itself is doing great, with sales completed back and growing, and demand at unprecedented levels. In the 2024 fiscal third quarter (ended Aug. 31), revenue increased from $6.9 billion to $7.9 billion year over year. Nearly half of 2025 inventory was already booked as of the end of September, and it’s also in its best-ever booked position for 2026.
Profitability still isn’t where it used to be, which was reliable and growing. Today, it’s still returning. But as demand stays strong, the profitability metrics are healthy. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 25% over last year to $2.8 billion in the third quarter, and operating income improved by $554 million from last year to $2.2 billion. Net income was positive in the quarter at $1.7 billion, although Carnival hasn’t returned to consistently positive net income — yet.
So what’s the problem? The main issue for investors is Carnival’s massive debt, which it took on when cruises weren’t running. Although management is paying it off steadily, it’s still highly elevated at $29 billion as of the end of the third quarter. Carnival stock soared on the news of interest rates being cut, because that will help it pay off the debt faster.
Another worry is that demand will eventually slow down, and Carnival’s performance could look choppy before it stabilizes to normal levels. But investors should focus on the long term.
There could indeed be choppiness, but first of all, high demand is outpacing what the market might have envisioned. It has remained elevated throughout inflation and high interest rates, which would normally be headwinds for a company that sells expensive luxury products. It’s now well positioned to maintain strong demand as economic conditions ease up, and the choppiness may end up being minimal.
And investors shouldn’t expect linear growth from any investment. That’s just a setup for disappointment, because it’s rare. You want to focus on the long-term health of an organization and how management is running it. Carnival has a long track record as an industry leader, and it’s already going back to being a market-beating stock.
Keith Noonan: Despite the broader market roaring higher and the semiconductor industry posting big gains, 2024 has been a tough year for Intel(NASDAQ: INTC). The company’s share price is down 58% over the stretch, and intense sell-offs have now pushed the stock down 72% from its lifetime high.
Intel’s business is facing challenges on key fronts. The company’s chip-design unit has been losing ground to rival providers of central processing units (CPUs) including Advanced Micro Devices and Arm Holdings in the PC and server markets, and the dominance of Nvidia’s graphics processing units (GPUs) in AI training has meant that Intel has missed out on the early innings of the artificial intelligence (AI) revolution.
Making matters worse, the push to leverage its chip-manufacturing capabilities to meet emerging semiconductor fabrication needs has been costly. It has yet to show that it can compete with Taiwan Semiconductor Manufacturing, the far-and-away leader in fab services, and expenses will continue to be high as the challenger aims to improve yield quality and production capacity.
On the heels of these challenges, Pat Gelsinger recently announced that he had stepped down as the company’s CEO. The move added another layer of uncertainty to Intel’s outlook, and investors and analysts are now trying to determine whether the company will move to divest its fabrication business or continue to operate as a combined unit.
Following intense sell-offs this year, Intel’s forward price-to-sales ratio (P/S) has been pushed down to roughly 1.7 — a level that’s low on a historical basis. While profitability headwinds have pushed the company’s forward earnings multiple up to approximately 53, I think there’s significant value waiting to be unlocked with the stock.
Attempting to guess exactly what moves the company will make with its structure, growth bets, and potential spin-offs isn’t central to my bull thesis. Instead, I see a beaten-down stock and a company that still possesses incredibly valuable strategic resources. Advanced chip design and fabrication capabilities have never been more important from economic and national defense perspectives, and Intel has enough competitive footing in both categories to deliver wins for shareholders in multiple scenarios.
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Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
Jennifer Saibil has no position in any of the stocks mentioned. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Microsoft, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Carnival Corp. and recommends the following options: long January 2026 $395 calls on Microsoft, short February 2025 $27 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
