Artificial intelligence and pent up travel demand have been powerful catalysts for the post-pandemic stock market. Consider the three best-performing stocks inside the S&P 500 (SNPINDEX: ^GSPC) throughout the last two years, as listed below:

• Nvidia (NASDAQ: NVDA) shares advanced 775%.

• Super Micro Computer (NASDAQ: SMCI) shares advanced 591%.

• Royal Caribbean Cruises (NYSE: RCL) shares advanced 302%.

Importantly, Wall Street expects more gains from all three growth stocks. Nvidia’s median goal of $150 per share implies 26% upside from its current share price of $119. Super Micro’s median goal of $675 per share implies 54% upside from its current share price of $437. And Royal Caribbean’s median goal of $184 per share implies 12% upside from its current share price of $164.

Investors should never rely too heavily on price targets, but these three monster growth stocks warrant further consideration. Listed below are the vital details.

Nvidia: 2-year return of 775%

Nvidia graphics processing units (GPUs) are the industry standard in data center accelerators, meaning they speed up tasks like training machine learning models and running artificial intelligence (AI) applications. GPUs perform technical calculations faster and more efficiently than central processing units (CPUs), and Nvidia repeatedly set records on the MLPerfs, objective tests that measure AI training and inference capabilities.

The company holds as much as 95% market share in AI chips, based on analysts. But Nvidia is basically formidable because it has spent a few years developing its CUDA platform, a software ecosystem that streamlines data preparation and application development across a broad range of disciplines. The company has also prolonged its ability to monetize AI by branching into cloud services and adjoining hardware markets, including data center networking and server CPUs.

In the course of the last two years, Nvidia’s revenue increased 240% and GAAP earning soared 599%. The company is well positioned to care for that momentum. Grand View Research expects the graphics processor market to grow at 27% annually through 2030 as a consequence of strong demand for AI accelerators.

Nvidia shares declined following its second-quarter report, despite strong results, but most analysts remain bullish. Angelo Zino at CFRA believes Nvidia “will probably be a really powerful company to our civilization over the following decade since the world becomes more AI-driven.” More broadly, Wall Street expects the chipmaker’s earnings to increase at 36% annually over the following three years. That estimate makes the current valuation of 56 times earnings seem reasonable.

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Super Micro Computer: 2-year return of 591%

Super Micro Computer develops high-performance compute platforms for enterprise and cloud data centers. Its portfolio ranges from individual servers and storage systems to full server racks optimized for workloads like artificial intelligence. The reality is, Super Micro is the leading supplier of AI servers, and its market share is predicted to realize 17% in 2026, up from 10% in 2023, based on Bank of America analysts.

What sets Super Micro apart are internal engineering capabilities and its modular approach to development, each of which support rapid product rollout. CEO Charles Liang says the plug-and-play nature of its servers lets the company quickly construct a broad range of products featuring the most recent chips from suppliers like Nvidia. In turn, Super Micro tends to beat competitors to market by two to six months.

Throughout the last two years, Super Micro’s revenue increased 188% and GAAP earnings jumped 277%. The company is well positioned to care for that momentum because analysts at JPMorgan expect AI server sales to increase sixfold between 2023 and 2028. Furthermore, Super Micro is a pacesetter in direct liquid cooling (DLC) solutions, which lower data center costs by controlling server temperatures more efficiently than traditional air cooling. Demand for DLC should increase in lockstep with demand for AI servers because they throw off a great deal of heat.

Super Micro shares recently nosedived when short-seller Hindenburg Research discovered “accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.” But most analysts remain bullish. Wall Street expects Super Micro’s earnings to increase at 49% annually over the following three years. That consensus estimate makes the current valuation of twenty-two times earning look pretty low price.

Royal Caribbean: 2-year return of 302%

Royal Caribbean is the second-largest cruise company on the planet. Its fleet of 68 ships spans five brands that travel to about 1,000 different destinations. That scale affords the company a durable economic moat inside the capital-intensive cruise industry. Furthermore, Jaime Katz at Morningstar recently wrote, “Royal Caribbean has carved out a compelling position in cruising as a result of its contemporary brand and compelling destinations.”

In November 2022, Royal Caribbean outlined the Trifecta Program, a three-year financial initiative meant to return the company to pre-pandemic strength: (1) Adjusted EBITDA per available passenger cruise days of at least $100, (2) adjusted earnings per share of at least $10, and (3) return on invested capital of at least 13%. Those targets were chosen because they exceeded pre-pandemic records.

Royal Caribbean satisfied all three criteria in essentially essentially the most recent quarter, putting it 18 months ahead of schedule. Meaning the company is (1) monetizing customers more efficiently, (2) operating more profitably, and (3) allocating capital more effectively. Royal Caribbean also reinstated its dividend, one other sign of improving financial strength. The quarterly payout is currently $0.40 per share, which provides a dividend yield of roughly 1%.

Wall Street expects Royal Caribbean’s adjusted earnings per share to grow of 19% annually through 2026. That estimate makes the current valuation of 16.3 times adjusted earnings look reasonable, but not low price. I say that because shares traded around 14 times adjusted earnings inside the years leading as much because the pandemic. The current price is a superb entry point, but I might not fault investors that wait for a fairly cheaper valuation.

Do you may have to speculate $1,000 in Nvidia immediately?

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JPMorgan Chase is an promoting partner of The Ascent, a Motley Idiot company. Bank of America is an promoting partner of The Ascent, a Motley Idiot company. Trevor Jennewine has positions in Nvidia. The Motley Idiot has positions in and recommends Bank of America, JPMorgan Chase, and Nvidia. The Motley Idiot has a disclosure policy.

3 Supercharged Growth Stocks Up 302% to 775% in 2 Years to Buy Now, Based on Wall Street was originally published by The Motley Idiot