Top Day Trading Stocks for 2024

Day trading stocks is inherently risky. Traders that engage in the practice are attempting to “catch a falling knife,” which is pretty dangerous. They are betting on a short-term gain, trying to spot a dip in the share price, speculating that it will quickly rebound. The risk is that the stock price will fall even further.

Experienced traders sometimes do the opposite and bet on falling prices, with the help of derivatives. This is called short-selling. However, beginners had better avoid this type of trading.?

Rewards can be massive with day trading, but the risks are huge. To mitigate them, we recommend choosing stocks with a track record of success that are likely to bounce back from temporary setbacks. They should also be traded frequently, which makes it easier to quickly get in and out of positions. Stocks that trade often tend to have good volatility, and day traders can exploit those price swings. In this guide, we take a look at the 10 best stocks for day trading.

A Closer Look at the Best Day Trading Stocks in 2024

Now, let’s take an in-depth look at the best stocks for day trading:

1. Microsoft: Cloud, AI Fuels Its Continued Growth

Microsoft became the world’s most valuable company in February 2024, with a market cap of $3 trillion. The technology company has invested heavily in OpenAI, which developed ChatGPT and that should help it drive revenue across its various businesses for years.

The company just reported fiscal 2024 second-quarter numbers on Jan. 30, and it’s obvious why investors continue to be excited. Revenue was $62 billion, up 18%, year over year. Net income totaled $21.9 billion, with EPS of $2.93, both up 33% over the same period last year. The big drivers were the Azure cloud platform and commercial revenue from Office 356, which rose 33% and 17%, respectively.

The stock, despite its success, remains volatile for several reasons. At times of rising interest rates investors stay away from tech stocks, and the company’s cloud computing business faces so much competition that any new release or new product by a competitor causes a ripple effect in the stock’s price.

2. Alphabet: Big Plans for AI-Enabled Search

The tech company gets most of its revenue from advertising sales on Google Search and YouTube, but it sees the most growth from Google Cloud. Alphabet was already quite active in AI, particularly in making its searches faster and more responsive, and just launched Gemini Ultra, the improved version of AI assistant Bard.

In the fourth quarter, revenue was $86.3 billion, up 13%, year over year. Net income was $20.7 billion, up 52% year over year, while EPS was $1.64 up from $1.05 a year earlier. Revenue from Google Cloud, though still a small contributor to overall revenue, grew 25.6% from a year earlier to $9.2 billion. Google Search brought in $48 billion in revenue, up 12.7%, year over year.

The company’s margins should expand as it has recently reduced headcount and cut down on office space.

3. Nvidia: Perhaps the Best AI Play Out There

Nvidia makes the technology that powers AI platforms run by more than 40,000 companies, including many of those in this list, such as Amazon, Alphabet, Meta and Microsoft. As more AI start-ups launch, the number of customers for Nvidia’s graphics processing units (GPUs), central processing units (CPUs), networking, AI foundry services and NVIDIA AI Enterprise software grows.

In the third quarter, Nvidia said revenue grew 206%, year over year, to $18.1 billion, led by record data center revenue. The latter was $14.5 billion, up 41% from the second quarter and 279% from the third quarter of 2022. The company is forecasting another jump to $20 billion in fourth-quarter revenue. Nvidia’s third-quarter EPS was $3.71, increasing more than 12 times from the same quarter a year earlier.?

It also just launched its new 40-series Super GPUs, high-end graphics cards that should help the company stay ahead of rival Advanced Micro Devices (NASDAQ: AMD).

4. Amazon: Services Driving Improved Revenue, Earnings

The online retail giant sells its own products and fulfills orders on behalf of other businesses. It also derives revenue from its subscriptions, advertising and web hosting. The company’s service divisions, which have higher margins, are now bringing in more money than Amazon’s retail side.

Amazon benefits from the continued rise in e-commerce and the growth of AI, which has helped it be more efficient in taking and delivering orders. In the quarter, Amazon introduced AI-powered personalized size recommendations and said it’s planning to launch Rufus, an AI-enabled personal shopping assistant.

Amazon reported a record fourth-quarter with $170 billion in revenue, up 14%, year over year. Net income was? $10.6 billion in the quarter, or $1 in EPS, compared with $300 million, or $0.03 of EPS a year earlier. For the year, sales were $574.8 billion, up 12% and net income was $30.4 billion, or $2.90 in EPS, compared to a loss of $2.7 billion, or a loss of $0.27 per share, in 2022.

5. Caterpillar: Leveraging Its Market Share, Energy Projects

The world’s largest maker of heavy equipment has a 13% market share worldwide. It just reported its best financial year in its 98-year history, with increased prices and growth in financing revenue making up for a slight decline in sales volume. On top of that, dealer inventories are dropping, meaning that sales volume will increase this year.

In 2023, the company said it had sales of $67.1 billion, up 13% and EPS of $20.12, up 53%. In the fourth quarter, sales totaled $17.1 billion, up 3%, year over year and EPS of $5.28, up 89% over the same period last year. The drivers for growth included a 12% gain in the quarter in energy sales (such as drill rigs, gas compressors and locomotives) and a 15% rise in financing revenue.

The company is a dividend aristocrat that has raised its dividend for 30 consecutive years, including a 8.3% jump last year to $1.30 a share, equaling a yield of around 1.6%.

6. Eli Lilly: Obesity, Diabetes Drugs Lead the Way for Gains

Lilly’s new obesity drug Zepbound and new Type 2 diabetes therapy Mounjaro, which are different formulations of its tirzepatide, have garnered a lot of attention.

Lilly saw revenue rise 28%, year over year in the fourth quarter to $9.35 billion, led by Mounjaro and Zepbound. Mounjaro alone accounted for? $2.2 billion of that. Zepbound wasn’t approved until Nov. 8, and in less than two months, did $175 million in revenue. Fourth-quarter EPS was $2.42, an increase of 13% year on year. It expects revenue to climb to between $40.4 billion to $41.6 billion from $34.1 billion.?

In addition, the company has a huge pipeline because it has been willing to spend on research and development. In 2023, it spent $8.8 billion in R&D, up 23% from the year before. That includes promising drugs that are coming off positive phase 3 trials: Alzheimer’s therapy donanemab, ulcerative colitis drug mirikizumab and lymphoma therapy pirtobrutinib.?

7. Meta Platforms: A Growth Stock Getting Value From Ads

Most of the company’s revenue, roughly 98%, comes from the advertisements it sells on its platforms of Instagram, Facebook and WhatsApp. In the fourth quarter, revenue was $40.1 billion, up 25%, year over year. EPS soared by 203% over the same period last year, to $5.33.

The company’s shares got a bump when it said, for the first time, it would begin paying out a dividend. To start with, it will only be $0.50 per quarterly share, meaning a yield of around 0.44%. That’s not a lot but it’s a nice add-on to stock price acceleration.

That’s not to say the company is bullet-proof. It took a full year for the company’s ad sales to return to growth after Apple’s iOS privacy changes cut into Meta’s targeted ads. It has frequently been in the crosshairs of Senate hearings for its privacy failures and the company’s reliance on growing ad sales from China could cause problems down the line. However, regardless of short-term concerns, the stock always appears to bounce back.

8. Apple: The Best Priced Stock for Day Trading

Investors are so confident in Apple, that, even after the company issued underwhelming guidance, it can’t keep the company’s shares down for long. In the company’s fiscal 2024 first-quarter report, it said that it expects revenue to fall 5%, year over year in the first quarter, with iPhone sales dropping 10%. For a day, the stock fell to a three-month low of $179.25, but by the next day, it bounced back.

Taking a deeper look at Apple’s earnings, it’s hard to find much of a weakness. In the quarter, revenue grew 2%, year over year, to $119.6 billion and EPS was $2.18, up 16% over the same quarter a year ago. The key is, the other shoe hasn’t dropped as people are waiting to see what the company will do with generative AI, such as using it in a new iOS operating system for its iPhones and iPads, or potentially to improve its Siri chatbot.

The company has increased its quarterly dividend, counting stock splits, each of the past 11 years, including a 4% boost last year to $0.24. That equals a yield of around 0.51%. Unlike some of the other stocks on this list, it doesn’t appear to be overpriced as it is trading at under 30 times earnings.

9. Marathon Digital: Benefits From Bitcoin’s Bounce-Back

Marathon just made a big move to improve its efficiency and production of bitcoin by buying mining sites that total 390 megawatts of capacity operated by Hut8 in Granary, Texas, and Kearney, Neb. It said it expects to take control of the sites by April 30, lowering the operating fees and its costs to produce bitcoin.

In January, the company averaged producing 1,084 bitcoin a day, up 58%, year over year. Its energized hash rate, which takes into account the amount of energy it takes to produce the computational power to secure the network, improved by 262% to 26.4%, compared to January in 2022.

The company is benefiting from higher bitcoin prices and from its own increased production. In the third quarter, it said it had revenue of $97.8 million, up from $12.7 in the same quarter a year earlier. Net income was $64.1 million or $0.35 in EPS, compared to a net loss of $72.5 million or an EPS loss of $0.62 in the third quarter of 2022.

10. Palantir Technologies: Commercial Revenue Spurs Growth

The software company isn’t a new player in AI. Since its founding in 2003, its software platforms have helped analyze large amounts of data, especially in counterterrorism operations, health care, and finance.?

The company derives revenue from government and commercial contracts, but the latter is what is seeing the most growth. The biggest concern about the stock is, thanks to a big run up over the past year, that it’s trading at more than 258 times earnings, a heady valuation.

In the fourth quarter, its revenue rose 20%, year over year, to $608 million and net income grew by 203%, year over year, to $93.4 million, its fifth consecutive quarter of profitability.? Government revenue at $324 million rose 11% rise, while commercial revenue jumped 32% to $274 million. In 2024, the company said it expects revenue between $2.652 billion and $2.668 billion and U.S. commercial revenue in excess of $640 million, a growth of at least 40%.

Where to Get Undervalued Stock Tips and Insights

AltIndex, a subscription-based service, is particularly useful to day traders because it uses alternative data and artificial intelligence (AI)? to rate stocks, and it updates its data regularly throughout the day.?

The company even has alternative stock tips that it regularly updates, to show which stocks are on the move and where the sentiment is coming from for that move.

The service utilizes a variety of data sources, including app downloads, social media, web searches, customer satisfaction ratings, and other information regarding a company.

AltIndex takes the information it compiles about a company and compares it to similar stocks, using machine learning to come up with investment insights. Stocks are scored from 1 to 100, making the decision-making process easier for investors.

AltIndex is widely used, with more than 10,000 members. It provides more than 100,000 unique stock insights and alerts each day and has a strong win rate of 75% from its AI stock picks.

You can try AltIndex’s Starter Plan for just $29 a month and receive stock picks directly to your email, as well many other useful features.

Conclusion

Day trading can be done successfully as long as you are willing to do the research on stocks to take advantage of short-term market overreactions.

The best day traders take a disciplined approach by consistently trading in the same manner and by sticking to the stocks they know best. Day trading can be a good supplement to an overall investing strategy, provided you have the time to make it work.

References

https://news.microsoft.com/2023/09/19/microsoft-announces-quarterly-dividend-increase-5/

https://www.pcmag.com/news/ces-2024-nvidia-geforce-rtx-4070-4080-super-cards-launch-january

https://investors.caterpillar.com/stock-info/dividend-history/default.aspx

https://www.fda.gov/news-events/press-announcements/fda-approves-new-medication-chronic-weight-management

https://investor.apple.com/dividend-history/default.aspx

https://ir.mara.com/news-events/press-releases/detail/1340/marathon-digital-holdings-to-assume-full-operational

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Jim Halley

Editor

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Jim Halley

Editor

I am an experienced journalist who has also worked as an editor and writer at the Savannah Morning News, Salt Lake Tribune, USA Today, Stars and Stripes, and The Motley Fool. I spent the first half of my career in sports journalism, but in recent years have switched to writing about my other passion, stocks, particularly healthcare, real estate and consumer staples stocks. I've won numerous journalism awards from the Associated Press and state press associations and have been a judge for the Georgia Sportswriters Association. I've written one non-fiction book, Just One More Time, about Georgia Southern football, and…

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