Every month, we ask our freelance writers to share their top US stocks with investors — here’s what they rate highly for September!
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Axon
What it does: Produces a range of self-defence technology and weapons for military, law enforcement, and civilians.
By Mark David Hartley. Previously named Taser after its most popular product, Axon (NASDAQ: AXON) rebranded in 2017 and branched out into a range of defensive technologies. These include bodycams, drones and forensic software, all designed with law enforcement and justice in mind. With the political landscape becoming increasingly unstable in the US, defensive technologies are in high demand. Police and military are rapidly adopting ever more advanced technology to deal with both internal and external terror threats.
Axon is at the forefront of this industry and perfectly positioned to meet the demand. The share price is already up 48% this year and I expect further growth. In its quarterly earnings posted earlier this month, earnings per share (EPS) and revenue beat analyst’s expectations by 18% and 5.4% respectively. But like many US tech stocks, it has a high price-to-earnings (P/E) ratio of 97 and is 7% overvalued based on future cash flow estimates.
Mark David Hartley owns shares in Axon.
Mastercard
What it does: Mastercard is the world’s second-largest payment processor, operating in over 210 countries and territories.
By Charlie Carman. Mastercard (NYSE:MA) is a high-margin business with a wide moat. The group dominates the global payments market in a duopoly with Visa.
Not only have its revenues compounded for decades but growth shows little sign of slowing. By the end of Q2, Mastercard partners had issued 3.4bn cards featuring the firm’s brands — an increase of about 200m new cards since Q2, 2023.
Further growth opportunities are in Mastercard’s crosshairs. Data and analytics are key focus areas in a world where artificial intelligence will play an increasingly important role. In addition, the company’s boosting its investment in underdeveloped payment markets, like Africa.
The valuation’s a potential risk for further share price growth. With a forward price-to-earnings (P/E) ratio of around 32.7, Mastercard shares are priced for perfection, leaving little room for error.
Nonetheless, Mastercard has long been among the world’s most reliably profitable companies. I think this will remain the case for some time.
Charlie Carman owns shares in Mastercard and Visa.
Nike
What it does: Nike is the world’s largest supplier of athletic shoes and clothing and a major sporting equipment manufacturer.
By Paul Summers. Holders of Nike (NYSE:NKE) stock have endured a difficult year so far. As I type, the shares are down over 20% in 2024 alone.
If that sounds bad, the situation was even worse in June. Back then, the trainer titan said that it expected a drop in quarterly revenue due to competition from increasingly popular brands like On and Hoka. Lower demand in international markets was also blamed and the earnings outlook for 2025 was lowered. This pushed the company’s value down to levels not seen since the early days of the pandemic.
Since then, we’ve seen something of a post-Olympics bounce. Whether this lasts is another thing entirely.
However, a sustained recovery might be on the cards if Nike can get innovating again. Lowering its prices and reconnecting with wholesale partners, rather than persisting with a direct-to-consumer strategy, could also help.
Paul Summers has no position in Nike
ServiceNow
What it does: ServiceNow is a leading provider of cloud-based workflow automation and management solutions.
By Harshil Patel. ServiceNow (NYSE:NOW) might not be a household name, but it’s well known by many IT professionals.
Its platform helps organisations to become more efficient. For instance, it can automate routine tasks, and streamline processes across business areas.
ServiceNow benefits from a strong market position, which it has built by offering simple but powerful tools that are easy to use. This results in high customer retention.
One way it plans to remain competitive is to focus on innovation. Its investments in AI and integrations across its platform should help to keep ServiceNow at the forefront of workflow automation technology for some time.
Bear in mind that this stock is not cheap though. With a price to earnings ratio of 50, any short-term challenges could result in a volatile share price.
That said, this business is growing sales and maintaining margins. It’s also well-run and I’d happily add this US stock to my ISA.
Harshil Patel does not own shares in ServiceNow.
Uber Technologies
What it does: Uber operates the world’s largest ride-hailing network and also offers food delivery.
By Ben McPoland. I recently sold my shares in Nike and I’m planning to redeploy the money into Uber Technologies (NYSE: UBER).
The company’s ongoing double-digit growth is impressive. In Q2, revenue increased 16% year on year to $10.7bn, or 17% on a constant currency basis. Trips grew 21% to 2.8bn, amounting to approximately 30m trips per day on average.
Crucially, profits are really starting to motor higher. The quarter saw free cash flow of $1.7bn, and this year analysts have a net profit of $4.8bn pencilled in. Profits of $9bn+ are forecast for 2026.
Of course, these projections might fall short. And Uber does face some regulatory challenges, meaning it might have to pay drivers more, which is a risk to profits.
However, the company could also end up being one of the biggest beneficiaries of the shift to autonomous vehicles (eventually resulting in less drivers). It’s partnered with industry leaders, including Aurora Innovation, Waymo, Cruise and BYD. Trips taken in self-driving vehicles on Uber’s platform rose sixfold in Q2.
The stock isn’t cheap, but I can see why 45 Wall Street analysts out of 51 currently have it down as a ‘buy’.
Ben McPoland does not have a position in any stocks mentioned.
This post was originally published on Motley Fool
