The Nasdaq 100 is an index comprising 100 of the top non-financial securities trading on the Nasdaq exchange. This means that only securities listed on the Nasdaq exchange are included in the index. Additionally, it includes companies from sectors such as consumer staples, materials, industrials, and information technology.
While the index comprises household names like Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO), they are certainly far from “underrated.” For investors eyeing the end of the decade, these three standout companies have the potential to deliver significant returns.
Now, let’s unpack the top three underrated Nasdaq 100 stocks to turn $10,000 into $50,000 by 2029.
Automatic Data Processing (ADP)
Automatic Data Processing (NASDAQ:ADP) is the first company among the top underrated Nasdaq 100 stocks to buy in 2024. As a leader in human capital management (HCM) services, ADP’s steady revenue, earnings, and free cash flow growth make it a great long-term investment.
When it comes to Automatic Data Processing, there is not much negative that you can say about the company. While it is not as exciting as other technology companies on the Nasdaq, its essential service offerings are integral to all businesses. The company’s cloud-based platform seamlessly integrates payroll and HR solutions to more than 1 million customers across the globe. Additionally, ADP has embraced the AI revolution with the world’s largest AI-powered HCM dataset, ADP Assist.
After reporting record earnings results in fiscal year (FY) 2023, the company maintained its strong momentum. In FY 2024, revenue increased 7% year over year to $19.2 billion. Net earnings rose 10% to $3.8 billion, with adjusted EBITDA margin up 70 basis points to 25.5%. Management forecasts adjusted earnings per share growth in the 8% to 10% range in 2025, building on its streak of profitable growth.
Ross Stores (ROST)
Ross Stores (NASDAQ:ROST), is a retail business that continues to thrive in 2024. The company provides a wide array of heavily discounted items across the home goods, apparel, and footwear industries.
Ross Stores is an extremely high-quality retail business to keep a close eye on this year. Its off-price chain of retail outlets has proven to be extremely profitable and has done exceptionally well in various economic climates. The company’s strong brand recognition and focus on low-cost, high-quality items has afforded it a loyal customer base over the last few decades.
Surprisingly, the business has been going strong even despite its lack of e-commerce presence. In its Q1 FY24, revenue increased 8% year over year to $4.9 billion. Net earnings swelled 31% year over year to $488 million, with comparable sales up 3% from the year prior. Additionally, operating margin expanded by 205 basis points to 12.2%. With stronger liquidity coming into 2024, Ross is well-positioned to drive comparable sales and earnings growth through 2029.
ON Semiconductor (ON)
ON Semiconductor (NASDAQ:ON) is an American semiconductor company that provides a wide range of chips and sensors for the electric vehicle (EV), energy storage, and industrial markets. The company’s recent blockbuster investments in silicon carbide (SiC) modules provide it with ample room for growth over the next decade.
ON Semiconductor is the backbone of industries that are set to expand rapidly over the next several decades. As governments and corporations continue to invest billions of dollars into the clean energy transition, demand for ON Semiconductor’s products will rise. In 2024, the market is seemingly bearish on the entire clean energy sector except for a few names. The EV sector is bearish with Tesla (NASDAQ:TSLA) forecasting a decline in vehicle deliveries and gross margins. However, this negative sentiment is not affecting ON Semiconductor’s planned investments in 2024.
It recently announced the acquisition of image-sensing company SWIR Vision Systems and continues to expand its SiC manufacturing capacity. For investors searching for the best underrated Nasdaq 100 stocks to buy, ON stock should certainly be one of the top considerations.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.