20 S&P 500 Stocks With Soaring Sales and Improving Profit Margins
When revenue growth and margin expansion show up together, they often signal powerful operating momentum. Companies that can grow the top line quickly while boosting efficiency or pricing power tend to generate accelerating cash flow, which can support reinvestment, buybacks, dividends, or M&A. Below are 20 S&P 500 names that, in their most recently reported fiscal periods through 2024, paired robust sales growth with year-over-year improvement in gross or operating margins. They span AI infrastructure, software, consumer platforms, healthcare innovators, industrial leaders, and payments networks.
Note: Individual company fundamentals evolve quickly. The examples and themes here reflect trends visible through 2024 filings and commentary; always check the latest results before making decisions.
AI infrastructure and semiconductors
1) Nvidia (NVDA)
The bellwether of AI computing enjoyed explosive data-center demand, driving outsized revenue growth and notable operating leverage. Mix shift to high-margin platforms (HGX/DGX systems, networking) and software stack monetization bolstered margins.
2) Broadcom (AVGO)
AI accelerators, custom silicon, and resilient infrastructure software combined to lift sales, while disciplined cost control and a rich mix supported best-in-class margins. The company’s focus on mission-critical products translates into strong pricing power.
3) Advanced Micro Devices (AMD)
Growth in data-center GPUs and EPYC server CPUs added a new leg of expansion. As higher-margin data-center products scale, AMD’s blended gross margin profile has trended upward.
4) Applied Materials (AMAT)
AI and high-bandwidth memory needs have driven wafer fab equipment demand. Services and advanced nodes contribute to a richer mix, supporting incremental margin improvement alongside revenue growth.
5) Micron Technology (MU)
The memory cycle turned up, with AI-related HBM demand and disciplined supply helping lift sales from trough levels. As pricing improved, margins inflected positively after a difficult downcycle.
6) Qualcomm (QCOM)
Flagging smartphone demand rebounded with AI-capable handsets, and diversification into automotive and IoT continues. Licensing and premium-tier chips support healthy gross margins as volumes recover.
Cloud, software, and cybersecurity platforms
7) Microsoft (MSFT)
Strong cloud demand and early AI monetization in Microsoft 365 and Azure helped sustain double-digit growth. Operating leverage from at-scale cloud infrastructure and careful expense management supported margin gains.
8) ServiceNow (NOW)
High retention and large-deal momentum in digital workflows kept subscription revenue growing at a healthy clip. Improved sales efficiency and cloud scale contributed to expanding operating margins.
9) Salesforce (CRM)
A strategic pivot to profitable growth—streamlined costs, focus on cash flow, and disciplined investment—combined with steady cloud subscription growth to boost operating margins.
Consumer internet and networks
10) Meta Platforms (META)
Advertising growth reaccelerated with improved targeting and product innovation, while cost discipline after a “Year of Efficiency” expanded operating margins. Investments in AI infrastructure aim to sustain engagement and monetization.
11) Alphabet (GOOGL)
Search and YouTube advertising rebounded, and Google Cloud’s path to profitability aided group-level margin improvement. Opex discipline and mix shift toward higher-margin services helped margins expand.
12) Amazon (AMZN)
North America retail margins improved with logistics optimization and marketplace advertising. AWS growth and ad revenue expansion drove consolidated margins higher even as the company continued investing for scale.
13) Netflix (NFLX)
Paid sharing and the ad-supported tier expanded the monetization surface area. Global scale, content amortization discipline, and pricing helped lift operating margins alongside renewed subscriber growth.
14) Uber Technologies (UBER)
Scaling mobility and delivery with disciplined incentives turned growth into durable profitability. Advertising and membership (Uber One) contribute incremental high-margin revenue.
Consumer brands with pricing power
15) Chipotle Mexican Grill (CMG)
Traffic, menu pricing, and operational execution drove strong same-store sales growth. Restaurant-level margins expanded on sales leverage and productivity improvements, even with commodity volatility.
Industrial leaders
16) Caterpillar (CAT)
Strong pricing, robust demand in energy and mining, and backlog support sustained revenue growth. Mix and cost discipline drove operating margin expansion through the cycle.
Healthcare innovators
17) Eli Lilly (LLY)
Blockbuster GLP-1 therapies for diabetes and obesity have driven a step-change in sales. Manufacturing scale-up and mix lift supported margin expansion despite heavy investment in capacity.
18) Intuitive Surgical (ISRG)
Procedure growth and installed-base expansion boosted high-margin instruments and services. As utilization rises, recurring revenue mix and operating leverage enhance profitability.
Payments and transaction platforms
19) Mastercard (MA)
Cross-border travel recovery and resilient consumer spending kept volumes rising. High incremental margins on growing transaction volumes and services (cyber, data) supported operating margin gains.
20) Super Micro Computer (SMCI)
Rapid growth in AI-optimized servers and rack-scale systems propelled revenue sharply higher. Configurable architectures and supply-chain execution supported improving gross margins during the scale-up.
Why sales growth plus margin expansion matters
– Operating leverage: Fixed-cost bases can produce outsized profit growth when revenue scales.
– Pricing power and mix: Expanding margins often reflect a shift to higher-value products or services.
– Healthy cash generation: Strong margins fund innovation and shareholder returns without overreliance on capital markets.
– Competitive moats: Sustained growth with improving profitability can indicate durable advantages rather than transient demand spikes.
Common threads behind the leaders
– AI as a demand engine: From chips (NVDA, AVGO, AMD, MU) to servers (SMCI) and cloud platforms (MSFT, AMZN, GOOGL), AI is fueling multiyear capex and software monetization cycles.
– Software efficiency: Platforms emphasizing retention, upsell, and sales productivity (NOW, CRM) are converting growth to cash more effectively.
– Platform economics: At-scale consumer networks (META, NFLX, UBER, AMZN) are widening margins through better ads, memberships, logistics, or content efficiency.
– Pricing power: Category leaders with brand or technology edges (CMG, CAT, LLY, ISRG, MA) can raise prices or shift mix to protect and expand margins.
How to recreate this screen yourself
– Universe: Current S&P 500 constituents.
– Sales growth: Filter for trailing 12-month or latest fiscal-year revenue growth above a threshold (for example, 10–15%+).
– Margin delta: Require year-over-year expansion in gross margin and/or operating margin.
– Quality guardrails: Positive free cash flow, manageable leverage, and consistent return on invested capital can reduce false positives.
– Cross-check: Read recent earnings transcripts for commentary on sustainability (pricing vs. volume, mix, cost cuts, competitive dynamics).
Key risks to watch
– Cyclicality: Semis and industrials can face sharp downcycles that reverse margin gains.
– Competitive intensity: In software and consumer internet, rapid innovation or pricing pressure can compress margins.
– Regulatory and reimbursement: Healthcare growth trajectories can be sensitive to policy changes.
– Execution and supply chain: Fast-growing hardware suppliers must balance capacity expansion with quality and working-capital discipline.
– Macro sensitivity: Payments and ad-driven businesses depend on consumer and corporate spending trends.
Bottom line
Across the S&P 500, a cohort of companies is coupling rapid revenue growth with improving margins—often thanks to AI adoption, platform scale, pricing power, or operating discipline. While these dynamics can be powerful drivers of shareholder value, they’re not guarantees. Validate the latest numbers, understand what’s behind the improvements, and assess whether the competitive advantages enabling today’s momentum can persist over a full cycle.
This article is for informational purposes only and is not investment advice. Always verify up-to-date financials and consider your own objectives and risk tolerance before investing.
