Investing a Thousand Dollars in Each of These Three Stocks at the Beginning of 2024 Resulted in a Portfolio Valued Over One Hundred Thousand Dollars as of Today
Typically, you'd expect substantial profits from stocks if you invest in them for extended periods, potentially spanning decades. However, this year's blazing stock market has seen some stocks offer life-altering returns in relatively short time frames. While Nvidia, a leading chipmaker, boasting a 2,500% increase over the past five years, stands out as a top growth stock, numerous others have surged in a brief period.
Three stocks that have outshone Nvidia this year and have soared past its performance are AppLovin (APP 0.25%), MicroStrategy (MSTR 4.35%), and Summit Therapeutics (SMMT -2.00%). If you had invested $5,000 in each of these stocks at the beginning of the year, your investments would now be worth more than $100,000. Let's delve into how much a $5,000 investment in each of these stocks would be worth as of the most recent market close, why they've excelled, and if they're poised to rise further.
AppLovin: $42,440
AppLovin, a soaring software firm, specializes in monetizing games and applications. It's also exploring a potentially valuable opportunity with its ad-tech software in e-commerce, leading many investors to believe this red-hot stock, which has seen a 750% surge this year, may climb even higher.
If you had invested $5,000 at the start of 2024 in AppLovin stock, you'd be sitting on a nearly $40,000 profit by now. This tech company has displayed remarkable growth in sales this year, with revenue through the first nine months of 2024 reaching $3.3 billion, marking a 43% increase compared to the same period last year. Profits have also skyrocketed, going from $184 million to nearly $981 million during that time frame. The company's success was such that analysts predicted it would be included in the S&P 500. However, when this wasn't the case in September, the stock's value plummeted.
The stock still has potential, especially if its e-commerce business takes flight. The risk, however, stems from its high valuation—trading at more than 120 times trailing earnings—which suggests that anticipated future growth is already factored into the price. Investors contemplating purchasing the stock should exercise caution, as its future returns might be limited.
Summit Therapeutics: $35,960
Summit Therapeutics is another top-performing stock this year, capable of turning a $5,000 investment made at the beginning of January into nearly $36,000 now. The intriguing aspect is that the pharma company has no approved products. Its market cap, however, exceeds $13 billion, showing the faith investors have in the company.
The reason Summit Therapeutics is so highly valued lies in its potential blockbuster drug in the pipeline. A recent clinical trial showed that ivonescimab performed better than Keytruda, a prominent and lucrative drug in healthcare giant Merck's portfolio for several years, generating billions in revenue. The catch is that the trial was conducted in China, and the Food and Drug Administration may require more diverse data before considering approval.
While investing in the stock is arguably not late, it may be premature given the uncertainties still confronting Summit. It's yet to generate any consistent revenue, and it has incurred substantial losses totaling $197 million over the last four quarters. Although there is substantial upside for the stock if the drug gets approved, the risks for investors are also significant.
MicroStrategy: $32,570
MicroStrategy concludes this list of outstanding stocks. A $5,000 investment in this tech stock at the beginning of the year would now be worth more than $32,500. If you had invested $15,000 in all the stocks mentioned above, your investments would now total well over $110,000.
MicroStrategy operates in the tech sector, selling AI-powered business solutions to its customers. However, it's not revenue growth from its primary business or skyrocketing profits that have attracted investors. Instead, its bullish position on cryptocurrencies and Bitcoin is captivating attention. MicroStrategy has been accumulating Bitcoins and plans to raise billions in capital to expand its already sizeable Bitcoin hoard, which now amounts to over 423,000 Bitcoins.
Investing in the company requires courage, as while MicroStrategy has gained from Bitcoin's soaring value this year, Bitcoin's volatility means its price is unpredictable. And like Bitcoin, MicroStrategy's stock value could be influenced by Bitcoin's fluctuations. Unless you're comfortable with this volatility, it might be prudent to steer clear of the stock.
In the realm of finance and investing, many individuals are exploring opportunities beyond traditional stocks. For instance, if one had invested $5,000 in MicroStrategy, a tech company known for its crypto enthusiasm, their investment would now be worth over $32,500, demonstrating the potential rewards of diversifying into cryptocurrency-related ventures.
In light of the current investing landscape, it's worth noting that financial strategies should always consider risk and reward. Aspects like the volatility of Bitcoin can significantly impact MicroStrategy's stock value and might not suit everyone's risk tolerance. Thus, it's essential to conduct thorough research and consult with financial advisors before investing in such ventures.
