If You're Growing Weary of S&P 500 Updates, Check Out These Four Top-Performing Stocks from the Russell 2000 This Year
Let me clarify first, I'm an AI language model and I don't have real-time access to markets or financial data, so I can't provide accurate market performance information. However, I can certainly paraphrase the text you provided, focusing on the investment opportunities in the Russell 2000 index.
Don't get me wrong, I've got a soft spot for the Big Board. It's a meticulously crafted stock market index made up of around 500 of the most substantial, money-making U.S. corporations. But let's not forget, the Big Board is merely a small slice of the vast financial pie. There are numerous other potential investment opportunities hidden in the stock market's depths.
With that said, there are about 2,000 companies listed on the Russell 2000. This index features smaller stocks, valued at $10 billion or less (apart from a few notable exceptions that exceed this value). Now, why limit ourselves to the Big Board when the Russell 2000 offers a plenty of promising prospects?
Just like in the Big Board, the Russell 2000 delivers its share of winners. I've picked out four stocks that dazzled investors in 2024, even if they didn't top the overall list. These are Sezzle (with a return of 1,460%), Rigetti Computing (with a return of 649%), SoundHound AI (with a return of 539%), and The RealReal (with a return of 364%).
1. Sezzle: up an astonishing 1,460%
Sezzle is a financial tech expert focused on helping younger consumers who don't have traditional credit cards. This stock saw a remarkable increase in 2024, thanks to exceptional growth over the years and a significant leap in profitability.
Consider that in 2022, Sezzle generated $126 million in revenue, but it posted a loss of $38 million. Revenue climbed by 7% in 2023, turning the loss into a profit of $7 million. Now, the company expects to boost revenues by 55% in 2024, creating a net income of proximately $72 million.
Most of Sezzle's income comes from transaction processing fees charged to merchants. Increasing the number of merchants accepting Sezzle payments is therefore crucial to its growth. New merchants frequently join the Sezzle family, and subscribers to its services make up the current growth.
By the end of 2023, there were roughly 307,000 active subscribers. However, the count jumped to 529,000 by the third quarter of 2024. Investors should watch subscriber numbers closely in 2025, as this could result in further financial improvement.
2. Rigetti: up 649%
The idea of harnessing quantum computing to create exponentially powerful computers has been simmering since the birth of the digital age. Rigetti Computing is one company aiming to lead this revolution.
Rigetti stock experienced a remarkable surge in 2024, but most of the gains can be attributed to recent events. Quantum computing is currently in the research and development stages, primarily with government funding. However, in its third-quarter report for 2024, Rigetti made an exciting announcement about its product roadmap and saw its shares soar.
For binary systems, the difference between one bit and two bits is 100%. In the realm of quantum systems, the distinction between qubits is much more pronounced due to the vast range of states they represent. Rigetti is planning to release a new 36-qubit system by mid-2025 and a new 100-qubit system by the end of the year. These milestones mark significant advances in computational power.
While quantum computers have yet to reach mainstream commercial use, investors ought to monitor Rigetti's release deadlines and gain more users in 2025. Progress in these areas will pose a substantial impact on the company's long-term viability.
3. SoundHound AI: up 539%
SoundHound is making waves in the field of AI, using its technology to develop conversational voice assistants. This niche has only recently gained traction in sites such as drive-thrus and inside vehicles, though few have paid it much heed until recently. A rallying cry for SoundHound stock was triggered in February, when market heavyweight Nvidia disclosed its shareholding, sparking the stock's ascent in 2024.
After generating $46 million in revenue in 2023, SoundHound's management aims to reach $150 million in revenue in 2025. Rapid revenue growth like this is the foundation of our investment strategy. SoundHound estimates its market opportunity to be an eye-opening $140 billion.
In essence, if SoundHound's technology truly shines, it should continue to drive rapid revenue growth for years to come. This will be essential to maintaining its investment appeal. Shareholders should therefore keep a close eye on SoundHound’s key customer wins in 2025, as well as how the newly acquired businesses are integrated into the company.
TheRealReal is an online marketplace for certified, second-hand luxury goods, similar to how Rigetti's stock value has lately experienced an unprecedented rise. The company released its financial earnings report for the third quarter of 2024 on November 4th, which has prompted analysts and investors to reassess their views on the company.
TheRealReal acts as an intermediary for consignors to sell items or even purchases products to resell themselves. The company also generates revenue through other means, such as giving premium subscribers early access to upcoming merchandise. Nevertheless, the adoption rate and profit expectations had been decreasing significantly, leading to a significant loss of investor confidence.
However, recent developments have shown that TheRealReal is back on track, with a 11% increase in Q3 revenue compared to the previous year. Moreover, there was a slight improvement in active buyers and the company also reported a Q3 free cash flow of $2 million for the first time.
In summary, the surge in revenue and positive cash flow has prompted investors to reevaluate their long-term outlook for TheRealReal. It is worth keeping an eye on whether the adoption trends continue in a positive direction in 2025.
Is there an investment opportunity for investors today?
In my opinion, Rigetti and SoundHound are the most speculative stocks here. Both have significant potential, but they both require sustained growth to achieve their full potential. On the other hand, TheRealReal has a somewhat undervalued price at the moment, which could help limit potential losses. Having said that, I am unsure about the size and sustainability of its core business.
Given the options, I would invest in Sezzle. The adoption trend for their subscription model is impressive, while its new and relatively small market capitalization of below $2 billion, provides a strong foundation for growth. With profits currently surging, it may still prove to be a worthwhile opportunity for investors in the long term.
- If you're interested in the finance and investing sphere, you might want to consider Sezzle, a financial tech company that saw a staggering 1,460% increase in 2024.
- In the realm of investing in technology, Rigetti Computing, a quantum computing company, experienced a 649% surge in value last year, presenting a potential opportunity for those who believe in the future of this technology.
