It has been a good year for stocks, with the S&P 500 up about 20% so far in 2024. A combination of muted inflation, strong consumer and business sentiment, and shrewd maneuvers by the U.S. Federal Reserve have all been factors in this rally.
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In such a “risk-on” environment for stocks, it shouldn’t be surprising that a handful of more aggressive investments have put up even better results. The following seven stocks all have recorded big returns this year and are riding amazing momentum as we charge into 2025.
To be clear, these returns may not last. The success of each of these high-risk stocks depends on a very specific business opportunity that has paid off in 2024 but may not pay off next year. That means investors should stay up-to-date on the latest news and do their own research before piling in, as past performance is never an indicator of future returns.
With those disclaimers out of the way, seven high-risk but potentially high-reward stocks to watch right now include:
| Stock | Market Value | Sector | Year-to-date gain* |
| AppLovin Corp. (ticker: APP) | $47 billion | Technology | 251.2% |
| Carvana Inc. (CVNA) | $21 billion | Consumer discretionary | 239.5% |
| CAVA Group Inc. (CAVA) | $15 billion | Consumer discretionary | 193.2% |
| FTAI Aviation Ltd. (FTAI) | $14.5 billion | Industrials | 204.0% |
| MicroStrategy Inc. (MSTR) | $38 billion | Technology | 194.6% |
| Summit Therapeutics Inc. (SMMT) | $14 billion | Health care | 624.9% |
| Vistra Corp. (VST) | $45 billion | Utilities | 243.6% |
*As of Oct. 7 closing price.
AppLovin Corp. (APP)
Market value: $47 billion Sector: Technology YTD Return: 251.2%
California-based AppLovin is a software-based marketing platform that matches advertisers content to serve up ad impressions on everything from streaming video to mobile games. Its budding business on smart TVs, serving up targeted ads in the commercial breaks now inserted into a host of shows as viewers hope to cut down their monthly streaming bills, is particularly promising. The company isn’t just some startup with aims of competing with the big dogs like advertising titan Alphabet Inc. (GOOG, GOOGL), either. It has significant scale already with $5.1 billion in revenue projected next fiscal year.
It also has significant profits, with fiscal year 2024 earnings set to jump fourfold and then grow another 30% next year on top of that. There’s not exactly a wide moat here and advertising can be very cyclical, but APP seems to be running strong right now based on brisk ad spending over 2024.
Carvana Inc. (CVNA)
Market value: $21 billion Sector: Consumer discretionary YTD Return: 239.5%
Carvana is an online vehicle merchant looking to disrupt the dealership model altogether with digital tools. Some of the ways it’s helping rethink the way Americans buy and sell cars are through online purchases and appraisals, quirky “vending machines” in urban centers that dispense vehicles, and door-to-door delivery. It hasn’t been an easy road, as some thought CVNA would burn through all its startup cash altogether and be forced into bankruptcy a few years back. But the company aggressively restructured its debt and operations, and investors have returned in droves with optimism after recent cost-cutting and operational changes. The stock is still losing money and the competition from other digital startups as well as traditional dealers is fierce. And besides, one big dip in consumer confidence could gut car sales regardless of the merchant. That said, CVNA’s strong share performance and operational improvements make it a high-risk but high-reward stock worth a look.
CAVA Group Inc. (CAVA)
Market value: $15 billion Sector: Consumer discretionary YTD Return: 193.2%
CAVA owns and operates a chain of Mediterranean restaurants under its namesake brand, with more than 300 total stores across the U.S. The company is also increasingly offering its dips, spreads and dressings through grocery stores to supplement its revenue. Well-known across the mid-Atlantic region after it was founded in Washington, D.C., back in 2006, the CAVA brand is branching out in a big way. The company is projecting roughly 30% revenue growth this year and more than 20% additional growth in fiscal year 2025. The company is comfortably profitable, with earnings per share set to nearly double from 21 cents to 41 cents this year. Consumer discretionary stocks are always cyclical and carry risk, but that’s particularly true with restaurants that can wax and wane based on the tastes of diners. CAVA is certainly in favor right now, however, with shares up nearly triple from where they started the year.
FTAI Aviation Ltd. (FTAI)
Market value: $14.5 billion Sector: Industrials YTD Return: 204.0%
FTAI owns aircraft and aircraft engines, which it leases and sells to customers. Strange as it may seem, the firm only owns about 100 full commercial aircraft but about 270 engines. Why rent an engine instead of directly owning a wholly functional plane? Well, it comes down to cost savings for the end-user. At least upfront, since the regular lease payments add up fast — and besides, FTAI also offers repair services to make a few extra bucks off those engines along the way. It’s a highly specialized business that is dependent on consumer and business sentiment, but one that has definitely paid off in a strong spending and travel environment. One warning, however: FTAI is not to be confused with the stock FTAI Infrastructure Inc. (FIP), a sister firm that was split off in 2022.
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MicroStrategy Inc. (MSTR)
Market value: $38 billion Sector: Technology YTD Return: 194.6%
MicroStrategy’s core operations include providing business intelligence, mobile software and cloud-based enterprise technology services. However, it has become popular these days thanks to a heavy reliance on digital assets to boost its corporate balance sheet. Back in 2020, then-CEO Michael Saylor announced his intention to stop holding cash and instead rely on crypto to fund its corporate treasury — beginning with buying what was then $250 million worth of Bitcoin.
Considering Bitcoin continues to surge, up about 125% so far in 2024 alone, investors who want to play stocks as a proxy for direct Bitcoin investment have regularly taken stakes in MSTR. Of course, there’s nothing more direct than simply buying Bitcoin or other digital assets instead of a for-profit corporation like this. Furthermore, if the crypto market rolls over then MicroStrategy will tumble, too. The performance is definitely there for this stock, however, as its returns have outpaced even the impressive gains of Bitcoin so far this year.
Summit Therapeutics Inc. (SMMT)
Market value: $14 billion Sector: Health care YTD Return: 624.9%
Whenever a stock sees shares soar despite having deep operating losses, it’s a sign that it’s a pretty volatile investment. But when that stock soars when it also has next to no top-line revenue, it’s even more proof of how high-risk the stock is. That’s the story with Summit Therapeutics, a development-stage drugmaker with a product called ivonescimab that is generating favorable results in a late-stage trial in China. The goal is to develop a drug that could treat various cancers, similar to rival Merck & Co. Inc. (MRK) treatment Keytruda that raked in over $25 billion in sales last year. A lot can go wrong between now and formal drug approval and the onset of sales, but given the current valuation and returns, there’s also reason to be optimistic about this high-risk stock.
Vistra Corp. (VST)
Market value: $45 billion Sector: Utilities YTD Return: 243.6%
A quick review of Vistra may make investors wonder if the stock is mistakenly included on this list of high-risk stocks with high potential for profits. But dig deeper and you’ll find that this utility stock just signed a very lucrative deal with tech leader Microsoft Corp. (MSFT) to power its data centers — hinting at future deals with other cloud services providers, and creating an instant step-change in the scale of its power business. As proof, consider it surged almost 40% in the month of September alone and is at the top of the list for best-performing stocks in the entire S&P 500 this year. It remains an open question whether more deals will materialize, and it’s worth wondering if Wall Street’s enthusiasm will last. But you can’t argue with the share appreciation so far in 2024.
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7 High-Risk, High-Reward Stocks to Buy originally appeared on usnews.com
Update 10/08/24: This story was published at an earlier date and has been updated with new information.
