With a bull market barely showing signs of slowing down, one of the best outperforming stocks this year is Super Micro Computer (NASDAQ:SMCI). The premier provider of AI-optimized computers, servers, networks, storage solutions and data center workstations is up 176% year-to-date. That follows its shares more than tripling in value in 2023.
While artificial intelligence has been behind the gains made in the semiconductor industry, most notably Nvidia (NASDAQ:NVDA), which is up 148% so far this year (it rose 239% last year too), many stocks have done even better.
Importantly, it wasn’t AI pushing them along either. There are other great investing themes out there that you would have missed if you only focused on the headline names.
Below are three outperforming stocks that are beating Super Micro Computer in 2024. While they have been star performers in the front half of the year, do they have what it takes to enjoy similar gains in the back half and beyond? Let’s dig in and find out!
Biotech stock Avidity Biosciences (NASDAQ:RNA) has risen over 400% this year. But it wasn’t a sudden spike that caused it to be one of the top outperforming stocks on the market. Rather, the biotech stock is on a long, steady climb higher. From its low point last October, RNA stock is up 844%. Yowser! But why?
Avidity Biosciences is taking an innovative approach to delivering a new class of RNA therapeutics called antibody-oligonucleotide conjugates, or AOCs. According to the biotech, its proprietary platform combines “the specificity of monoclonal antibodies, or mAbs, with the precision of RNA therapeutics to target the root cause of diseases previously untreatable with RNA therapeutics.”
Yet Avidity is a clinical-stage biotech. It doesn’t have any drugs on the market. It does generate some revenue due to collaborations and partnerships to study how its AOC platform can target specific indications, and they totaled $3.5 million in the first quarter.
Avidity’s lead candidate is del-desiran (AOC 1001), a therapy for myotonic dystrophy type 1 (DM1), a form of muscular dystrophy. It plans to initiate Phase 3 trials, and in May the Food & Drug Administration granted AOC 1001 breakthrough therapy designation. That declaration expedites the development and review of drugs submitted.
Biotechs are a risky field to invest in, but Avidity Biosciences seems to be on the right path for additional growth. The path to approval, though, is still a long one.
Africa is a huge, untapped market, and Jumia Technologies (NASDAQ:JMIA) is looking to, well, tap into it. The startup e-commerce platform is seeking to become the Amazon (NASDAQ:AMZN) of Africa and one of the outperforming stocks.
It generates revenue primarily through commissions from third-party sellers on the pan-African marketplace. Sales soared 19% in the first quarter but were up 57% on a currency-neutral basis. Perhaps most importantly, it is finally on the path to profitability. It hasn’t gotten there yet, but first-quarter losses narrowed significantly, down to $8 million from $28 million a year ago.
Although analysts don’t foresee it operating in the black for some time yet, it may have shortened the window considerably.
Jumia stock is up 291% this year but more than 360% over the past six months. The problem for the e-commerce stock is the political instability of the continent. It also notes it faces significant currency devaluations in some of its largest markets. However, it is seeing stability return in some markets and both Nigeria and Ghana are enjoying order growth.
Becoming the next Amazon won’t be an easy path, but as Africa modernizes, Jumia could become a long-term outperforming stock. If you invest, however, expect significant volatility in the share price.
The investment thesis behind Microstrategy (NASDAQ:MSTR) these days has less to do with with its AI-driven enterprise analytics software and more to do with Bitcoin (BTC-USD). The stock follows the broad strokes of the cryptocurrency’s price movements, though it doesn’t walk lockstep with them.
Where Bitcoin’s price is up 56% year-to-date, Microstrategy is sitting 173% higher than where it started the year.
That is because the company views buying the crypto as equally as important as selling its analytics software. Indeed, read a Microstrategy earnings release and you will see more about Bitcoin than you do about software sales.
To that point, Microstrategy bought 25,250 Bitcoin in the first quarter and held 214,400 BTC at the end of the period. The total cost of the crypto was $7.5 billion, or $35,180 per bitcoin at the time of the release. However, the company updated its holdings on June 20 to say it now held 226,331 Bitcoin, meaning it added almost 12,000 more to its portfolio. Bitcoin currently trades north of $65,900.
To buy all that crypto, Microstrategy has taken on boatloads of debt. Long-term debt now stands at over $3.5 billion, a 63% increase just from the end of last year. If Bitcoin goes into a steep decline again, Microstrategy could be seriously impaired. The cryptocurrency may be an exciting investment on its own, but there are better ways to acquire it than betting on the one-time analytics software developer.
On the date of publication, Rich Duprey did not hold (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.