Top 5 Rising Stocks in the US Market: AI and Cryptocurrency Related Stocks

AppLovin, an online gaming and advertising company, sees a 758% stock surge

MicroStrategy's stock continues to soar for the second year

Palantir and NVIDIA rise for the second year as AI beneficiaries

This year, the biggest winners in the US stock market were stocks related to artificial intelligence (AI) and cryptocurrency.

While AI's impact on everyday life remains uncertain for general consumers, it has become a crucial factor for companies when making investment decisions. Stock prices fluctuated based on AI-related business strategies.

Cryptocurrency also played a key role in stock price increases. The launch of a spot Bitcoin investment ETF in January boosted Bitcoin's credibility, leading to a rally in related stocks after Trump, who once called Bitcoin a 'scam', became more favorable towards it and was elected president.

Among companies with a market capitalization exceeding $5 billion, the top five most profitable US tech stocks this year were AppLovin, MicroStrategy, Palantir, Robinhood, and NVIDIA.

-AppLovin (APP)

AppLovin, which started the year with a market cap of approximately $13 billion, saw its stock price surge by 758% by Tuesday's close. It was the biggest gainer among all tech companies with a market cap over $5 billion. As of Tuesday, its market cap surpassed $110 billion, making it more valuable than Intel or Starbucks.

The company provides marketing services for app developers and produces online games like 'Woody Block Puzzle' and 'Bingo Story'. Currently, AI features integrated into online advertising are generating significant revenue.

Last year, the company released an updated version of the ad search engine Axon, which is known to help with more targeted advertising in game apps and is used by various studios. Third-quarter software platform revenue increased by 66% to $835 million, and quarterly net income surged by 300%, raising the company's profit margin from 12.6% a year ago to 36.3%.

Adam Foroughi, the company's founder and CEO, who immigrated to the US from Iran as a child, has seen his net worth surpass $10 billion, according to Forbes' billionaire rankings.

-MicroStrategy (MSTR)

MicroStrategy, a company that no longer garners interest in its core business but rather in how much Bitcoin it has purchased, saw its stock price soar by 346% last year and 467% this year. Founder Michael Saylor, who established the company as a software firm during the dot-com bubble, has emerged as a cult hero in the cryptocurrency world.

Since announcing its Bitcoin purchase plan in mid-2020, the company has been selling stock when prices rise and increasing debt to continue buying Bitcoin. It currently holds 444,000 Bitcoins.

It is the fourth-largest holder of Bitcoin globally, following Satoshi Nakamoto, BlackRock's iShares Bitcoin Trust, and the cryptocurrency exchange Binance.

The company's market cap, which was about $1.1 billion when it was a software company, has grown to $80 billion today.

In an interview with CNBC shortly after the US presidential election, Saylor stated, "If a digital asset framework is introduced to the entire cryptocurrency market, there will be a surge across the entire industry."

-Palantir (PLTR)

Palantir, which primarily sells data analysis tools to the US Department of Defense, saw its stock price soar by 380% this year, driven by AI demand.

During its third-quarter earnings announcement, the company raised its overall guidance, including revenue for the year. CEO Alex Karp emphasized that this strong performance is supported by unwavering AI demand from both the US government and commercial clients.

The stock rose by 23% following the earnings report and an additional 8.6% the day after Trump's victory. Palantir's co-founder and board member Peter Thiel supported Trump in the 2016 campaign, and Karp attended meetings with Trump and tech industry leaders.

However, Karp publicly supported Democratic candidate Kamala Harris in this year's presidential election.

Despite this, Wall Street continued to support Palantir after the US election, optimistic that increased defense spending would flow into the company.

Analysts expect revenue to grow by about 24% next year, reaching $3.5 billion.

-Robinhood (HOOD)

Robinhood, which operates an online trading platform, saw its stock price temporarily drop by 17% following a poor earnings announcement at the end of October but has tripled over the year.

This was due to expectations of increased cryptocurrency trading. One of the company's biggest growth engines is cryptocurrency, which retail investors can easily purchase on the app like stocks.

Third-quarter cryptocurrency trading revenue surged by 165% year-over-year to $61 million, accounting for 10% of total net revenue.

In addition to Bitcoin, investors can purchase about 20 alternative coins, including Ethereum, Dogecoin, Shiba Inu, and Bonk.

According to LSEG, analysts expect Robinhood to achieve revenue of $805 million in the fourth quarter, growing by over 70%. This would mark the company's largest quarterly growth since its IPO in 2021.

Robinhood is significantly outpacing Coinbase, which has risen by 61% this year. However, Coinbase, with a market cap of $70 billion, remains twice as valuable as Robinhood.

-NVIDIA (NVDA)

NVIDIA, which saw its stock price soar by 239% last year, rose by another 183% this year, adding $2.2 trillion to its market cap. As of the 24th, its market cap stands at $3.4 trillion.

This year, it twice surpassed Apple to claim the title of the world's most valuable company.

NVIDIA is the biggest beneficiary of the AI boom. Large cloud providers and internet companies are flocking to purchase graphics processing units (GPUs), leading to a supply shortage. Revenue has increased by at least 94% in each of the past six quarters, with growth rates exceeding 200% three times during that period.

CEO Jensen Huang recently announced in an earnings report that the next-generation chip Blackwell is in production. CFO Colette Kress stated that Blackwell has been delivered to major customers and is expected to generate billions of dollars in revenue in the fourth quarter.

However, as a mega tech company, NVIDIA is expected to face inevitable growth slowdowns. Analysts anticipate a deceleration in growth rates over the next few quarters, with growth expected to fall to the mid-40% range in the second half of next year. Additionally, the company's reliance on massive sales from a few large tech firms poses significant risks of economic fluctuations.

Guest Reporter Jung-A Kim kja@hankyung.com