After a tough year in the equities space in 2022, the market rebounded quite robustly, warranting a discussion of the best performing stocks of 2023. However, it’s no good to just consider empty statistics. After all, past results are no guarantee of future performance.
So, the real question is, which one of the best-performing stocks of 2023 can still deliver the goods in 2024? No one has a crystal ball and I’m not about to pretend that I have some unique wisdom to share. However, a combination of industry projections and analyst upside ratings provides certain enterprises with a clear edge.
For risk-tolerant speculators, these are the best-performing stocks of 2023 that still have some legs remaining.
DraftKings (DKNG)
What it is: Based in Boston, Massachusetts, DraftKings (NASDAQ:DKNG) is a leading online sports betting and iGaming platform in the U.S. It offers fantasy sports, daily fantasy contests and casino games. Further, it easily qualifies among the best performing stocks of 2023. Since the January opener, DKNG gained over 227% of equity value. Better yet, it might not be done pushing higher.
Relevance: For one thing, DKNG gained more than 3% in the trailing five sessions. So, it’s still showing signs of life. Further, Statista points out that the online sports betting market size in the U.S. will likely hit $7.62 billion by year’s end. Further, experts project that the sector will clock in at a valuation of $15.75 billion by 2028. If so, that would represent a compound annual growth rate (CAGR) of 15.63%.
Pros: Given its leadership position, DKNG should rise with the rest of the market. As support, the company enjoys a massive three-year revenue growth rate of 43.1%. Analysts rate share a strong buy with a $42.05 price target, implying over 16% upside potential.
Cons: As a gambling enterprise, DraftKings is likely extra exposed to the consumer economy, for better or for worse.
Cipher Mining (CIFR)
What it is: You only need to know one name to get excited about Cipher Mining (NASDAQ:CIFR) – Bitcoin (CCC:BTC-USD). I’m biased because I have some exposure to BTC directly. That disclosure aside, the cryptocurrency market has blossomed late this year as the sector recovered from the malaise of 2022. On a fundamental level, then, Cipher’s Bitcoin infrastructure business appears enticing.
Relevance: Again, you only need to know about Bitcoin to drive up sentiment to the moon. That said, in terms of numbers, Precedence Research claims the global crypto mining market size reached a value of $1.92 billion last year. Further, experts project that by 2032, the segment could command a valuation of 12.9%. That would translate to a CAGR of 12.9% from 2023.
Pros: Thanks to the broader enthusiasm, CIFR is one of the best performing stocks of 2023, gaining 303% year-to-date. Even so, analysts rate shares a strong buy with a $5 price target, projecting nearly 94% upside potential.
Cons: While compelling, Cipher’s revenue will likely ebb and flow with the fortunes of the underlying Bitcoin market. Therefore, extra caution is warranted.
Applied Digital (APLD)
What it is: Based in Dallas, Texas, Applied Digital (NASDAQ:APLD) designs, develops, and operates next-generation data centers across North America. Its mission is to provide digital infrastructure solutions to the rapidly growing high-performing computing (HPC) industry. Investors are impressed with the print so far. Since the beginning of January, APLD gained almost 257%. It’s one of the best-performing stocks of 2023.
Relevance: Fundamentally, Applied Digital benefits from exposure to a burgeoning and sizable industry. According to Allied Market Research, the global data center market reached a valuation of $187.35 billion in 2020. Experts project that by 2030, the segment could hit a value of $517.17 billion. That would translate to a CAGR of 10.5% from 2021 to the culmination point.
Pros: Even though APLD has already beaten up rivals in the equities sector, it could still offer considerable gains. That’s according to Wall Street experts, who rate shares a unanimous strong buy. Also, their average price target stands at $15.25, implying over 132% upside potential.
Cons: Trading at a forward earnings multiple of 26.72x – above the sector median of 13.55x – APLD is extremely overheated.
On the date of publication, Josh Enomoto held a LONG position in BTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.