The year 2024 witnessed an extraordinary rally in the U.S. stock market, with the NASDAQ-100 showcasing stellar performances across various sectors. The U.S. stock market concluded the year with remarkable growth, as the NASDAQ surged by an impressive 34%, reflecting the strong performance of the tech sector. The S&P 500 rose 28%, driven by robust corporate earnings and economic expansion, while the Dow Jones Industrial Average gained 16%, marking consecutive years of strong performance.
Among the 101 names in the NASDAQ-100, the following ten stocks stood out as the top performers:
AppLovin: Undervalued Medium Growth Beats Overvalued High Growth
AppLovin Corp emerged as the top-performing stock of the NASDAQ-100, delivering an astonishing 714.2% YTD price return. This remarkable growth outpaced even tech giant NVIDIA, which reported an impressive 171.1% return.
Dr. Vikas Gupta, CEO & Chief Investment Strategist of OmniScience Capital, highlighted the significance of AppLovin’s performance: “The standout performance of AppLovin Corp firmly positions it as a leader among mid-cap tech companies, particularly in high-growth areas like app monetization and mobile advertising. At OmniScience Capital, we identified AppLovin’s potential early, reinforcing the value of the scientific investing framework. This performance underscores the need for investors to look beyond market giants and focus on companies driving the next wave of innovation, and severely mispriced, to maximize portfolio returns. Of course, one should have the discipline to sell these lesser known stocks once they have become known and have achieved their full value.”
The exceptional performance of AppLovin reaffirms the investment principle that undervalued medium-growth companies, when strategically positioned in disruptive markets, can outperform overvalued high-growth giants. This trend showcases the untapped potential of this investment principle to generate alpha in contrast to chasing high growth stocks.
Market Outlook for 2025
Looking ahead, several factors are expected to shape the trajectory of the stock market in 2025:
Federal Reserve Policy: Interest rate decisions will play a pivotal role. Recent rate cuts have supported growth, but future policies will depend on economic indicators like inflation and employment rates.
Economic Growth: Sustained consumer spending and business investments could continue to drive growth. However, signs of economic slowdown may pose challenges.
Corporate Earnings: Strong earnings have been a key driver of stock market gains. Maintaining this momentum will be critical for investor confidence.
Geopolitical Developments: Global trade policies and geopolitical tensions could influence market stability. President Trump’s proposed tariffs, in particular, may impact inflation and economic dynamics.
Lessons for Investors
The standout performance of companies like AppLovin highlights the importance of identifying disruptive growth stories early. While market giants like NVIDIA and Tesla continue to deliver impressive returns, mid-cap innovators have demonstrated their potential to achieve exponential growth.
As 2025 unfolds, investors are advised to:
• Diversify portfolios to mitigate risks.
• Stay informed about economic and geopolitical developments.
• Adopt a long-term perspective while navigating uncertainties.