The year 2024 was one for the mega caps as Big Tech benefited from a boom in artificial intelligence. But initial public offerings left a strong mark as four new issues were some of the year's best winners, with Reddit stock outpacing the best performer in the S&P 500.
Along with Reddit, the best IPO stocks for 2024 were Astera Labs, Loar and Rubrik.
Reddit offers a popular social media platform while Astera Labs makes connectivity chips used in data centers. Rubrik is a cybersecurity software provider with a partnership with Amazon for generative AI applications. Rubrik and Astera Labs also gained amid the boom in AI.
Finally, Loar is an aerospace and defense stock. The company makes aerospace systems and parts.
Reddit Stock Gains 380%
Social media stock Reddit's achievement was staggering. Shares started trading at $34 in March and gained 380% in 2024. That exceeds the best performing S&P 500 stock of 2024, Palantir, which rose 340%. Also, Reddit hit an all-time high Monday.
The social media platform and its massive tracts of data have attracted artificial intelligence behemoths like Google-parent Alphabet. Google is looking for data to train its large language models and to improve its search function.
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But IPOs can be tricky since investors cannot go by past performance or chart indicators such as moving averages until the stock has been trading for a few weeks at least. Stocks also need the time to carve bases that can offer proper buy points.
Still, if investors had scooped up shares of Reddit as they broke out of their first base in October at a buy point of 78.08, they would have netted a gain of more than 100%.
Astera Labs: High-Powered Partners
Astera Labs was the second best performing stock among the four new issues, gaining more than 240% after going public in March. The chipmaker boasts a partnership with Alphabet and runs its high performance computing workloads on Amazon Web Services.
Amazon also has a stake in the chip designer and has warrants to buy 2.3 million shares of Astera stock. Shares also hit an all-time high on Monday and are extended.
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Rubrik has more than doubled since its IPO in April when shares started trading at $32. Shares are working on a flat base with a buy point of 75.79 which is its all-time high.
Loar has risen more than 150% since shares listed on the New York Stock Exchange in April. The stock fell below its 50-day moving average in December and has to retake that level before it can offer a buy point.
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