3 Speculative Stocks That Could Make You a Fortune (if You Dare)
Speculation is rife in the market right now and there are plenty of risky stocks for investors to gamble on in an attempt to make a fortune. This is especially true as the market for initial public offerings (IPOs) has returned after two difficult years for new stock issuance. According to data from EY, the global IPO market ended 2023 with 1,298 listings that, combined, raised $123.20 billion. That was down 47% from the record number of IPOs held in 2021 when global markets last peaked.
However, since September 2023, we have seen several high-profile IPOs from companies ranging from German sandal maker Birkenstock (NYSE:BIRK) to semiconductor concern Astera Labs (NASDAQ:ALAB). Newly listed companies are, by their nature, speculative investments. Beyond the return of IPOs, there are several established stocks that remain volatile and hard to predict, from cryptocurrency miners such as Riot Platforms (NASDAQ:RIOT) to electric vehicle maker Tesla (NASDAQ:TSLA).
Here are three speculative stocks that could make you a fortune (if you dare).
Rubrik (RBRK)
It just went public and it’s hard to know where the stock is headed, but investors with an appetite for risk might want to consider data software company Rubrik (NYSE:RBRK). The company’s share price rose 16% during its first day of trading on the New York Stock Exchange following a successful initial public offering (IPO) on April 25. Since then, RBRK stock has fallen 6%. Investors might want to buy the dip in the company, which has the backing of tech giant Microsoft (NASDAQ:MSFT), among others.
Rubrik sold 23.5 million shares at a valuation of $5.60 billion. The data management software maker raised $752 million from the IPO. Like most start-ups that go public, Rubrik is unprofitable.
Founded in 2014, the company reported a net loss of $354 million in its latest fiscal year, compared with a $278 million loss the previous year. The company generates 91% of its revenue from subscription fees. Microsoft has been an investor in Rubrik since it was still privately held in 2021.
Super Micro Computer (SMCI)
Super Micro Computer’s (NASDAQ:SMCI) stock continues to lead the benchmark S&P 500 index, having tripled its share price year to date. SMCI stock is up 209% since January, although it has pulled back 15% during the month of April, opening up a potential buying opportunity for investors with nerves of steal. Super Micro Computer’s stock has been on a blistering rally, increasing 740% in the last 12 months alone. The company has grown so quickly that it was recently added to the S&P 500 for the first time.
The previous small cap company makes data centers that power artificial intelligence (AI). Super Micro’s market capitalization has soared from $4.50 billion at the end of 2022 to more than $50 billion today.
SMCI stock really took off a year ago after the company announced a partnership with leading microchip designer Nvidia (NASDAQ:NVDA). While the rapid gains are impressive, this stock comes with risks. Super Micro Computer is one of the most shorted stocks, with traders betting the share price will decline.
Reddit (RDDT)
Social media company Reddit (NYSE:RDDT) held its IPO in late March, and while the share offering was oversubscribed and viewed as a success, the company’s shares have since pulled back about 6% after initially jumping in their market debut. Reddit, which runs online message boards and discussion forums, was one of the most high-profile IPOs of the past few years and the first social media company to go public since Pinterest (NYSE:PINS) in 2019.
Like Rubrik, Reddit is unprofitable. While Reddit’s revenue grew 20% in 2023 to $804 million, the company posted a net loss last year of $90.8 million. Analysts have initiated coverage of RDDT stock with a consensus rating of “moderate buy.”
The average price target on the stock is is $49.20, which is about 4% higher than current levels. Achieving profitability and demonstrating continued growth will be key for Reddit when it issues its first earnings print as a public company on May 7.
On the date of publication, Joel Baglole held long positions in MSFT and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
