The year 2023 is drawing to a close and it looks like the conditions are forming for a Santa Claus rally, with the Fed holding interest rates steady, bond yields in retreat, and economic data showing that the economy is beginning to slow.
After declining for three consecutive months and falling into a correction, the benchmark S&P 500 index has gained 5% to start the month of November and momentum seems to be building behind stocks. Given that November is traditionally the best month of the year for equities and that a Santa Claus rally occurs more often than not during December, there’s reason to be bullish as we close out the year. With that in mind, there are a number of stocks that are rallying right now and would make excellent additions to a portfolio.
Here are three stocks that will make great holiday gifts this year.
Riot Blockchain (RIOT)
You might be aware that Bitcoin (BTC-USD) has enjoyed a big run this year. Less known is that cryptocurrency miners have been one of the best performing groups of stocks in 2023. Crypto miners such as Marathon Digital (NASDAQ:MARA), Riot Platforms (NASDAQ:RIOT), and CleanSpark (NASDAQ:CLSK) have each seen their stocks rise more than 25% in the last month and all are up more than 100% for far this year.
Among the pack, RIOT stock is the standout, having gained 238% since January and outpacing the performance of AI chipmaker Nvidia (NASDAQ:NVDA)
The bull run in cryptocurrency miners comes as Bitcoin’s price hovers near $35,000, a 17-month high. Some analysts are forecasting that Bitcoin’s price could reach $50,000 within the next six months, a development that would further help RIOT stock. Analysts are now recommending that investors take positions in crypto mining stocks as they are well-positioned to benefit from the continued rally in BTC. Bitcoin has been gathering steam in recent weeks on hopes that the U.S. Securities and Exchange Commission (SEC) will soon approve a spot Bitcoin exchange-traded fund (ETF).
And it isn’t just BTC whose price is marching higher. The price of Ethereum (ETH-USD), the second-largest cryptocurrency by market capitalization, has seen its price rise 10% since the start of October to right around $1,800.
DraftKings (DKNG)
A momentous event just occurred for sports betting company DraftKings (NASDAQ:DKNG). The Boston-based online gambling company has overtaken rival sportsbook FanDuel for the first time to become the leader in the U.S. online gambling market with a 31% share. DraftKings achieved the top position during this year’s third quarter as it expanded into new markets, notably Kentucky. The company is now planning to also enter Maine and North Carolina, pending regulatory approval. Currently, the company has a presence in 22 U.S. states and neighboring Canada.
The steady expansion led DraftKings to report a 57% year-over-year increase in its Q3 revenue as its customer base continues to swell. DraftKings now has 2.3 million monthly unique payers, a 40% year-over-year increase. Average revenue per monthly unique payer increased 14% year-over-year in Q3 to $114. Overall, the company’s Q3 results beat expectations across the board. And DraftKings raised its forward guidance, saying it now expects revenue for all of this year in a range of $3.67 billion to $3.72 billion, up from a previous range of $3.46 billion to $3.54 billion.
DKNG stock rose 16% immediately after its Q3 results were made public. The company’s share price has now increased 205% on the year.
Block (SQ)
Shares of financial technology company Block (NYSE:SQ) jumped 10% higher after its Q3 print beat Wall Street forecasts on the top and bottom lines, and the company led by Jack Dorsey demonstrated strong growth in its Cash App and Square revenue. Block announced earnings per share (EPS) of 55 cents versus 47 cents that had been expected among analysts. Revenue totaled $5.62 billion compared to $5.44 billion that was anticipated. Block also raised its forward guidance, saying it now expects full-year operating income of $205 million to $225 million, a huge increase from previous guidance of just $25 million.
Like the aforementioned cryptocurrency miners, Block, which is a major holder of digital coins and tokens, is benefitting from the rally in Bitcoin. The company said that its Bitcoin revenue in Q3 rose 38% to $2.42 billion from $1.76 billion a year earlier. Owing to the lift it’s getting from BTC, Block executives said that they now expect a 2023 gross profit of $7.44 billion to $7.46 billion, which is above the previous outlook. Dorsey said that the company will continue to focus on growing its popular payment app among restaurants and services businesses throughout America.
While SQ stock is down 25% on the year, the share price has gained 16% over the last month and looks to have bottomed at a 52-week low in October. Buy now as this stock has momentum behind it.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
