For any year, the basic target of an investor is to beat inflation and to outperform the index. Beyond this, the returns are a bonus. Of course, for aggressive investors with a high percentage of growth stocks, the target is likely to be steeper. Irrespective of individual targets, all investors would like to begin the New Year on a high. Without going overboard in terms of risk taking, there are some speculative stocks to buy to start 2024 with a bang.
It goes without saying that exposure to speculative stocks should be limited to less than 10% of the total portfolio. However, if a few ideas fire and deliver 50% to 100% returns, the overall impact is likely to be meaningful even with 10% portfolio exposure.
Let’s discuss the triggers for these speculative stocks to buy for quick returns in the new year.
Marathon Digital (MARA)
The cryptocurrency world is full of speculation and risk. A good proxy is to invest in crypto stocks and with Bitcoin (BTC-USD) surging higher, there is a strong case for a rally in attractive stocks. Marathon Digital (NASDAQ:MARA) stock is higher by 330% year-to-date (YTD). However, the stock seems attractively valued and I would bet on an easy 50% rally in Q1 2024.
It’s worth noting that MARA stock has a short interest that’s currently at 24% of the free-float. A massive short-squeeze rally seems likely if Bitcoin remains in an uptrend in the coming months.
An important point fundamentally is that Marathon has undertaken a massive expansion plan. As of November 2022, the Company’s hash rate capacity was 7EH/s. Capacity has swelled by 231% year-over-year (YOY) to 23.2EH/s. The Company is planning further growth in capacity next year. This is likely to translate into healthy revenue and cash flow upside. I also believe that the negative impact of Bitcoin halving is discounted in the stock.
Archer Aviation (ACHR)
It’s been a good year for most flying car stocks and Archer Aviation (NYSE:ACHR) stock has surged by 244% YTD. However, it’s worth noting that ACHR stock is trading at the same levels as it was in July. It’s clearly an indication of consolidation before the next rally. I must add that short interest in the stock is at 21% and ACHR stock is another potential short-squeeze rally candidate.
Let’s talk about the business and I have two important points to mention. First, Archer is on track for eVTOL commercialization in 2025 and with a liquidity buffer of $600 million, I expect progress to remain smooth.
Further, the Company is spreading wings in terms of geographical expansion. Archer plans to launch air taxi services in India and UAE in 2026. I must add that the backlog is swelling with latest orders from Air Chateau International that’s worth $500 million. Given these positives, I expect the stock to surge higher relatively soon.
Robinhood (HOOD)
Robinhood (NASDAQ:HOOD) stock has been a story of euphoric listing followed by a big crash. However, it finally seems that HOOD stock is poised for a strong reversal rally from deeply oversold levels. As a matter of fact, the stock has trended higher by 38% in the last month.
An important point to note is that Robinhood depends on an increase in trading and speculative activity for growth. With Bitcoin trending higher, it’s likely that cryptocurrency trading will translate into revenue upside for the Company. Further, with the likelihood of multiple rate cuts next year, the outlook is positive for equities.
International expansion is another reason to be positive on Robinhood. After expansion into the U.K., the Company will be launching its trading app in the European Union. It’s therefore likely that active users will increase in the coming quarters. This will also support revenue growth.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
