3 High-Growth Tech Stocks That Could Outperform Cryptocurrencies

While cryptocurrencies experienced a surge in the past year due to lower interest rates and renewed investor optimism, they remain volatile and difficult to value. For those seeking high-growth investments tied to more sustainable businesses, these three tech stocks—Reddit (NYSE: RDDT), Rocket Lab USA (NASDAQ: RKLB), and Innodata (NASDAQ: INOD)—offer compelling alternatives with promising long-term potential.

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1. Reddit: A Social Media Platform with Rapid Growth

Reddit, a platform that combines news aggregation, discussion forums, and social media, has seen its daily active users grow from 53.9 million in 2021 to 97.2 million by Q3 2024. This growth has been fueled by trending news events, entertainment releases, and increased user engagement.

• Revenue Growth: Reddit’s revenue increased by 21% in 2023 to $804 million, with a significant leap expected in 2024 to nearly $1.3 billion—a projected growth of 56%-58%.

  
  

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• Profitability Shift: The company projects an adjusted EBITDA of $254 million to $269 million in 2024, marking a transition to profitability.

• Strategic Partnerships: Collaborations with Google Search and OpenAI’s ChatGPT are expected to drive more traffic and monetization opportunities.

With an enterprise value of $30 billion, Reddit trades at 23x sales and 115x adjusted EBITDA, but its competitive advantages and rapid growth may justify the premium valuation.

2. Rocket Lab USA: The Rising Star in Space Technology

Rocket Lab, known for its partially reusable rockets, is a major supplier for NASA, the U.S. Space Force, and other top-tier clients.

• Key Milestones: Successfully launched its Electron rocket 58 times and is set to debut its Neutron rocket, capable of carrying 15 metric tons, later this year.

• Revenue Surge: Revenue grew modestly by 16% in 2023 but is projected to rise 77% in 2024, reaching $434 million.

• Backlog and Demand: With a backlog of $1.05 billion and 12 launches in the first nine months of 2024, Rocket Lab is positioned for steady growth.

Though currently unprofitable, its $15 billion enterprise value at 35x projected sales for 2024 reflects investor confidence in its long-term scaling potential.

3. Innodata: Transforming AI Data Processing

Innodata has transitioned from a traditional IT services provider to a leader in AI-focused data preparation. Its microservices streamline the process of preparing data for AI applications, a critical need for major cloud providers.

• AI Demand: Innodata’s microservices are used by five of the “Magnificent Seven” tech companies, driving steady revenue growth at a CAGR of 12% from 2019 to 2023.

• Explosive Growth: Analysts project an 89% revenue increase in 2024, reaching $164 million, with a net profit of $23 million compared to a loss in 2023.

• Valuation: With an enterprise value of $1.3 billion, the stock trades at less than 8x sales and 61x earnings, making it an attractive play in the expanding generative AI market.

Why These Stocks Stand Out

Unlike cryptocurrencies, which are speculative and volatile, Reddit, Rocket Lab, and Innodata are grounded in innovative industries with sustainable growth trajectories. While they carry some risks due to high valuations, their robust revenue projections and market leadership positions make them appealing choices for investors seeking high-potential opportunities in tech.

Also Read: Tesla Stock Surge Faces Challenges with Potential Sales Decline in 2024