Tech
These 4 crypto-related stocks have beaten the Magnificent 7 tech returns so far this year
Key points
- Four cryptocurrency-focused companies – Riot Platforms Inc., Coinbase Global Inc., MicroStrategy Inc. and Marathon Digital Holdings Inc. – have more than quadrupled so far this year amid the broader cryptocurrency market rally.
- These cryptocurrency-related companies have outpaced the growth of even the fastest-rising Magnificent 7 stocks, such as Apple Inc., Alphabet Inc. and Nvidia Corp.
- The fastest-growing Magnificent 7 stocks over the past year are Nvidia and Meta Platforms Inc., which are up 232% and 164%, respectively, amid a broader tech sector rally following the 2022 crash.
A group of cryptocurrency-focused stocks have racked up notable price gains over the past year, far outpacing the growth of the “Magnificent 7,” a collection of leading, widely traded technology companies.
The tech giants have been credited with lifting markets this year, in particular by capitalizing on growing interest in generative artificial intelligence (AI) and large language models (LLM). However, the cryptocurrency’s resurgence has fueled some of the fastest-growing stock prices amid renewed hopes that a bitcoin exchange-traded fund will be approved.
Bitcoin mining and infrastructure company Riot Platforms Inc. (REVOLT) has seen its shares skyrocket 364% over the year, while virtual currency exchange Coinbase Global (CURRENCY) shares are up 325% in the same time frame. Blockchain Marathon Digital Holdings Inc., a cryptocurrency mining and ecosystem company (MARA) increased by 378%. MicroStrategy Inc. (MSTR), A cloud services and the mobile software company that has invested heavily in Bitcoin in recent years, is up 306%.
Investipedia
The key to the cryptocurrency rally has been a broader rise cryptocurrency prices in the last year. Bitcoin was trading at around $44,000 on Friday, up from $17,000 at the start of the year.
Cryptocurrency skeptics had entered short positions against companies like Riot Platforms and Marathon Digital. The stocks of these companies may have rallied either because investors were forced to buy to cover as well as new long positions by investors hoping to take advantage of the hot cryptocurrency market.
The Magnificent 7 include some of the greatest mega-cap technology companies: Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Microsoft Corp. (MSFT), Meta Platform Inc. (HALF), Google’s parent company, Alphabet Inc. (GOOGLE), Tesla Inc. (TSLA) and Nvidia Corp. (NVDA).
These companies, with already huge ratingshave seen stock prices rise over the past 12 months after declines throughout 2022. However, none of the Magnificent 7 stocks have matched the performance of the four cryptocurrency-focused companies.
The Magnificent 7 best performing companies this year are Nvidia and Meta, which grew by 232% and 164% respectively. Generative Artificial Intelligence (AI) projects have driven demand for Nvidia’s graphics processing units (GPUs), tripling revenue year-over-year in the last reported quarter. Half it has outperformed analysts’ earnings expectations, reduced costs and raised guidance in recent quarters.
The Magnificent 7 largely comprise some of the largest companies in the world, so comparing them to smaller, more focused companies to much smaller companies market capitalizations it can be complicated. However, stock prices often reflect demand and are less dependent on the size of companies.
While Nvidia and Meta come closest to matching the gains of the hottest crypto companies, most other big-name tech stocks have produced rallies that seem paltry in comparison. Amazon has grown 71% over the past year and Microsoft has grown 56%. The lowest-performing Magnificent 7 companies are Apple, with shares up 56%, and Google, up 52% year to date.