A Year of Rebound: How Three Large-Cap Stocks Soared in 2024
The past year has been a remarkable one for Sea Limited, Axon Enterprise, and Spotify Technologies. After a dismal 2022 and 2023, these large-cap stocks made a stunning comeback in 2024, with gains of 162%, 130%, and 138%, respectively. But what drove this remarkable turnaround, and which of these stocks has the most upside potential in 2025?
Revenue Growth Fuels Sea Limited’s Surge
Sea Limited’s stock price surge can be attributed to its accelerating revenue growth rate. After a modest 4.9% increase in 2023, the company’s revenue jumped by 25.6% year over year through the first nine months of 2024. This top-line growth has been driven by its e-commerce platform, which has seen significant investment in sales and marketing. Although this led to a quarterly net loss, the segment has continued to grow, reaching a year-to-date high of 43% in Q3 2024.
Axon Enterprise Expands into New Products and Markets
Axon Enterprise, known for its Tasers and body cameras, has been branching out into new products and use cases. Its drone business, for example, has been used by first responders in the aftermath of Hurricane Helene. The company expects to report revenue growth of approximately 32% to $2.07 billion for full-year 2024, following two consecutive years of greater-than-30% growth. While Axon’s growth is impressive, its relatively small size compared to its full market opportunity suggests plenty of room for long-term expansion.
Spotify’s Premium Subscribers Drive Growth
Spotify’s stock has officially erased its 75% plunge from 2021 and 2022, driven by a healthy customer base and increasing premium subscribers. As of Q3 2024, its premium subscriber base was up 12% year over year to 252 million users, despite price increases. This growth has led to improved profit margins, with Spotify’s gross margin and operating margin hitting all-time highs in Q3.
Which Stock Has the Most Upside Potential in 2025?
While all three stocks have impressive growth stories, Sea Limited stands out as the most undervalued. Trading at just 4 times sales, Sea’s stock is significantly cheaper than Axon’s 24 times sales. Additionally, Sea’s e-commerce business is surging, and its financial services and video game segments are experiencing accelerated growth. With plenty of room to grow, Sea Limited is poised to continue its upward trajectory in 2025.
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