It has been a good year for most investors, but not every investment has participated in the rally. About a third of American listed shares will be trading lower in 2024. Many of them won’t recover until they address the reasons they lagged, but more than a few could beat the market next year.
Advanced micro devices (NASDAQ: AMD), Comcast (NASDAQ: CMCSA)And Real estate income (NYSE:O) There are three stocks trading slightly lower this year that could emerge from laggards to leaders by 2025. Let’s take a closer look at these potential candidates for a recovery.
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The rising popularity of artificial intelligence (AI) has driven demand for AI processors to fuel the resource-intensive revolution. Some of the biggest winners in the market have been AI chips, but somehow AMD hasn’t managed to get its chin back above the pull-up bar since the beginning of this year. AMD is just one of eight stocks with a market cap above $200 billion that will trade lower in 2024.
The company is certainly benefiting from the AI boom. In the data center segment, revenue increased by 122% his last quarter. The $3.5 billion in revenue it generated in the quarter is more than half of its $6.8 billion in revenue.
Yes, AMD is faltering in other categories too. The gaming business has plummeted 69% in the past year, and the embedded segment recorded a 25% year-over-year decline. This doesn’t mean this company is stuck in reverse like its stock chart in 2024.
The overall business is still growing – and at an increasingly rapid pace. The 22% increase that AMD recorded in the third quarter is the strongest sales increase in two years. Some analysts may predict an overall slowdown for AMD’s AI business, but still see revenue growth accelerating to 27% for all of 2025.
Profitability is growing even faster and more than doubled in the last quarter, so the segments moving in the wrong direction are not impacting the bottom line. AMD isn’t cheap at 26 times forward earnings, but if it can continue to grow its overall business above 20% in the coming years, it could be a bargain at these prices.
Shares of Comcast fell nearly 10% on Monday, making it the latest entry into the Sinkers of 2024 club. The media giant took a hit after warning it expects to lose more than 100,000 broadband subscribers this quarter. That’s a bigger net decline than the first six months of this year combined, and an accelerating negative trend after the 87,000 internet accounts it lost in the third quarter.