Challenging the Status Quo: Russell 2000 Stocks Outshining the ‘Magnificent Seven’
The ‘Magnificent Seven,’ comprising tech behemoths like Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla, dominated the 2023 market scene with a collective market cap surge of $5.1 trillion. Their stellar performance even led to the birth of an exchange-traded fund (ETF) dedicated to them – the Roundhill Magnificent Seven ETF (MAGS).
However, as 2024 unfolded, the zealous momentum of the Mag 7 waned. While MAGS still marginally outperforms the Nasdaq-100 Index, it owes much of this to the outsized returns of Nvidia and Meta, as certain members like Tesla, Apple, and Alphabet lag behind the broader index.
Conversely, a handful of small-cap stocks from the Russell 2000 Index have seen significant YTD gains surpassing even the explosive growth of Nvidia at 81%, marking a shift from the prolonged era of large-cap dominance.
The Rise of Viking Therapeutics (VKTX)
Established in 2012, California-based Viking Therapeutics specializes in developing groundbreaking therapies for metabolic and endocrine disorders. Their commitment to pioneering treatments has propelled their stock up by 276% YTD, pushing their market cap to $6.4 billion on the back of optimistic data regarding their clinical-stage weight-loss drug.
Analysts have unanimously rated VKTX stock a “Strong Buy,” with a mean target price of $99.11, indicating a potential upside of approximately 40.9% from current levels. Out of the 10 analysts covering Viking Therapeutics, 9 advocate a “Strong Buy” while 1 suggests a “Moderate Buy.”
The Success Story of SoundHound AI (SOUN)
Founded in 2005, SoundHound AI, based in Santa Clara, focuses on developing voice AI and speech recognition technologies for various industries such as automotive, IoT devices, and customer service. With a market cap of $2.14 billion, SOUN stock has surged by 268% YTD, partly fueled by a recent investment from Mag 7 member Nvidia.
Wall Street analysts have bestowed a “Strong Buy” rating on SOUN stock, with a mean target price of $6.97, offering a 15% upside potential. Of the 6 analysts covering the stock, 5 advocate a “Strong Buy,” while 1 opts for a “Hold.”
The Emergence of Apogee Therapeutics (APGE)
Situated in San Francisco and established in 2022, Apogee Therapeutics is a nascent player in the biotech realm, focusing on developing top-notch biologics for immunological and inflammatory disorders. With a market cap of $3.5 billion, APGE stock has soared by 149% YTD, buoyed by favorable trial outcomes.
All 6 analysts covering APGE stock recommend a “Strong Buy,” with a mean target price of $78.20, reflecting a potential 12% increase from current levels.
Exploring the Unpredictable World of Small-Cap Stocks
Unveiling Fate Therapeutics (FATE)
Embarking on a journey in 2007, San Diego’s Fate Therapeutics (FATE) operates at the crossroads of innovation where hope meets science. Their focus on induced pluripotent stem cells (iPSCs) places them at the forefront of developing cutting-edge cellular immunotherapies for challenging foes like cancer and autoimmune disorders.
With a market cap dancing around $760 million, Fate Therapeutics has been a sensation in the market, boasting a staggering 109.8% YTD climb. The recent surge in late January, spurred by whispers of Steve Cohen’s hedge fund joining the fan club, amplified its allure.
The analyst circus surrounding Fate Therapeutics is a mixture of hope and caution. A chorus of “Moderate Buy” echoes in the air, accompanied by a mean target price of $7.23 – a slight discount from current rates. However, the tantalizing Street-high target of $12 sings a siren song of a potential 52.6% leap.
Among 21 analysts dissecting FATE stock, the musical chairs yield: 6 “Strong Buys,” 13 “Hold” notes, 1 “Moderate Sell,” and 1 solitary “Strong Sell” tune.
Introducing Hippo Holdings (HIPO)
Stepping into the arena in 2015, Hippo Holdings (HIPO) shines a beacon in the realm of property insurance, particularly focused on the shelter of homeowners through their innovative InsurTech prowess. They have mastered the art of a seamless online journey – from quotes to coverage to claims – redefining the insurance narrative.
Navigating with a market cap gracing $439.3 million, the HIPO stock has been a whirlwind, boasting an almost miraculous 111% surge in the YTD performance. The echoes of celebration were loudest on March 6, as HIPO’s stellar Q4 2023 earnings report eclipsed even the wildest analyst dreams.
The analyst jury seems charmed by the Hippo charm, deeming the stock a “Moderate Buy” with a melody of a mean target price at $21.33, forecasting a pleasant 10% ascent from present altitudes.
Within the panel of 5 analysts chronicling HIPO’s journey, the ensemble comprises: 2 “Strong Buys,” 1 “Moderate Buy,” and 2 “Hold” refrains.