We recently published a list of the 7 Best Performing Long Term Stocks in 2024. In this article, we are going to take a look at where MicroStrategy Incorporated (NASDAQ:MSTR) stands against the other best performing long term stocks in 2024.
After the latest 50 basis point rate cut by the Federal Reserve, the market has been performing well. All of the major market indices have been in the green since then and experts are taking it as a good sign.
We discussed the Fed’s rate cut in our article about the best day trading stocks. Here is an excerpt from the article:
“…the Federal Open Market Committee (FOMC) chose to lower its policy interest rate by 50 basis points, a move intended to ease monetary policy. Powell explained that this action reflects growing confidence that labor market strength can be maintained, while inflation continues to decrease toward the Fed’s target. Powell emphasized the Fed’s flexibility in its approach and noted that future rate changes will depend on incoming data and the evolving economic landscape.
When questioned about the likelihood of future rate cuts, Powell said that each decision would be data-driven and made on a meeting-by-meeting basis. The Summary of Economic Projections (SEP) suggests a federal funds rate of 4.4% by the end of the year, with further reductions expected in the years ahead, which points to expectations of lower inflation and slightly higher unemployment.”
Understanding the Current Stock Market Optimism
Lead writer for Markets Live at The Wall Street Journal, Gunjan Banerji also shares the market’s optimistic sentiment as she explained in an interview with CNBC on September 25. Banerji discussed the growing optimism in the stock market despite ongoing bullish sentiment for the past few years. She highlighted how the recent rate cut by the Federal Reserve boosted market confidence, with the VIX (volatility index) dropping to its lowest levels and other indicators like high-yield bonds and options showing continued belief in the rally.
Dominic Chu of CNBC expressed concerns about potential market overconfidence, given the calmness amid geopolitical risks, the upcoming U.S. presidential election, and consumer spending challenges. Banerji acknowledged these risks but emphasized that much of the market’s optimism is tied to the Fed’s actions, with people reassured by the larger-than-expected rate cut.
Finally, Banerji pointed out a broadening of the market rally beyond the tech sector and mentioned the strong performances in sectors like energy and materials, and record highs from companies like Caterpillar and McDonald’s, which indicates a healthier, more diverse market rally.
Our Methodology
For this article, we used stock screeners to identify nearly 60 mid to mega-cap stocks with year-to-date share price returns of over 100%. Next, we narrowed our list to 7 stocks with the highest average analyst price target upside, as of September 24. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds. The stocks are sorted in ascending order of their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is MicroStrategy Incorporated (NASDAQ:MSTR) the Best Performing Long Term Stock in 2024?
MicroStrategy Incorporated (NASDAQ:MSTR)
Average Analyst Price Target Upside: 27.70%
Stock Price Performance YTD: 124.58%
Number of Hedge Fund Holders: 26
MicroStrategy Incorporated (NASDAQ:MSTR) is a well-known player in the field of artificial intelligence-driven enterprise analytics. It provides software and services across multiple regions, including the United States and Europe.
The company’s flagship product, MicroStrategy ONE, provides non-technical users the ease to access valuable insights that aid in decision-making. Additionally, the MicroStrategy Cloud for Government offers important threat-monitoring services, designed to meet the complex technical and regulatory requirements of government bodies and financial institutions.
In addition to its software capabilities, MicroStrategy (NASDAQ:MSTR) has made a significant mark in the cryptocurrency landscape. Since 2020, the company has been accumulating Bitcoin and has emerged as the largest corporate holder of this digital asset.
As of September 20, it reported an impressive total of 252,220 Bitcoin, having invested approximately $9.9 billion in this venture. Recently, the company added 7,420 Bitcoin to its holdings at a total cost of about $458.2 million.
The acquisition came on the heels of another substantial purchase just a week earlier when it acquired 18,300 Bitcoin for around $1.11 billion, averaging $60,408 per Bitcoin. Overall, the company has added 25,720 Bitcoin to its balance sheet during the third quarter alone.
10 analysts have given MicroStrategy (NASDAQ:MSTR) a Buy rating and its average price target of $196.50 has an upside of 27.70% to the stock’s price on September 24. Year-to-date, the stock has gained 124.58%.
Overall, MSTR ranks 5th on our list of the best performing long-term stocks in 2024. While we acknowledge the potential of MSTR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.