These 3 Stocks Tripled in 2024. Which One Is the Best Buy for 2025?

Sweetgreen (SG 3.27%) is a salad restaurant chain that went public in 2021. At the beginning of 2024, its stock price was down nearly 80% from its initial public offering value. It appeared that investors had little interest in this salad-focused stock. However, 2024 turned out to be a very different year. By November, Sweetgreen's stock had more than tripled in value.

Even though Sweetgreen gave back some of its gains towards the end of the year, its 2024 performance was still noteworthy. Other notable stocks, such as Reddit (RDDT 7.13%) and IonQ (IONQ 10.84%), also experienced significant growth, each more than tripling in value this year.

Let's explore the reasons behind the impressive performance of these three stocks and see which one is likely to offer the best opportunity in 2025.

Sweetgreen: Up 184%

Sweetgreen was initially recognized as a high-growth company following its public offering, but its escalating losses were a major concern for investors. By the end of 2023, management started to address these worries by introducing the concept of its Infinite Kitchen model. This change seems to have resonated with investors throughout 2024.

The Infinite Kitchen focuses on automation, enabling salad bowls to be primarily prepared by robotic machines. This strategy is significant, particularly considering that, in the first three quarters of 2024, labor and related costs accounted for 28% of Sweetgreen's revenue, making it their highest operating expense. Reducing this expense through robotics could have a substantial positive impact on profitability.

Currently, the Infinite Kitchen initiative is in its early stages. Sweetgreen began the third quarter with only 2 out of its 225 locations equipped with automation features, but by the end of the third quarter, 10 restaurants had integrated the Infinite Kitchen model. As this strategy expands in 2025 and beyond, expectations for increased profitability have driven the stock's rise in 2024.

While revenue growth is decelerating as the company shifts its focus toward profitability and opens fewer restaurants, earnings before interest, taxes, depreciation, and amortization (EBITDA) are already on the rise, signaling positive momentum.

Reddit: Up 224%

The 224% surge in Reddit's stock is particularly remarkable given that it only had part of the year to achieve this after its initial public offering (IPO) in March. The company's financials have proven to be exceptionally strong.

Over the last two years, Reddit has experienced accelerating top-line growth, a relatively rare occurrence. In the third quarter alone, its revenue soared by 68% year-over-year to reach $348 million, reflecting the addition of millions of new users and rising advertising demand.

Reddit's gross margin has also improved notably, exceeding 90% in the third quarter. With escalating revenue and improved margins, the company is enjoying a surge in free cash flow.

Part of Reddit's growth strategy includes expanding into international markets, driven by effective use of artificial intelligence (AI) to translate existing content into other languages. This expansion is still in its infancy, with only 49 million users in overseas markets, presenting a significant long-term growth opportunity.

IonQ: Up 237%

IonQ stock also triumphed in 2024, tripling in value largely due to a remarkable increase of over 400% in the last three months of the year. While skepticism towards quantum computing stocks is reasonable, IonQ has showcased several positive developments this year.

The key challenge with investing in a quantum computing company like IonQ is the general lack of expertise among investors in this complex field. Different methods of quantum computing exist, each bearing their own advantages and disadvantages; IonQ employs the trapped ion technique.

When individual understanding is lacking, third-party validation becomes crucial. IonQ has garnered such validation, as its hardware is available across all major cloud computing platforms. The Air Force Research Lab recently signed a $55 million contract with IonQ to explore the practical implications of deploying quantum computing technology at scale.

My Pick for 2025

Analysts predict that the quantum computing market could grow to be worth hundreds of billions of dollars in the future. If IonQ is indeed leading this revolution, it could still hold significant long-term growth potential.

Reddit, with its rapidly growing user base, particularly in international markets, also presents opportunities. With approximately 100 million active users, it has significant room for growth.

However, Sweetgreen seems best positioned for 2025 due to its current valuation. Although it’s trading at 5 times sales — not particularly low for a restaurant with slowing growth — its shift in focus to profitability makes it an attractive investment. Should the Infinite Kitchen model enhance unit economics, Sweetgreen is likely to embark on a journey of opening more locations, backed by automation.

Past statements from management indicate the possibility of scaling to 1,000 locations someday, as opposed to fewer than 250 currently. Bringing down operating expenses seems key to achieving this vision, and it’s likely that Sweetgreen is approaching this milestone. Thus, among the three stocks mentioned, Sweetgreen stands out as my top choice for 2025.

stocks, investment, growth