Three Stocks That Tripled in 2024: Best Buy for 2025?

Sweetgreen (NYSE: SG) is a well-known salad restaurant chain that became publicly listed in 2021. At the beginning of 2024, the stock had seen a significant decline of nearly 80% from its initial public offering (IPO) price, leading many to believe that investors lost interest in this salad-focused company. However, 2024 turned out to be a remarkable year for Sweetgreen.

By November, Sweetgreen's stock had more than tripled in value over the course of the year. Despite giving back some of its gains by year-end, the overall performance was impressive. Sweetgreen wasn't the only stock to experience substantial growth; other companies like Reddit (RDDT) and IonQ (IONQ) also saw their stocks more than triple in 2024.

In this article, we'll explore the reasons behind the successes of these three stocks in 2024 and identify which one could be the best investment for 2025.

Sweetgreen: Up 184%

When Sweetgreen went public, it was viewed as a high-growth company. However, the extent of its losses became a significant concern for investors. Toward the end of 2023, the management team began to shift focus by introducing its vision known as the Infinite Kitchen. This initiative captured the interest of investors in 2024.

The Infinite Kitchen emphasizes automation in food preparation. Specifically, through advanced kitchen technology, robotic machines can handle much of the salad preparation process. This approach is particularly important when considering that, in the first three quarters of 2024, labor and related costs consumed 28% of the company’s revenue, marking it as their largest operating expense. Reducing these costs through automation would greatly enhance profitability.

The Infinite Kitchen strategy is still in its early stages. At the start of the third quarter, Sweetgreen operated two automated restaurant locations out of its 225 establishments. However, by the end of the quarter, that number had increased to ten. As this automation scales in 2025 and beyond, there's optimism that profits will rise, contributing to the stock's impressive gains in 2024.

While revenue growth is slowing as the company shifts its focus toward profitability and a slower pace of opening new restaurants, earnings before interest, taxes, depreciation, and amortization (EBITDA) have begun to increase. The real impact of the Infinite Kitchen is yet to be fully realized.

Reddit: Up 224%

Reddit's stock experienced a noteworthy rise of 224%, particularly commendable since the stock only had part of the year following its initial public offering (IPO) in March. The company's strong financials made it hard for investors to ignore.

Over the past two years, Reddit has demonstrated accelerating top-line growth—a rare investment opportunity. In the third quarter, the platform reported a 68% year-over-year revenue increase, totaling $348 million. This remarkable growth is attributed to the addition of millions of new users and growing demand for advertising.

In addition to impressive revenue growth, Reddit's gross margins have improved and reached over 90% in the third quarter. With rising revenue and enhanced gross margins, the company has also seen its free cash flow surge.

One significant factor in Reddit's growth has been its international expansion. The company effectively leverages artificial intelligence (AI) to translate existing content into various languages, thus capturing new users in different markets. While it is still in the early stages, with only 49 million users internationally, this opens up opportunities for future growth.

IonQ: Up 237%

IonQ stock enjoyed an impressive rise of over 400% in the last three months of 2024, culminating in a total tripling of its value for the year. Alongside several other quantum computing stocks, IonQ's performance raised eyebrows. While skepticism regarding the quantum computing industry is reasonable, the company also showcased positive developments during 2024.

A challenge with investing in IonQ is that many investors may not fully understand quantum computing. IonQ employs the trapped ion approach, one of several methodologies existing in the field. Without expertise, it can be challenging to assess which methods are superior.

Seeking third-party validation can provide insights into the company’s potential. IonQ's hardware is available on all major cloud computing platforms, giving it a distinctive edge. Furthermore, the U.S. government has also expressed support for IonQ's products, as shown by a recent $55 million contract from the Air Force Research Lab to explore the practical deployment of quantum computers.

Final Thoughts: My 2025 Pick

Many analysts predict that the quantum computing market may eventually be worth hundreds of billions of dollars. If IonQ remains at the forefront of this industry, it could present significant long-term investment opportunities.

Similarly, Reddit has been growing rapidly, especially in untapped international markets. Currently boasting only about 100 million active users, there is potential for significant future growth where that number could increase dramatically.

However, based on current valuations, I believe that Sweetgreen stock presents a more straightforward path for upside potential in 2025. Although Sweetgreen is trading at five times its sales—an observed concern amid slowing growth—the shift toward profitability may enhance its overall growth trajectory. If the Infinite Kitchen proves effective, management may pursue new openings with the robotic automation in its kitchens.

Sweetgreen has previously indicated its goal of potentially expanding to 1,000 locations compared to fewer than 250 currently. Targeting operational cost reductions is fundamental in achieving this expansion, and they are on the right track. Therefore, Sweetgreen stock stands out as my top pick among these three stocks for 2025.

stocks, growth, investment