3 Stocks That Have Doubled Since Trump’s Election Win: Can They Still Go Higher?

Since Donald Trump’s victory in November, the stock market has seen remarkable movements. Some stocks have not just risen; they’ve absolutely skyrocketed. Among the standouts are AppLovin (NASDAQ: APP), SoundHound AI (NASDAQ: SOUN), and Geo Group (NYSE: GEO), each doubling in value post-election. So what’s fueling these impressive performances, and are they still viable investments today? Let’s break it down.

AppLovin: A Double-Edged Sword

AppLovin has surged an impressive 121% since the day after Trump’s win, driven primarily by its stellar third-quarter results released shortly after the election. The company reported 39% revenue growth with sales hitting a whopping $1.2 billion for the period ending September 30, 2024.

Investors are particularly drawn to AppLovin’s recent foray into e-commerce advertisements, opening up new revenue channels that could fuel further growth. However, it’s crucial to note that AppLovin trades at a staggering 110 times its trailing earnings. Such an astronomical valuation raises red flags about sustainability. If economic improvements and lower interest rates take hold, growth stocks like AppLovin may indeed thrive, but for current holders, now may be the time to consider cashing out before a potential correction occurs.

SoundHound AI: Riding the AI Wave

Next on the list, we have SoundHound AI, which has claimed a staggering 165% increase since November. This surge isn’t Just a result of the election; it exploded after the company launched its AI Smart Ordering product in various restaurants, notably at Torchy’s Tacos and later with Church’s Texas Chicken.

Nonetheless, SoundHound AI’s impressive revenue growth is still overshadowed by its unprofitable status — reporting a net loss of $111 million against revenue of just $67 million in the past year. With its current 65 times price-to-sales ratio, investors need to remain cautious. Without improving earnings, this stock could struggle to maintain its upward momentum. It’s recommended that investors take a wait-and-see approach for now.

Geo Group: The Policy Play

Finally, let’s look at Geo Group, a company specializing in correctional and detention services, which has seen a 105% jump in stock price since the election. This increase is likely driven by expectations of new government policies related to crime and border control that could favor the company economically.

Historically, Geo Group hasn’t been a standout performer — with a net profit of just $36 million over $2.4 billion in revenue across the last four quarters, coupled with minimal growth over the years. However, its recent stock rally is largely based on hope rather than solid numbers. If Trump’s administration comes through with big contracts for Geo Group, there’s significant potential for further upside. But with the stock currently trading at over 110 times its trailing earnings, caution is advised here as well.

Final Thoughts: Time to Trade?

Each of these stocks has demonstrated remarkable advances since Trump’s election win, but the question remains: can they continue to pile on gains? While AppLovin’s e-commerce pivot and SoundHound’s innovations in AI are promising, their lofty valuations could serve as a cap. Geo Group, while showing potential due to its direct relationship with government policy, still carries risks of being overvalued.

For traders on trend, a clear strategy is essential. Consider taking profits on these stocks, or at least adopt a cautious approach with stop-loss orders. The momentum is enticing, but don’t let fear of missing out cloud your judgment as the next earnings reports roll in. Always remember, in trading, it’s not about holding onto stocks for dear life but about capitalizing on momentum while managing risk.

Ready to make your next trading move? Look for stocks with solid fundamentals that support their valuations. Stay sharp, and good luck on the trading floor!