If you’ve been fixated on the usual suspects in the S&P 500, you might be missing out on some solid action. Many mid-cap stocks have been delivering stellar gains in the first few weeks of this month, and there’s a good chance the momentum will stick around.
I believe they’ll prove to be more nimble than the large-cap stocks. It’s worth looking at them because they are comparatively trading at more attractive valuations and they also strike the sweet spot between the stability of large caps and the growth potential of small caps.
The S&P MidCap 400 index has outpaced the S&P 500 index year-to-date. It’s not just a flash in the pan, either. Historically, mid-caps have outperformed both their larger and smaller counterparts in 55% of rolling five-year periods since 1983. As such, it’s worth looking deeper into each top mid-cap performer.
I’ve screened the top mid-cap stocks trading in U.S. exchanges by their year-to-date gains.
A computer display with stock graphs revealing the performance of large-mid capitalization U.S. equities.
10. Nebius Group NV (NASDAQ:NBIS)
- YTD Performance: 18.1%
Nebius Group (NASDAQ:NBIS) is primarily an AI-centric cloud platform. It offers GPUs as a service and has cloud infrastructure, along with developer tools for clients.
The company recently announced a strategic equity financing of USD 700 million, which was apparently oversubscribed (meaning more people wanted in than there were shares available). This money will likely fuel Nebius’s push to roll out its AI infrastructure around the globe faster than planned.
It has also been building GPU clusters in the U.S. Plus, it doesn’t hurt that NVIDIA itself is backing Nebius, which immediately puts it on a lot of investors’ radars. Their AI cloud business alone is tracking an annual run rate of $120 million, and 2025 revenue guidance is somewhere in the range of $750 million to $1 billion.
9. Hut 8 Corp (NASDAQ:HUT)
- YTD Performance: 23%
Hut 8 Corp (NASDAQ:HUT) mines Bitcoin (BTC-USD), so it’s pretty obvious why this company is on this list. Bitcoin is over $104,000 as of writing and there’s chatter on CNBC about it potentially doubling this year. I personally don’t think that’s going to happen, but you never know where market mania could carry this.
Regardless, it announced plans to upgrade its mining fleet in December and increase its Bitcoin mining capacity. It’s also working on a major project called Vega, a 205 MW facility set to come online in Q2 2025. It is also moving into AI computing power, though Bitcoin mining is still its main business by a long shot (about 60-70% of its revenue).
As with any investment in the crypto space, any investment here will be on the whims of Bitcoin’s erratic price action. As such, it’s very tough to gauge where HUT stock could be at the end of the year. The consensus price target is around $33.
8. Argan (NYSE:AGX)
- YTD Performance: 24.1%
Argan (NYSE:AGX) is a construction company that does a lot of work in the power industry. It has seen surging revenue and backlog and has recently declared a quarterly dividend of $0.365 per share. One of its subsidiaries — Gemma Power Systems — also got the go-ahead for a 700 MW combined-cycle natural gas-fired power plant in the U.S.
Argan reported Q3 FY2025 results, with revenue up 57% year-over-year to $257 million, whereas net income jumped to $28 million from $5 million in the prior-year quarter. There’s a lot of revenue coming in, and they’ve been managing to maintain a hefty cash balance with little to no long-term debt. This strong balance sheet has definitely been one of the reasons investors have kept an eye on them.
I believe it’s still a good long-term investment. If AI continues to be a hot topic and sees continuous amounts of investments pouring in, there’s no reason to believe that power demand is going to come down.
7. CleanSpark (NASDAQ:CLSK)
- YTD Performance: 25.6%
CleanSpark (NASDAQ:CLSK) is a pure-play Bitcoin miner. As I said before, Bitcoin miners are quite unpredictable and are for people who are fine with making very high-risk, high-reward bets.
CleanSpark’s annual revenues came in at $378.9 million for fiscal 2024. Of course, revenue alone doesn’t tell the whole story. Their net loss was at $145.8 million for the year, but adjusted EBITDA rose to $245.8 million from $25 million in the prior fiscal year.
In addition, CEO Zach Bradford said their growth strategy set them up nicely in a market that’s becoming more bullish on Bitcoin — he specifically said they’ve been on a “sustained growth trajectory.”
All things considered, if Bitcoin continues climbing, expect CLSK to do the same. If the reverse happens, it could end up in a disaster.
6. MP Materials Corp (NYSE:MP)
- YTD Performance: 27.8%
MP Materials (NYSE:MP) is a rare earth minerals company and the company operates in the Mountain Pass mine in California (the only integrated rare earth mining and processing site in North America), so it’s got a unique place in the American supply chain.
They reported a net loss for Q2 2024, primarily due to reduced revenue from rare earth concentrates; apparently, they’ve been trying to improve profitability but have faced “challenges” doing so.
Another flashpoint: China’s ban on exporting certain minerals to the United States stirred up extra attention around MP Materials. The company has insisted it’s heavily investing in processing and refining capabilities, presumably so that once demand creeps back up, it can boost future returns.
In my opinion, it is still worth buying. MP stock is undergoing a recovery rally and the stock remains down some 62% from its peak in 2022. If demand starts to bounce back more, so will the stock.
5. Riot Platforms Inc (NASDAQ:RIOT)
- YTD Performance: 27.9%
Riot Platforms (NASDAQ:RIOT) is a well-known Bitcoin miner. This company is heavily focused on Bitcoin, and as with most Bitcoin miners, the returns here are quite unpredictable going forward.
Regardless of the variables in play, I think that it is still worth researching if you are looking for high-risk, high-reward stocks. In 2024, for instance, the company reported a 155% increase in its deployed hash rate. It is now arguably one of the fastest-growing Bitcoin miners. Riot mined 516 BTC in December alone.
All things considered, if Bitcoin soars, Riot could ride that wave in a big way. Conversely, if we head into another crypto winter, Riot’s business model will be tested, and investors could feel some pain.
4. UniFirst (NYSE:UNF)
- YTD Performance: 30.6%
UniFirst (NYSE:UNF) is a workplace uniform and protective gear company. So, if you’ve ever seen employees in matching uniforms at places like car dealerships, restaurants, or manufacturing plants, there’s a good chance UniFirst had a hand in supplying them.
I believe the onshoring trend accelerating in the past two years and the increasing amount of protectionism has had a hand in UNF stock bottoming out and starting a solid recovery rally in recent months. This uniform company is even ahead of most software firms in terms of year-to-date gains.
Something else that turned heads was UniFirst’s confirmation that they rejected an acquisition proposal from rival Cintas Corporation at $5.3 billion. The company basically said, “Thanks, but no thanks.” UniFirst probably wants to remain independent and sees significant upside on its own.
3. Semrush (NYSE:SEMR)
- YTD Performance: 33.5%
Semrush (NYSE:SEMR) is one of the most well-known Search Engine Optimization (SEO) tools out there. SEO is very critical for any website on the web, as most websites receive their traffic from Google or some other search site. Semrush’s tools can help websites understand whether or not their website is optimized for such search engines.
Semrush has recently raised its revenue outlook to $375 million to $376 million and on top of that, it is weaving more AI features onto its platform. Plus, it has seen consistent increases in both paying users and overall sales. Semrush hit 82,000 customers at the time of their IPO in 2021 and that momentum has continued to carry forward.
2. Inari Medical Inc (NASDAQ:NARI)
- YTD Performance: 53.57%
Inari Medical Inc (NASDAQ:NARI) makes medical devices to treat blot clots in veins and their main products are designed to remove clots from deep veins and pulmonary arteries without using clot-dissolving drugs.
Much like the company I’ve discussed above, Inari Medical has also risen sharply due to an acquisition deal being announced. Stryker announced it’s buying Inari Medical for $4.9 billion at $80 per share in cash.
In their last reported quarter (Q3 2024), they pulled in revenue of $153.4 million, up 21.4% from the same quarter the previous year. That’s impressive growth, no doubt. However, they’re still operating at a loss, with a GAAP operating loss of $13.6 million in that quarter. It’s worth noting that this is a bigger loss compared to the $2.1 million operating income they had in the same quarter of 2023.
Again, I think the acquisition deal should be focused on more than the financials here.
1. H&E Equipment Services Inc (NASDAQ:HEES)
- YTD Performance: 82.29%
H&E Equipment Services Inc (NASDAQ:HEES) rents out heavy machinery used for construction and industrial usage. They also sell and service this equipment, but rentals are their bread and butter.
The recent bump was caused by United Rentals announcing that they would be buying this company for $4.8 billion on January 14. The current market capitalization is at $3.26 billion, so there’s still some money to be made by shareholders if this deal does materialize.
H&E reported total revenues of $384.9 million, which was actually down 4% from the previous year. Their net income also took a hit, dropping to $31.1 million from $48.9 million in the same quarter last year. Regardless, I believe the acquisition is what’s going to make or break the stock this year. The financials matter much less right now.
While we acknowledge the potential of HEES as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HEES 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 was originally published at Insider Monkey.
