Since Donald Trump’s election victory in November, a handful of stocks have seen explosive gains, with some more than doubling in just a few months. While some of these moves are tied to market trends, others are directly linked to expectations surrounding Trump’s policies.
Among the biggest winners are Geo Group (GEO), AppLovin (APP), and SoundHound AI (SOUN)—three stocks that have each soared over 100% since the election. But after such massive rallies, do they still have room to run, or is it time for investors to take profits?
Geo Group (GEO) – A Trump Policy Play That’s Already Priced In?
Geo Group has seen its stock surge 105% since Election Day, as investors bet on stricter border security and immigration policies under Trump’s leadership. The company provides correctional and detention services, and with the administration pushing for tougher enforcement, demand for Geo’s facilities could increase.
Investors are speculating that new government contracts could drive more revenue. However, Geo’s financial performance hasn’t been particularly strong. Over the past four quarters, the company has generated just $36 million in profit on $2.4 billion in revenue, with little revenue growth in recent years.
Despite this, the stock now trades at over 110 times trailing earnings, a valuation that suggests much of the potential upside is already priced in. While a major new contract could push the stock even higher, investors should be cautious about assuming the rally will continue without a tangible boost to earnings.
AppLovin (APP) – A High-Growth Stock That May Be Overheating
AppLovin has been one of the biggest winners since Trump’s victory, with shares climbing 121%. However, the stock’s rally isn’t tied to politics—its massive spike came the day after the election, when the company reported 39% revenue growth for Q3 2024, reaching $1.2 billion in sales.
Investors are particularly excited about AppLovin’s expansion into e-commerce advertising, which could open up a new multi-billion-dollar revenue opportunity. While Trump’s economic policies and potential rate cuts could support growth stocks like AppLovin, the stock’s lofty valuation is a concern.
At over 110 times earnings, AppLovin is priced for perfection. Unless the company delivers significant profit growth in the coming quarters, the stock could be vulnerable to a pullback. While its long-term growth story remains intact, investors may want to consider whether it’s time to lock in some gains.
SoundHound AI (SOUN) – An AI Hype Play That Needs to Prove Itself
SoundHound AI has been on an absolute tear, with shares soaring 165% since Election Day. The company, which specializes in voice-enabled AI technology, has benefited from increased enthusiasm around artificial intelligence.
However, much of SoundHound’s recent momentum is tied to partnership announcements, rather than anything directly related to the political environment. In December, SoundHound announced that its AI-powered Smart Ordering system had launched at Torchy’s Tacos and Church’s Texas Chicken locations, giving investors renewed confidence in its commercial viability.
Despite these wins, profitability remains a major concern. SoundHound AI reported $67 million in revenue over the past 12 months, but its net loss totaled $111 million. At a price-to-sales multiple of 65, the stock is trading at an extreme valuation that leaves little margin for error.
For the stock to continue climbing, SoundHound AI will need to show significant improvement in its earnings. Until then, investors should be cautious about chasing the recent hype.
Final Thoughts
These three stocks have delivered massive gains in just a few months, but their future outlooks are very different. Geo Group’s rise is tied directly to Trump’s policies, but the stock may have already priced in the upside. AppLovin has strong growth potential, but its valuation looks stretched. SoundHound AI is an AI hype favorite, but without a clear path to profitability, it could be risky.
For investors sitting on large gains, now might be the time to reassess whether these stocks still have room to run—or if it’s time to take some profits.