Beta Than Ever: The High-Beta Stocks to Consider for Your Portfolio

Key takeaways

• A high-beta stock is a volatility measure where the gains and losses are bigger than the rest of the stock market
• The tech and biotech industries often have the high-beta stocks due to the volatility of these markets
• Tesla, Nvidia and Shopify are all examples of recent high-beta stocks

Welcome to the world of high-beta stocks, where dizzying highs and lows can be found to make or break your portfolio. Sure, it’s a little dramatic, but high-beta stocks are only for those with the risk appetite to handle them. We have an explainer on high-beta stocks and which ones to look out for in the market.

The high-beta stocks usually appear in the volatile tech market. You can navigate the field better by using AI investing to help. Q.ai’s Emerging Tech Kit handles everything for you, from digging through the data to weighting the Kit’s holdings as needed to help you stay ahead of the curve.

Download Q.ai today for access to AI-powered investment strategies.

What are high-beta stocks?

In the financial world, beta measures how volatile a stock is compared to the overall market. The market itself has a set beta number of 1.0 — from there, stocks’ beta numbers can deviate from the market base.

A high-beta stock with a beta value of over 1.0 is considered volatile. For instance, if a stock has a beta of 1.75, then they’re 75% more volatile than the rest of the stock market (traditionally the S&P 400).

The more volatile parts of the market, like tech and biotech, often have beta stocks. They move with the market but can experience skyrocketing highs and plunging lows. They’re not for the faint-hearted, so conservative investors beware.

High-beta stocks to look out for

Tesla

Look at any volatile stocks list and you’ll find Tesla there. It’s inevitable that with a stock that experiences massive highs after some good news about its charging system or plunges to huge lows at one of its CEO’s tweets that Tesla has a beta score of 1.5.

We don’t see this changing anytime soon as the hype around the Cybertruck model, Tesla’s AI capabilities and more rivals joining its EV charging network continues to dominate the headlines.

Nvidia

Chip manufacturer Nvidia currently has a beta figure of 1.75. The company’s decade-long foundation of readying itself for the AI revolution more than paid off as Nvidia became the first chip maker to hit a trillion-dollar valuation and its last earnings report being described as the “greatest beat of all time”.

But all of the furore leaves Nvidia stock with further to fall — hence a higher beta rating. Thankfully, Nvidia seems to have solid groundwork in the world of generative AI to continue the party.

Shopify

Shopify’s beta figure is currently at 2.03 thanks to a huge change in the business that’s left the e-commerce company reeling. It recently sold off its shipping logistics arm to Flexport and could record a sizeable loss as a result.

The uncertainty makes Shopify stock a current risk — and, therefore, a candidate as a high-beta stock.

The bottom line

High-beta stocks aren’t good or bad — they simply swing more than the normal stock market. Always do your research before dipping your toe into the world of high-beta stocks so you can try to avoid big losses.

You can use AI investing to help you navigate where high-beta stocks usually live: the tech market. Q.ai’s Emerging Tech Kit takes away the guesswork by having an AI algorithm assess the data, helping you to make smarter decisions on tech stocks and ETFs.

Download Q.ai today for access to AI-powered investment strategies.