Meet the Unstoppable Stock That Obliterated Nvidia, Broadcom, and Advanced Micro Devices (AMD) Over the Last 12 Months With a 670% Return

One year ago, Opendoor Technologies (NASDAQ: OPEN) stock was trading at just $0.51. However, retail investors sparked a buying frenzy through social media platforms like Reddit and X (formerly Twitter), which sent the stock to a 52-week high of $10.52. It has since lost some momentum and closed at $4.73 last Thursday, June 18, but that still represents a 12-month return of 670%.

That's right, this real estate stock has crushed artificial intelligence (AI) semiconductor giants like Nvidia, Broadcom, and Advanced Micro Devices, which have returned between 44% and 323% over the last 12 months. However, here's why investors probably shouldn't chase the rally in Opendoor stock.

Image source: Getty Images.

Opendoor has a risky business model

Selling a home is one of the biggest financial decisions most people will ever make, so they usually hire a professional agent to manage the process. But not even the best agent can guarantee a sale, especially in this tough market, which is why many vendors have turned to Opendoor.

A seller can enter a few details about their home on Opendoor's website, and the company will provide a cash offer with a short settlement period. Opendoor attempts to flip each home for a profit, which is a business model known as iBuying. It works great when the real estate market is strong, but when prices are falling, the company risks sitting on thousands of homes that are dropping in value.

The real estate market is in a very difficult place right now, as stubbornly high interest rates keep first-home buyers, upsizers, and even downsizers on the sidelines. According to Redfin, there were 47% more sellers than buyers in April, which was near a record high. U.S. existing home sales are also hovering near a multiyear low of 4.17 million annualized units, with no sign of a looming recovery.

US Existing Home Sales data by YCharts

It's very difficult for vendors to achieve the price they want in this market, so it's extremely difficult for a high-volume seller like Opendoor to make money. The company must exercise discipline to avoid a similar fate to former competitors like Zillow and Redfin, which both shut down their iBuying businesses completely after suffering steep losses when the 2021 real estate boom ended.

Shrinking revenue and ballooning losses

Opendoor sold 1,921 homes during the first quarter of 2026, which was a 35% drop from the year-ago period. The sales brought in revenue of $720 million, which was down 37%. These results were a direct consequence of management's decision to slow the pace of home acquisitions last year amid the tough real estate market.

But Opendoor's new CEO, Kaz Nejatian, who took on the role last September, is now ramping up the rate of purchases again. With the help of technologies like artificial intelligence, his strategy is to buy homes more aggressively while reducing the amount of time Opendoor typically holds on to them. He thinks if the company can flip its inventory at a faster pace, it will be less susceptible to broader market forces that are outside its control.

As a result, Opendoor bought 2,474 homes in the first quarter. That was still down from the year-ago period, but it was up by 45% sequentially (compared to the fourth quarter of 2025).

It's too early to render a verdict on Nejatian's strategy, but it's worth noting Opendoor's generally accepted accounting principles (GAAP) net loss more than doubled to $173 million during Q1. He will have to get this under control, because it's no use buying more homes if it will just lead to higher losses.

In his Q1 remarks to investors, Nejatian did say that as of April 1, Opendoor was profitable on an adjusted (non-GAAP) 12-month go-forward EBITDA (earnings before interest, tax, depreciation, and amortization) basis. That is more of a projection than an achievement in my opinion, because a lot can change in the upcoming year.

Don't bank on further upside in Opendoor stock

Opendoor stock probably wouldn't have experienced such a fierce rally over the last 12 months if not for the social media-driven speculative buying frenzy among retail investors. Based on the financial results I highlighted above, the company simply hasn't made enough progress to warrant its meteoric rise in value.

To make matters worse, the Federal Reserve is now hinting at a potential interest rate hike before the end of 2026, which will only pile more pressure on the sluggish housing market. As a result, while Opendoor has obliterated some of the AI industry's best-performing stocks over the past year, I wouldn't bank on further upside from here.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Nvidia, Reddit, and Zillow Group. The Motley Fool has a disclosure policy.