Amazon (AMZN 3.15%) has been the quintessential growth stock for nearly a generation. However, the company's market cap currently exceeds $570 billion. That's an enormous figure that will make it hard for the company to produce eye-popping gains from here.
There are some growth stocks that may be able to put Amazon's returns to shame going forward. We asked a team of Motley Fool investors to weigh in, and they picked Aphria (NASDAQOTH: APHQF), Sunpower (SPWR -1.01%), and NovoCure (NVCR 5.47%).
A high-flyer marijuana stock for bold investors
Neha Chamaria (Aphria): It's not easy to replicate Amazon's exponential growth, but there's one stock north of the border that absolutely crushed the e-commerce giant during the year: Aphria, Inc. And it could continue to do so given the red-hot industry in which it operates. Check out the Canadian cannabis stock's jaw-dropping run-up in recent months:
While Aphria's run-up is insane, it isn't all a fluke. Medical cannabis is already legal in Canada, and Aphria is a licensed Health Canada medical-marijuana producer, and among the largest players in the industry. What's striking is that Aphria is already profitable, unlike most of its peers, and is growing its bottom line at a torrid pace. For instance, Aphria's net income surged to $15 million Canadian during its last-reported quarter ended August 31, 2017 from only CA$0.9 million in the year-ago period. Aphria's dried cannabis cash and all-in costs are also declining steadily.
Aphria's pace of growth looks like it's here to stay, given its aggressive efforts to expand its foothold. The company just took a big leap forward by striking a deal with Loblaw Companies' retail-pharmacy chain, Shoppers Drug Mart, to supply medical cannabis for online sale, subject to the chain gaining approval as a licensed cannabis producer. Aphria is already expanding its capacity in anticipation of rising demand for medical pot, but the opportunities could be even bigger if Canada legalizes recreational marijuana in 2018, as planned.
Given the backdrop, it isn't unreasonable to expect Aphria's sales and profits to continue to grow if the marijuana markets open up. As they do, so should the stock price.
A renewable future
Jeremy Bowman (Sunpower Corporation): It's not going to be easy to put Amazon's returns to shame. The e-commerce giant has returned an incredible 60,000% since its 1997 initial public offering (IPO), and has surged 1,300% over the last decade. In order to find a stock capable of such phenomenal returns, investors have to look to a space with huge potential growth, and I think the solar sector and Sunpower fit the bill.
It's clear that renewables, led by solar, are the future of energy consumption. As technology improves, and the world moves away from environmentally harmful fossil fuels, wind and solar will gradually take over. Today, there are many solar manufacturers fighting for market share, as other emerging technologies have in the past. However, the industry should eventually shake out the weak players, leaving a few big winners.
Sunpower is primed to be one such winner as it's a leader in efficiency, which gives it an edge over a number of other competitors. The company also operates in most major solar markets around the world, which should give it an advantage. As solar has gotten cheaper, it has become more popular in developing regions like India and the Middle East. Sunpower also has a stronger balance sheet than many of its peers, which should help it outlast them as the industry moves toward profitability and maturity.
Sunpower's history on the stock market has not been reassuring so far, as the stock has fallen considerably over the last couple of years. Remember, however, that Amazon crashed, too, when the dot-com bubble burst, and has had a number of pullbacks over its history. It, too, also operated for much of its history without making a profit.
The risk/reward profile for Sunpower is high, but it could pay off with huge returns if it wins the battle for solar supremacy.
A new tool in the cancer fight
Brian Feroldi (NovoCure): Physicians have used surgery, radiation, and chemotherapy to fight cancer for decades. While these modalities are effective in treating some types of cancer, they're still woefully inadequate in others.
Glioblastoma multiforme (brain cancer) is one type of cancer where current treatment options still fall short. That's where an innovative healthcare company called NovoCure comes into the picture. NovoCure developed a brand new modality of treatment called tumor treating fields (TTFields) that's giving brain cancer patients new hope.
While the science behind TTFields is a bit complex, the most important takeaways for investors to know is that TTFields are clinically proven to work and are virtually free of side effects. That's a highly compelling combination for potential patients.
Given the advantages, NovoCures's growth has been nothing short of explosive since TTFields received Food and Drug Administration approval a few years ago. As an example, last quarter, Novocure's revenue soared 131%, to $50 million. That marked the ninth quarter in a row that the company put up triple-digit top-line growth.
While NovoCure's growth has been very impressive over the last few years, there's actually ample reason to believe that the company is just getting started. NovoCure believes that TTFields can be used to treat a range of other cancer types, such as lung, ovarian, and pancreatic. If true, then this company's top line -- and stock price -- could be poised for explosive growth for years to come.