The key to making a lot of money in the stock market is to find those small-cap stocks that will become much, much bigger. You want to find a company with a $5 billion market cap that will one day cross the $100 billion mark and keep on going.

Adaptive Biotechnologies (NASDAQ:ADPT) and Smartsheet (NYSE:SMAR) are both around that $5 billion valuation now. And these two small-cap companies have platforms that will support incredible growth, and riches, for years to come.

Dollar bill folded into arrow pointing up.

Image source: Getty Images

Unlocking the secrets to the human immune system

Right now, there are people who are naturally immune to COVID-19. Imagine that. These people have caught the disease, and yet the coronavirus did nothing to them. No symptoms, no illness, nada. Wouldn't it be nice to know how that happened?

Adaptive Biotechnologies is now studying those people in order to map our immune response to COVID-19. Once it accomplishes that feat, we will be one step closer to finding vaccines or cures for the disease.  

Adaptive believes that our immune system is the key to healthcare. For instance, the whole idea of vaccines is to make a person immune to a virus. A vaccine actually introduces tiny particles of a disease (usually, it's weak or dead cells, so that you won't get sick). Your body starts naturally producing antibodies to attack this disease. Once you have enough of these antibodies in your system, your immune system will overwhelm the viral invader and keep you from getting sick.

Our immune system doesn't just fight foreign invaders like viruses or bacteria. It also fights mutated cells -- the cancer that can kill us from within. Adaptive is now working with Genentech, a division of Roche, to create a new treatment paradigm for people with cancer. Adaptive will map the T-cell receptors of individual patients, and Genentech will be able to quickly identify and manufacture a drug specific for each patient's needs. The two companies are also working on "off-the-shelf" drugs that work based on shared cancer antigens.

Adaptive's ability to map our immune system is miles ahead of what anybody else is doing. The company is mapping 30 billion immune receptors in the human body. And Adaptive has data rights to 20 billion of those receptors. The market doesn't see it yet, but Adaptive's science is incredibly valuable. And the stock will be much more valuable down the road than it is today.

A SaaS stock that allows real-time collaboration

Since its initial public offering in 2018, Smartsheet is up 167% versus a 16% return in the S&P 500. Smartsheet has accomplished these amazing returns by growing its revenue by 50% every quarter, year-over-year. And with its "land-and-expand" strategy, Smartsheet is increasing its popularity with its customers, each of which represents a number of employees with more subscribers being added all the time.

Smartsheet's dollar-based net retention rate is 132%. That's an outstanding number. While there's always a bit of churn, with some subscribers dropping out, the overall number shows how popular Smartsheet's offering is. The company has not only renewed 100% of its subscribers from last year but increased the number of subscribers 32% from its existing customer base.  

Smartsheet offers a dynamic work platform that allows multiple people to collaborate over the internet. What makes this stock so intriguing is that more and more white-collar workers are working from home. While for many people this is a temporary situation due to the COVID-19 lockdown, there are many benefits to remote work. It creates a lot of flexibility for employees and allows employers to find the best workers regardless of geography. 

Research company Gartner recently commissioned a poll about work trends. The No. 1 trend was the increase in remote work. It's projected that 48 percent of employees will work remotely after the pandemic, versus 30% prior to COVID-19. Smartsheet's collaborative offering will only benefit from these trends.

Another major market for the company is the federal government. Smartsheet has obtained authorized status from the Federal Risk and Authorization Management Program, or FedRAMP; it's the only company with a collaborative offering to do so. (FedRAMP is a U.S. government program focused on standardization of security in the cloud.)
The company has created a platform for government workers (Smartsheet Gov) allowing federal employees to collaborate in real time across agencies.

During the COVID-19 crisis, Smartsheet created its own dashboard for its employees in dealing with this health emergency. Smartsheet then provided free templates to federal employees. As CEO Mark Mader said in the press release, "Government agencies can now use Smartsheet to plan, coordinate, track, and communicate their COVID-19 response, free of charge and without obligation."

These two small caps have a big future ahead

Adaptive Bio and Smartsheet are going after massive market opportunities. And both companies have a lot of optionality in their platforms. Adaptive's technology can revolutionize healthcare and the way we understand and treat diseases. And Smartsheet is making huge progress in allowing people to collaborate and work virtually. While these two companies are small caps today, both are strong contenders for mega-cap status down the road.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.