In one year, GameStop stock has risen 2,280%. It is not alone, though. Biotech company Ocugen's stock has risen 2,140% in a year. Meanwhile, Bitcoin mining stock Riot Blockchain rose 863%. All the three stocks drastically outperformed the S&P 500 Index's 32% rise during this time frame.
One year ago, not many people could have predicted the spectacular rise of these stocks. That's because it is very difficult to predict stock price movements. As an investor, a far better strategy is to invest in companies that you believe are working on trends and technologies for the future. In addition to broader trends, it is equally important to look at the company-specific factors that could keep the company ahead of its competition. Stocks of such companies should generate market-beating returns in the long term.
Let's look at three such stocks that have the potential to make you rich in the coming years.
Lucid Group
After Tesla's success in producing and profitably selling electric cars, enthusiastic investors are looking for the next big opportunity in the electric vehicles space. And there is no dearth of options to pick from. However, it is important to remember that not all EV start-ups will succeed in their plans. Of the numerous EV makers that are trying to carve out a niche for themselves, Lucid Group (LCID 1.63%) looks promising.
Image source: Lucid Group.
There are some pretty good reasons for investors' interest in Lucid Group. Unlike several other EV start-ups, Lucid is very close to starting the delivery of its first cars. The company expects to start delivering Lucid Air, its very first model, this year. Building cars requires a lot of groundwork, and Lucid has already completed a major chunk of it.
Moreover, Lucid's cars are expected to be better than those available in the market right now in terms of range and efficiency. Notably, the Lucid Air Dream Edition R has achieved an official Environmental Protection Agency-estimated range of 520 miles, which is the longest range achieved by an electric car so far. Range anxiety is a key concern of EV buyers. Sleek designs and improved range performance could be key factors supporting Lucid Group's growth in the long term.
Lucid Group has an exciting product range and ambitious growth plans. Bear in mind, though, that as a start-up in a competitive niche the company faces several key risks.
QuantumScape
There has surely been a lot of interest surrounding EVs in recent years. Though EVs have been around for decades, lower costs and longer range provided by internal combustion engine vehicles restricted the commercial production and use of EVs in the last century. Advancement in battery technology, falling costs, and government subsidies have made EVs competitive to internal combustion engine vehicles, leading to their increasingly higher adoption.
Image source: Getty Images.
Despite the hype, it is important to realize that EVs differ from ICEs only in the way they are powered. The more advanced, efficient, and low-cost the battery powering it is, the better the EV's performance will be. QuantumScape (QS 1.88%) is working on the next-generation battery technology that could significantly drive down the battery's cost while improving its energy density -- the amount of energy produced per kilogram or per liter volume.
If developed as the company is hoping, QuantumScape's solid-state batteries would provide EVs longer range and faster recharge time. The company's technology is in the development stage, and it expects to produce samples for testing in cars in 2023. QuantumScape expects commercialization of its batteries in 2024. While a lot could go wrong between now and then, the company says it is making progress as per its plans so far.
An experienced management team and investment from Volkswagen lend credibility to QuantumScape's plans. However, though solid-state technology has been researched for years, no company is able to commercialize it so far. While making an investment decision, it is important to realize that QuantumScape stock is suitable only for investors with a high level of risk tolerance.
Bloom Energy
The global need for clean energy cannot be overemphasized. Bloom Energy (BE 7.17%) is trying to address this need in multiple ways. First, its current fuel-flexible solid oxide fuel cells offer a cleaner back-up power option than diesel-powered generators. They can run on natural gas and biogas. With natural gas as the input fuel, Bloom Energy's fuel cells are not entirely clean, but because the fuel is not burnt, the emissions are less.
Image source: Getty Images.
Beyond the current offerings, Bloom Energy is working on several technologies including carbon capture, biogas, and use of fuel cells in its marine segment. Bloom Energy has partnered with Samsung Heavy Industries to replace the latter's oil-based generator engines with solid oxide fuel cells.
Finally, Bloom Energy is developing hydrogen fuel cells and electrolyzers, which offer the cleanest energy storage option. The company's first commercial projects in the hydrogen segment will commence in 2022, with ramp-up expected in 2023.
There are a couple of things to note about Bloom Energy. First, Bloom Energy generates a peer-leading gross margin yet trades at a cheaper valuation. However, it is just entering the hydrogen fuel cell segment, and how it will fare in this segment remains to be seen. Still, Bloom Energy seems to have a good handle on its costs and expects to generate positive cash from operations for the year 2021. If Bloom Energy manages to do the same after its foray into the hydrogen segment, it could be the first company to accomplish that feat.
