Electric vehicle maker Tesla (TSLA 3.11%) has undoubtedly made many early investors extremely rich. And with the business still being in its early growth stages, there are significant opportunities ahead for the company. The problem is that at a $1 trillion valuation, the stock isn't cheap, and the potential for it to double or triple in value over the long term may not be all that likely.

Investors may instead be better off investing in smaller companies that are aren't as hyped up, where doubling in value is a more reasonable prospect. Two such stocks to consider, with valuations of less than $1 billion are Agrify (AGFY +0.41%) and Vuzix (VUZI 6.50%). Not only are they attractive growth buys, but larger businesses could eye them as possible acquisitions.

Image source: Getty Images.

1. Agrify

Agrify aims to help companies in the cannabis industry with cultivation and extraction. Key to that are Agrify's vertical farming units (VFUs) that are stackable and allow cannabis producers to grow more efficiently. Through its growing solutions, which involve software automation, Agrify claims that it can help producers generate six times the crop yield they would obtain through traditional growing methods while achieving up to 29% more cannabis potency.

The company has already attracted the attention of multi-state operator Curaleaf, which in July entered into a multi-year research and development partnership with Agrify. It involves "evaluating the impact of certain environmental conditions" that the VFUs control. Given its potential importance to a large marijuana producer in ramping up its operations (Curaleaf has generated $1.1 billion in sales over the trailing 12 months), it wouldn't be surprising to see a possible buyout in Agrify's future if the MSO likes what it sees. 

In its most recent quarter, for the period ending Sept. 30, Agrify's sales of $15.8 million grew by 460% year over year. And although the business remains unprofitable, its long-term future looks promising: CEO Raymond Change notes that Agrify is in "advanced discussions with over 20 MSOs."

Year to date, shares of Agrify are up over 70% (the S&P 500 has risen 21%). But whether it's through a possible acquisition or just signing up more MSOs, Agrify is a stock that certainly has the potential to skyrocket in the years ahead as it establishes itself in the cannabis sector.

2. Vuzix

Another company that I see as a potential acquisition target for a bigger player is Vuzix, which makes smart glasses that utilize augmented reality (AR). Two particularly attractive applications for the glasses are in logistics, where barcodes can be scanned simply by looking at them, and in healthcare, where surgeons can see a wealth of information while keeping their hands free. In July 2020, the company announced its first AR surgery where its M400 glasses provided real-time information, helping guide a surgeon through a knee replacement operation.

Vuzix is in the early innings and, like Agrify, is still proving itself. That makes now an exciting time to invest in its business. Through the first nine months of 2021, Vuzix reported sales of nearly $9.9 million, up 34% year over year. Its $23 million loss during that time rose 63% from a year ago as the company has incurred greater overhead and research and development expenses with expanding its business. For that reason, it can be a bit of a risky buy. But with no long-term debt on its books, $129 million in cash and cash equivalents, plus some promising smart glasses that could be of value to a big tech company, Vuzix is a growing business that could look extremely attractive to a potential acquirer. 

The stock is up just 5% this year, but to me, it's an under-the-radar stock that could be worth a buy today.

Sizing up the opportunity

Here's a quick overview of how the different companies match up with the industries they are in and the compounded annual growth rate (CAGR) of each one:

Data source: BDSA, Fortune Business Insights, Grand View Research.

Tesla has already a fairly high valuation with respect to its industry size. Agrify and Vuzix, at much smaller market caps in some fast-growing sectors of their own make it more likely that their values will rise in the near future, whereas Tesla may already be approaching a peak (if it hasn't already hit one).