Regardless of whether you're a new or seasoned investor, chances are that this has been a challenging year. Since hitting their respective all-time highs, the 126-year-old Dow Jones Industrial Average and benchmark S&P 500 have entered correction territory with declines of more than 10%. Meanwhile, the growth-stock-dependent Nasdaq Composite has lost about a quarter of its value, placing it firmly in a bear market.

Although the unpredictability and velocity of downward swings in a bear market can weigh on investors in the short term, history unequivocally shows that buying high-quality stocks during these downturns is a smart move.

If you have $200,000 at the ready, which won't be needed for bills or to cover emergencies, the following five cutting-edge growth stocks all have the innovative capacity to turn a $200,000 investment into $1 million by 2030.

A messy pile of one hundred dollar bills.

Image source: Getty Images.

Novavax

The first highly innovative company with all the tools necessary to quintuple investors' money by the turn of the decade is biotech stock Novavax (NVAX -2.94%).

Most eyes are on Novavax because of its leading COVID-19 vaccine candidate, NVX-CoV2373. Novavax reported the results of two large clinical trials last year, which yielded respective vaccine efficacies (VEs) of 89.7% (U.K.) and 90.4% (U.S. and Mexico). The company also reported the results of a study involving adolescents earlier this year, resulting in a VE of 80% when the delta variant was dominant.

Only three COVID-19 vaccines have hit the 90% VE mark, and Novavax is the only one of the three that's protein-based. This distinction could make it a popular choice among vaccine holdouts or, at worst, make it the global No. 3 for initial inoculations and booster shots.

Last week, the U.S. Food and Drug Administration's (FDA's) vaccine advisory board voted 21-0, with one abstention, in favor of authorizing NVX-CoV2373 for emergency-use authorization (EUA) in the United States. While the FDA has the final say on issuing EUA, Novavax's leading vaccine candidate looks to be on the path to a green light. 

More importantly, NVX-CoV2373 highlights the efficacy of Novavax's drug-development platform. The company could very well become a leader in infectious disease and combination vaccines.

Lovesac

If you want a cutting-edge company that's well below most investors' radar, consider furniture stock Lovesac (LOVE -0.43%), an innovator that can turn you into a millionaire by 2030 with a $200,000 initial investment.

Typically, the phrase "furniture stock" can put even the most enthusiastic investor to sleep. That's because most furniture retailers rely on foot traffic to brick-and-mortar stores and buy products from the same small group of wholesalers. Lovesac is changing multiple aspects of this stodgy industry and delivering sustainably higher sales growth and margins.

It all starts with the company's furniture. At the end of fiscal 2022, nearly 88% of its revenue came from selling sactionals -- a "sactional" is a modular sectional couch that can be rearranged in dozens of ways to fit any living space. These sactionals come with over 200 different cover choices and can be upgraded to include surround sound systems and wireless charging. To add, the yarn used in the covers for sactionals is made entirely from recycled plastic water bottles, which makes Lovesac's product very eco-friendly.

Aside from its product advantages, Lovesac can lean on its omnichannel sales platform for differentiation. This is a company that successfully pivoted to online sales during the pandemic to reduce its overhead. Even though it has 162 operating stores nationwide, it relies on popup showrooms and partnerships to minimize its costs and boost its profitability.

Employees using tablets and laptops to analyze financial metrics during a conference room meeting.

Image source: Getty Images.

PubMatic

Small-cap, cloud-based programmatic adtech company PubMatic (PUBM -2.92%) is another cutting-edge stock with significant upside potential. As a sell-side provider, PubMatic focuses on selling digital display space for publishing companies.

The beauty of PubMatic's platform is simple: Advertising is steadily shifting from print to digital formats. Whereas the digital ad industry is expected to grow by a little over 10% annually through the midpoint of the decade, PubMatic has been delivering organic growth that's two or more times higher than the industry average.

One of the more intriguing aspects behind PubMatic's growth is its cloud-based infrastructure. Rather than relying on a third party, PubMatic designed and built its cloud infrastructure. Now that the company's sales and digital ad impressions have scaled, it's reaping the rewards of these investments. The end result should be higher margins than its adtech peers.

With a price-to-earnings-growth ratio (PEG ratio) hovering around 1, PubMatic appears grossly undervalued and underappreciated, given the long-term potential of digital adtech.

Planet 13 Holdings

You might not think of marijuana stocks as offering anything "cutting-edge," but a closer look at multi-state operator (MSO) Planet 13 Holdings (PLNH 6.28%) can quickly change your tune.

Whereas most MSOs chose to plant their proverbial flags in as many legalized states as possible, Planet 13 has taken a unique approach to expansion. The company currently has two operating dispensaries, but they're unlike anything you've ever seen.

The Las Vegas SuperStore in Nevada spans 112,000 square feet, which is larger than the average Walmart and features a café, events stage, and consumer-facing processing center. Meanwhile, the Orange County SuperStore in Santa Ana, Calif., spans 55,000 square feet, with 30% of this space devoted to selling. These are the largest dispensaries in the U.S. and a huge draw for tourist-driven markets with cannabis enthusiasts. In terms of nostalgia, Planet 13 can't be beat.

It's also a company that's been innovative with its store designs. Planet 13 is employing self-pay kiosks in its stores to boost sales, has provided personal budtenders for customers, and has positioned its highest-margin products near checkout lanes and at the front of the store. This unique cannabis SuperStore model appears primed for success.

Redfin

A fifth and final cutting-edge stock that can turn $200,000 into $1 million by 2030 is technology-driven real estate company Redfin (RDFN -15.62%). Despite rapidly rising mortgage rates in the near term, Redfin has clear-cut competitive advantages that put it in the driver's seat.

To begin with, Redfin is able to substantially undercut its competition on price. Whereas most real estate companies charge between a 2.5% and 3% commission/listing fee, Redfin's "cost" is either 1% or 1.5%, depending upon how much business has been done with the company. This up to two-percentage-point savings could mean $7,800 extra in sellers' pockets, based on the U.S. median existing-home sales price of $391,200 in April 2022, per the National Association of Realtors. 

Redfin also offers a level of personalization that traditional real estate agencies will struggle to match. It has an iBuying program (RedfinNow) that purchases homes in cash and operates in around four dozen markets and offers Concierge as a tool to help sellers maximize the value of their homes.

Since the end of 2015, Redfin has effectively tripled its share of existing-home sales in the United States. Even with mortgage rates climbing, the company's differentiation can help it become a bigger player in the real estate space.