Investors often dream of buying the small stocks that become the most important companies on the market. Highfliers such as Amazon once traded as small caps, and today's investors continue to seek the next Amazon.

No analyst can guarantee that they have found that stock, and the potential may not seem evident until the stock is well past a small-cap status. But if one can tolerate some volatility, companies such as Roku (ROKU -3.83%) and Upstart Holdings (UPST -7.65%) hold the potential for considerable returns.

1. Roku remains a strong leader in streaming

In many respects, Roku looks like the future of television. The streaming services company has successfully drawn content providers, audiences, and advertisers to its platform.

That audience continues to increase despite the effects of the economy or post-pandemic reopenings. In the third quarter of 2022, streaming hours surged 21% year over year, while active accounts grew 16% to over 65 million.

As of the end of Q2, Roku led the world with a 23% market share on devices, according to an industry report from Conviva. However, that came as a result of holding a 32.6% market share in North America, the most mature market. Unfortunately, outside of North America, it must compete with the likes of Amazon, Apple, and Samsung.

Moreover, in its latest report, Roku cited economic struggles related to the ad market. That meant its Q4 forecast called for reduced platform and player revenue year over year, a stark decline for a company that reported 55% revenue growth in 2021. Also, after it turned profitable in 2021, a $261 million loss and revenue declines make a profitable 2022 unlikely.

Consequently, the stock has plunged, losing nearly 90% of its value compared with its intraday peak of about $491 per share in July 2021.

However, investors may take comfort in its price-to-sales ratio, which has fallen to an all-time low of just under 3. If advertising can make a near-term comeback, and assuming the platform can make gains on its rivals outside of North America, investors could score massive gains if they buy the dip on Roku stock.

2. Upstart is ready for a comeback

Upstart has begun to disrupt a longtime method of determining creditworthiness -- Fair Issac's FICO score. It utilizes artificial intelligence to approve more loans while reducing the risk of default. Amid rapid growth and the prospect of industry disruption, the stock shot higher in 2021, briefly moving above $400 per share.

Nonetheless, since that time, Upstart stock has dropped nearly 95% from its all-time high. The fact that only two banks make up a majority of its business has long weighed on investors. Also, declining loan volumes amid higher interest rates hit revenue hard, a factor that led to investors dumping the stock.

And given these changes for the worse, one can understand the decline. In Q3 2022, revenue declined 31% to $157 million. This is a stark change from Q1, when yearly revenue growth came in at 156%.

But for all of its challenges, the model appears to work. For example, FICO's highest-rated borrowers defaulted 10.2% when they received Upstart's lowest rating. In comparison, they defaulted only 0.7% of the time when both FICO and Upstart gave a borrower their highest ratings. Thus, Upstart's model can approve more loans without increasing risk.

Additionally, after starting with personal loans, the company ventured into the much larger auto and small business lending markets last year. It also plans to evaluate mortgages, which will increase its addressable market size again.

And thanks to the drop in the stock price, the P/S ratio has fallen below 2. This is a massive discount considering it reached a peak of almost 44 in September 2021. As more lenders begin to understand that they can loan money more safely using Upstart's tool, it could return to its $400-per-share high and beyond.