You've no doubt heard the adage, "Money doesn't grow on trees." The old saying is true. But how does money grow? By investing it in assets whose value increases.
The good news is that you don't have to have a lot of money upfront for it to grow. The even better news is that some assets have the potential for turbocharged growth. If you've got $2,000 to invest, here are three growth stocks to buy that could double your money over the next five years or less.
1. Intellia Therapeutics
Intellia Therapeutics (NTLA 2.72%) stock has tripled since the market crash of 2020. That impressive gain remains intact despite the gene-editing pioneer's shares plunging more than 75% from the peak set in mid-2021. Intellia is on a roll so far in 2023. I think the momentum should continue.
I'm not alone in that view. The consensus Wall Street view for Intellia is that its share price could skyrocket nearly 140% over the next 12 months. Why is there such enthusiasm about the stock? The answer is that analysts like Intellia's pipeline prospects.
The U.S. Food and Drug Administration (FDA) recently cleared the way for Intellia to advance NTLA-2002 into phase 2 testing for the treatment of hereditary angioedema (HAE), a genetic inflammatory disorder. While there are therapies already approved for HAE, they require lifelong administration. NTLA-2002 holds the potential to be a one-and-done treatment.
Intellia and Regeneron are working together to develop NTLA-2001 in treating rare genetic disease transthyretin (ATTR) amyloidosis. The two partners expect to initiate a pivotal study of the gene-editing therapy later this year.
Intellia's market cap currently stands at close to $3.5 billion. Positive news from these two clinical programs could easily cause the biotech company's valuation to double within the next few years.
2. Axsome Therapeutics
Axsome Therapeutics (AXSM -0.39%) stands out as another biotech stock with tremendous growth potential. Unlike Intellia, though, Axsome is off to a dismal start this year. My prediction is that a rebound is on the way.
The company already has two products on the market with great prospects. Auvelity launched in the U.S. in October 2022 as a treatment for major depressive disorder. Axsome acquired sleep-disorder drug Sunosi from Jazz Pharmaceuticals in May 2022.
Several likely catalysts are on the way. Axsome expects to resubmit for FDA approval of AXS-07 in treating migraine in the second half of 2023. It should file for FDA approval of AXS-14 in treating fibromyalgia this year as well. The drugmaker also plans to announce results from a late-stage study of AXS-12 in treating narcolepsy in the first half of 2023.
Analysts think that Axsome could go a long way toward doubling in just the next 12 months. The average price target for the stock reflects an upside potential of close to 73%.
3. Nu Holdings
Don't think that all banks are tainted by Silicon Valley Bank's collapse. Nu Noldings (NU 1.15%) serves customers in Brazil, Mexico, and Colombia. It doesn't have any connection with the travails of SVB and other U.S. banks that have had problems. Nu's stock performance underscores this fact with a solid year-to-date gain.
Nu currently ranks as the fifth-largest financial institution in Brazil based on active customers and the sixth-largest in Latin America. Look for the company to climb even higher with its fantastic growth. It continues to attract new customers in the region.
One big difference between Nu and many banks is that it operates a digital banking platform. As a result, Nu's cost structure is low. Its annualized return on equity of 35% is also one of the highest in the financial services industry. With its impressive financials and tremendous growth prospects, even Warren Buffett owns the stock.
Wall Street's 12-month price target for Nu Holdings is 55% higher than the current share price. I think that this stock has much more room to run over the next few years.