Investing in cutting-edge innovation stocks can be extremely rewarding from a financial perspective. Companies pushing the boundaries of innovation, however, also tend to be exceptionally risky. Most companies within this space are cash-flow negative, making them heavily reliant on public offerings for funding. Moreover, they are frequently developing products and/or services for markets that don't yet exist. 

All that being said, some speculative growth stocks do harbor the very real potential to deliver life-changing returns for early shareholders. Here are two such stocks that could generate monstrous returns on capital over the long run.

Medical equipment on top of a laptop keyboard.

Image source: Getty Images.

1. Beam Therapeutics

Beam Therapeutics (BEAM 7.57%) is a biotechnology company pioneering a new way of editing genes called base editing. Unlike the CRISPR-Cas9 system, which cuts and repairs DNA strands, base editing changes the genetic code without creating double-stranded DNA breaks. 

This innovative genome-editing method is designed to enable more accurate and efficient gene corrections, which could lead to the development of functional cures for a wide variety of diseases. 

Beam Therapeutics is currently testing its base editing platform in early-stage trials for sickle cell disease and a form of blood cancer called acute lymphoblastic leukemia. The biotech is also preparing to initiate additional trials for inherited disorders such as glycogen storage disease and alpha-1 antitrypsin deficiency. Additionally, the company has ongoing partnerships with multiple leading pharma companies such as Pfizer

Why invest in Beam? Beam is still far from generating consistent revenue from product sales. However, its novel genome-editing approach could prove to be a superior platform compared to other gene-editing techniques. If so, Beam's shares could deliver outstanding returns for years to come. The downside is that the biotech's true value proposition won't become clear until more human trial data is available.

2. Nano-X Imaging

Nano-X Imaging (NNOX -0.17%) is a small medical device company with big aspirations. The medtech aims to revolutionize the medical imaging industry by developing low-cost, digital X-ray technology that can be deployed in remote and under-served areas. To this end, Nano-X recently scored 510(k) clearance from the Food and Drug Administration to market Nano.ARC, a multi-source digital 3D tomosynthesis system. 

Nano-X's strategic goal is to create a global network of Nanox.ARC devices that can be connected to a cloud-based platform, called Nanox.CLOUD, that will provide artificial intelligence-based image analysis, diagnosis, and treatment recommendations. The company plans to offer its services on a pay-per-scan basis, which ought to substantially lower the cost for patients.

Why invest in Nano-X? The medtech's novel business plan could disrupt the global medical imaging market, which is currently valued at over $30 billion a year in annual sales. In short, Nano-X has a huge growth opportunity in front of it due to the pressing need for innovative solutions to widen access to this life-saving technology in rural parts of the U.S. as well as emerging markets, where access is limited and demand is high.

What's the risk? Nano-X's shares have already more than doubled in value this year. As a result, the medtech's stock is trading at an astronomical 86.8 times 12-month-trailing sales. This nosebleed valuation, however, won't seem so lofty if the company can successfully execute its vision to democratize medical imaging via AI solutions and cloud computing. 

All that being said, Nano-X's intriguing value proposition may require a multi-year holding period to bear fruit. The company is literally building its market from the ground up, which is no easy task. The good news is that demand for its products and services ought to be robust. Nano-X, after all, is well positioned to fill an area of high unmet medical need in both the U.S. and worldwide.