Innovative companies that disrupt entire industries can produce life-changing returns for patient investors. Some of the best-performing stocks in the past two decades have been fueled by advances in cutting-edge areas such as artificial intelligence and genomic medicine.

If you're looking for growth stocks that are at the spear's tip of innovation, you might want to check out Bluebird Bio (BLUE 1.13%) and Arista Networks (ANET -0.02%). These two companies are changing the game in their respective fields, which should lead to impressive returns for long-term investors. Here's a brief overview of why I'm buying both stocks hand over fist right now.

Bluebird Bio: A gene therapy juggernaut

Bluebird Bio is a speculative growth play that could generate market-beating returns for early shareholders. To date, the biotech has successfully developed two groundbreaking gene therapies approved by the Food and Drug Administration (FDA).

Skysona is the first and only gene therapy for cerebral adrenoleukodystrophy (CALD), a devastating condition that causes progressive brain damage. Zynteglo is the first gene therapy for transfusion-dependent beta-thalassemia (TDT), a severe form of anemia that requires frequent blood transfusions. Both of these therapies offer a one-time treatment that can cure the underlying genetic defect and improve the quality of life for patients and their families.

Nonetheless, Bluebird Bio hasn't been rewarded by the market for its achievements. The stock has plummeted by almost 50% year to date, as investors worry about the company's cash burn and the slow uptake of its gene therapies. Bluebird had $364 million in cash and equivalents at the end of the first quarter, which it expects to last until the fourth quarter of 2024. Such a short cash runway is far from ideal for an early commercial-stage gene therapy company. 

Moreover, Bluebird faces competition from other biotechs developing alternative treatments for TDT and sickle cell disease, another indication the biotech is targeting with lovo-cel, its late-stage candidate that's under review with the FDA. A decision is expected by Dec. 20.

So why should you consider buying Bluebird Bio at these depressed levels? The answer is simple: The company needs to capture only a tiny sliver of the CALD, TDT, and SCD markets to generate billions in annual revenue. That's an enticing value proposition for a company with a sub-$400 million market cap at the time of this writing. 

Nonetheless, Bluebird isn't a stock for risk-averse investors, as there are many challenges and uncertainties ahead. But if you are willing to take a long-term view and embrace some volatility, you might be rewarded handsomely by this gene therapy juggernaut.

Arista Networks: A direct line to the AI revolution 

Arista Networks is a leading provider of high-performance cloud networking solutions that enable faster and more efficient data transfer across various platforms. This company is at the forefront of the artificial intelligence (AI) revolution, as AI applications require high-speed networks to function optimally. Arista, which specializes in advanced routers and switches for data center and network communications companies, has a competitive edge in this rapidly growing market.

Arista's strong position in AI infrastructure has been reflected in its impressive financial performance recently. In its latest quarter, the company beat analysts' expectations for both revenue and earnings, thanks to the increasing demand for AI solutions across different sectors. Arista also projected a robust 30% growth in its revenue in 2023, driven by the continued expansion of AI architectures. 

Arista's stock has been richly rewarded for its stellar financial performance this year, with its shares up 47.6% through the first seven months of 2023. As a result, the networking giant's stock is currently trading at over 30 times forward earnings, which isn't exactly a bargain from a historical standpoint. However, this premium valuation seems to be justified by the enormous potential of AI. After all, AI will only become more pervasive and influential in the future. Arista, as a key player in AI infrastructure, stands to benefit from this long-term trend.