Some stocks are like the jack-in-the-box toy that kids play with. They wait and wait until the time is right, then they suddenly jump.
Other stocks are more like the Energizer Bunny. They keep going and going. The common denominator is that these stocks all have explosive upward potential.
Which stocks fall into these categories? Here are three explosive stocks to buy right now.
1. Axsome Therapeutics
I think that Axsome Therapeutics (AXSM 0.27%) ranks as one of those "jack-in-the-box" stocks. Shares of the biotech took off earlier in the year but gave up the gains. In recent weeks, the stock hasn't done much, but I suspect that will change in the not-too-distant future.
Axsome originally planned to resubmit for U.S. approval of AXS-07 in treating migraine in the second half of this year. Now, it expects to refile in the first half of 2024.
The company could still meet the initial goal of submitting for U.S. approval of AXS-14 in treating fibromyalgia in the fourth quarter of this year. However, Axsome has expanded the window to allow for the possibility that the filing will slip into Q1 of 2024.
Although these slippages were disappointing to investors, they don't change the underlying narrative for Axsome. The company should still be on track to potentially add two other approved drugs to its lineup, both of which could generate peak sales of several hundred million dollars.
Meanwhile, Axsome already has a potential future blockbuster drug on the market with Auvelity in treating major depressive disorder. Its relaunch of sleep-disorder drug Sunosi, which was acquired from Jazz Pharmaceuticals, is going well. Axsome's pipeline also features several other promising late-stage candidates.
2. U.S. Bancorp
U.S. Bancorp (USB 0.32%) looks more like the Energizer Bunny these days. Over the last three months, the stock has soared more than 30%. However, the story was much different for U.S. Bancorp earlier this year.
The failures of several U.S. banks caused U.S. Bancorp and most other bank stocks to sink in the first few months of 2023. But investors eventually realized that the stock was a bargain worthy of buying. I think that's still the case.
U.S. Bancorp's shares trade at a forward earnings multiple of only 9.5x, even after the strong rebound in recent months. To put that into context, the S&P 500 trades at more than 19x forward earnings.
The company's balance sheet remains strong and its total deposits continue to grow. U.S. Bancorp should also be able to boost profits as it captures cost synergies from the acquisition of Union Bank.
3. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX -0.06%) is the kind of stock that performs well during up and down markets. While the S&P 500 plunged nearly 20% last year, Vertex's shares soared over 31%. So far in 2023, the stock has jumped close to 20%.
I think that Vertex has a lot of room to run going forward. The company hopes to win U.S. regulatory approvals for exa-cel in treating sickle cell disease in December and for treating transfusion-dependent beta-thalassemia in early 2024.
Vertex expects to launch three other new products over the next five years, all of which could generate peak annual sales of over $2 billion. Late-stage results for two of those programs -- a new vanzacaftor triple-drug combo for treating cystic fibrosis and non-opioid pain drug VX-548 -- should be released by early 2024.
In addition to these promising candidates, Vertex is advancing programs in phase 1 and phase 2 clinical studies that hold the potential to cure type 1 diabetes. This high-flying biotech stock truly could be explosive.
