Most investors are best served by owning high-quality "forever" stocks, even if these stocks are only apt to produce average returns.
Every now and then, though, there's good reason to take a shot on a higher-risk ticker with a ton of upside potential. The key is just identifying the right -- even if temporary -- growth opportunity.
To this end, here's a rundown of three stocks with the potential to produce monster-sized gains over the course of the coming 10 years thanks to recent technological and sociocultural developments. There are still gains to be made past that point to be sure, but the hottest part of the underlying opportunities should be cooling off by then.
Intuitive Machines
After a 53-year hiatus, mankind is going back to the moon. As of its most recent plans, NASA intends to land astronauts on the moon again sometime in 2027. These missions are going to be considerably more complex than the Apollo landings in the late 1960s and early 1970s, however. This time around we're going to do far more than merely go there and come back. The next missions are ultimately laying the groundwork for future mining, scientific development, and perhaps even colonization. And NASA's using new technologies to ensure the agency gets the very most out of these expensive trips.
Enter Intuitive Machines (LUNR 11.64%).
In simplest terms, Intuitive Machines makes a great deal of the tech that will make the upcoming moon missions a success. Cargo landers, on-surface transportation drones, and in-orbit payload transfer solutions are all in its wheelhouse. It's also developing lunar-based communications satellites and mining/prospecting tools, as well as testing a fission-based power plant that could be deployed as soon as 2028.
The big challenge in owning a stake in Intuitive Machines right now is a lack of profits, or for that matter, minimal revenue. Although there is some revenue being booked, this is mostly modest partnership/developmental funding that's not even fully covering the company's operating and R&D costs.
There's little doubt that the bigger bucks are coming sooner than later, though. Global Market Insights expects the worldwide lunar lander and rover market alone to grow at an average annual pace of about 10% through 2034. This company's equipment just needs to start being sent into space more often -- and to the moon in particular -- to start producing a tangible and meaningful fiscal benefit. That's not going to happen in earnest until the Artemis rocket responsible for getting the next manned moon missions off the ground (literally as well as figuratively) is satisfactory reliable, along with the Orion capsule that will house actual crew members. That's apt to take until the aforementioned 2027.
Just don't tarry if you're a believer. The market's got a knack for rewarding stocks based on a company's plausible future more so than its present.
NuScale Power
The proliferation of data centers (and artificial intelligence data centers in particular) has undeniably given rise to some amazing new technological tools for consumers and corporations alike. Data centers have a serious downside, though. That is, they consume a massive amount of electricity. Not only is this straining too many utility companies' power outputs, but it's environmentally unfriendly. As it turns out, the bulk of the world's current electricity production isn't yet coming from renewables.
NuScale Power (SMR 17.69%) offers an optimal solution to both problems. See, this company designs and builds small-scale nuclear reactors that can be installed and operated where the electricity they generate is needed.
It's not nearly as crazy as it sounds, if the fact that NuScale is far from being the only name working on such tech is any indication. Nano Nuclear and Oklo are also so-called "pure plays" within the small modular reactor (or SMR) space, while Fluor and Brookfield-owned Westinghouse are a couple of the bigger and more diversified companies also working on the idea. It's a legitimate premise, even if there's a bit more work to be done; most of that work is just clearing regulatory hurdles.
Even those walls are starting to crumble, however. On Friday President Donald Trump signed an executive order to ease the regularly requirements for approving new nuclear power reactors. Although not specifically supportive of NuScale Power, it's a big step in the right direction.
Now, interested investors might not want to blindly rush into a position here. This stock has outright soared just since late last week, mostly in anticipation of President Trump's executive order. Shares have more than doubled since their early April low, in fact, nearing a 52-week high as a result. Given that the company's still got years of work left to do before meaningful, profit-producing revenue starts to flow, this stock could slide just as easily as it rallied.
Just keep the bigger, 10-year picture in mind, using any decent pullback as a buying opportunity. Goldman Sachs believes artificial intelligence alone is going to fuel a 165% increase in data centers' usage of electricity between now and 2030. Solar, wind, and hydro power installations on their own can't keep up with that pace.
Recursion Pharmaceuticals
Finally, add Recursion Pharmaceuticals (RXRX 7.72%) to your list of monster stocks to buy and hold for the next 10 years.
Just as the name suggests, Recursion is a drug company. Although it's got nothing on the market yet, it has six different drugs in early-stage trials right now. Most of these drugs are being developed in partnership with better-known pharma companies, including Sanofi, and the bulk of its R&D pipeline is aimed at cancer, where the opportunity for better treatments is always significant.
That's not the compelling reason you might want to take on a 10-year stake in Recursion Pharmaceuticals, however. Rather, the reason Recursion is such a hot prospect is how it's designing and developing the drugs in its pipeline. Simply put, this company is using artificial intelligence to digitally figure out what pharmacologically works -- and what doesn't work -- before any resources are needlessly consumed.
Image source: Getty Images.
It's called Recursion OS. With 36 petabytes (36 million gigabytes) worth of proprietary data about chemical, biological, and molecular reactions ready to be accessed by a hypothetical drug-development test, pre-trial R&D work that used to require months if not years to complete can now be done in weeks, if not days. Costs that normally measure in the millions of dollars can be pared back to hundreds of thousands of dollars, or less.
Recursion OS isn't a substitute for true clinical trials, to be clear -- the FDA and other regulatory agencies will still require these drugs to go through the real-world testing process. The AI-powered platform can provide a drug developer with a much better idea of what's likely to fail or succeed, though, limiting wasted resources or perhaps encouraging the development of a treatment that might have otherwise been left untreated.
Like Intuitive Machines and NuScale, Recursion Pharmaceuticals is presently unprofitable, and likely to remain that way for some time.
That doesn't really matter in the long run, though. Recursion Pharmaceuticals is well-positioned to lead the artificial intelligence drug discovery market that Straits Research expects to grow an annualized pace of more than 30% through 2030. That should put it on a trajectory that gets it over the profit hump. Investors are of course likely to reward mere progress toward that point in the meantime.
