If you want to generate big investment returns in a relatively short time frame, you'll need to accept a higher level of risk and uncertainty along the way. One way to do that strategically is to invest modest amounts of money into several stocks that have lots of upside potential, but which are by no means sure things.
Three stocks that could be possible 10-baggers over the next decade are Joby Aviation (JOBY 1.69%), Rigetti Computing (RGTI 10.58%), and CRISPR Therapeutics (CRSP -4.20%). Here are the big risks they face, and the possible ways they could pay off for shareholders.
Joby Aviation
The air taxi industry is in its infancy, but there's growing optimism that it could help alleviate congestion in major cities and revolutionize how people travel. Joby Aviation is an early leader in the space, and in August, it completed a piloted flight of its electric vertical take-off and landing (eVTOL) vehicle between two public airports in California, marking a milestone for its business.
If the company obtains regulatory approval for its eVTOL -- and it looks on track to do so in the near future -- then it may begin offering air taxi services as soon as next year. The big question around the business centers around how much demand there will truly be for these services, and how long it may take for Joby to turn a profit, especially given that this will be a capital-intensive industry to operate in.
Analysts at Grand View Research project that the eVTOL market will grow at a compound annual rate of just under 55% through the end of the decade. If that pans out and Joby remains a leader in the industry, it could be well on its way to growing to 10 times its value.
Rigetti Computing
Quantum computing is another long-term play that could make for a compelling investment. These machines have the ability to solve certain unusual types of incredibly complex problems at lightning-fast speeds compared to classical computers that would take years or even centuries to solve. Rigetti recently released the Cepheus-1-36Q, which is the largest multi-chip quantum computer the industry has seen thus far.
CEO Subodh Kulkarni said he believes that the company could reach its key breakthrough within about four years:
"We believe we are still about 3 to 4 years away from getting to the 1,000-plus qubit, 99.9% fidelity with error correction and gate speeds of less than 50 nanoseconds, which is when we achieve quantum advantage."
The higher a machine's qubit count, the more complex the problems it can take on, while a high fidelity indicates a high level of accuracy. Right now, due to the extremely sensitive nature of qubits, accuracy and error reduction are two of the biggest issues companies in the quantum computing space are working to solve.
Rigetti is already generating revenue, but over the past four quarters, it has incurred losses totaling $169 million, and it has burned through $54 million on its day-to-day operating activities. There are still questions about how long it will be before quantum computers are commercially viable and can be reliably tasked to solve complex, real-world problems. And the big risk for investors with Rigetti is that it's unclear whether the tech company will be around in 10-plus years, or that it will remain a big player in the industry if it is.
Rigetti is making good progress, but it still has a lot to prove. If its quantum computers end up being the real deal, the stock could be well on its way to profitability and would be significantly more valuable than its current market cap of $9.6 billion.
CRISPR Therapeutics
CRISPR Therapeutics has the potential to play a big role in revolutionizing healthcare. It already has one approved gene editing therapy, Casgevy, which can treat sickle cell disease and transfusion-dependent beta thalassemia. It acts as a functional cure for both blood disorders, and it could be the first of many more treatments to come from the company.
One particularly exciting candidate therapy involving stem cells is CTX211, which CRISPR is researching as a possible treatment for type 1 diabetes. Meanwhile, a recent study from Japan also found that gene-editing could potentially be used to eliminate the extra chromosome that causes Down syndrome in people with the condition. There's promising potential in this area of healthcare, and CRISPR's stock can provide investors with some terrific exposure to these opportunities.
The company is still in the early stages of rolling out Casgevy with its partner, Vertex Pharmaceuticals, but in the meantime, it's also burning through cash. Over the past six months, it used up $168 million during the course of its day-to-day operating activities. The good news is that with cash and marketable securities totaling over $1.7 billion on its books, the company is well funded to support its current level of cash burn for multiple years.
With a market cap of just $5.8 billion today, this is a healthcare company that can become much more valuable in the next 10 years, but a lot will depend on its success and ability to roll out more gene editing therapies.
