Got some cash you're ready to put to work for a while? That's not easy to do these days. It feels like AI stocks are overperforming at the expense of everything else. If those AI stocks suffer an overdue price correction, though, it still feels like everything else could suffer as well. Talk about a catch-22!
The good news is, risks and rewards aren't quite as imbalanced for every name as they seem to be on the surface. You just need to dig a bit deeper than you normally might to find risk/reward scenarios that make sense. Here's a closer look at three such prospects that might just be worth a $1,000 investment.
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GE Vernova
By the time General Electric decided in 2021 to split itself up into more logical, stand-alone entities, it was too late. Investors had already lost hope -- and interest -- convinced the once-great titan had no place in the 21st century.
As it turns out, however, at least one of its spinoffs has proven it's still relevant. That's GE Vernova (GEV +1.70%) -- the business unit that manufactures heavy machinery for the wind, nuclear, hydro, and steam power production industries. It also makes grid-connectivity tech, storage solutions, and the software needed to make it all work. The company did $35 billion worth of business last year (nearly half of which was recurring revenue stemming from services), up 5% year over year, but also received orders for more than $44 billion worth of equipment.
This is likely only the beginning, though, given the growing need for power driven by the proliferation of artificial intelligence data centers. Earlier this year, Goldman Sachs predicted that by 2030 the industry would need 165% more electricity than it's currently consuming.
NYSE: GEV
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As nice as it would be to meet this need with clean renewable energy sources, this option just isn't feasible yet. The traditional power plants provided by GE Vernova will have to do for now and into the foreseeable future. Data center owners/operators are now even going directly to the source. Earlier this year, AI infrastructure provider Crusoe ordered an additional 19 gas turbines from GE Vernova to generate electricity right where it's being consumed, upping Crusoe's total order to 29 units.
This is just a taste of GE Vernova's future. As of the end of the third quarter, the company's total backlog stands at $135.3 billion, and continues to grow faster than it's delivering this machinery.
CRISPR Therapeutics
The idea of "editing" human genetic code has been around for decades. It's just not been possible.
That is, until now. Several years ago, Emmanuelle Charpentier, Ph.D., and Jennifer Doudna, Ph.D., recognized the potential of using a particular protein to find and cut into bacterial DNA's clustered regularly interspaced short palindromic repeats -- or CRISPR -- to repair damage it may not be able to repair on its own. The rest, as they say, is history.
Charpentier and Doudna founded CRISPR Therapeutics (CRSP +0.30%) shortly thereafter, soon beginning human clinical trials based on this science. The pair won a Nobel Prize in Chemistry for their work back in 2020, in fact, even before the company won its first-ever approval for any gene-editing therapy back in late 2023. That's Casgevy, for the treatment of transfusion-dependent beta thalassemia.
This approval, however, doesn't represent the full potential of CRISPR-based gene-editing. That's a big reason this biotech stock really hasn't budged since Casgevy was approved -- investors may be waiting to see how trials of its cardiovascular disease and diabetes therapies pan out before diving in. That, and the fact that the market may not recognize it can take months to make and then administer patient-specific dosing of Casgevy.
NASDAQ: CRSP
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It's coming, though. Analysts expect more than a quadrupling of this year's projected top line for next year, once many of Casgevy's earliest patients finally begin receiving their full revenue-bearing doses of the drug.
But as veteran investors can attest, a wait-and-see approach isn't always the right one. Once the market realizes there's a multi-month lag between the point in time where treatment begins and when billing is completed, it could light a fire under the stock. Updates on its CRISPR-based drug CTX112 for the treatment of several different ailments in the year ahead could also prove catalytic, if only by virtue of validating this approach to gene-editing.
Taiwan Semiconductor Manufacturing
Finally, if you've been keeping tabs on the semiconductor industry's biggest names of late, then you likely already know that some once-unthinkable partnerships are being forged. Intel and Nvidia are now jointly developing artificial infrastructure tech, for instance, while Microsoft continues to work with OpenAI even though OpenAI's ChatGPT competes with Microsoft's AI-powered chat-based assistant Copilot. Nothing appears to be off-limits anymore.
Yet, understandably so. Demand for artificial intelligence computing tech is growing faster than the industry can deliver it. Whatever meets the need fastest is the "right" solution.
There's one name in the industry that doesn't need to forge any partnerships it doesn't want to, though. That's Taiwan Semiconductor Manufacturing (TSM +0.54%), which -- despite the industry's best efforts to wean itself from its deep dependence on the company -- still reportedly manufactures the vast majority of the world's high-performance computer chips. As it turns out, building competing semiconductor foundries is complicated, expensive, and time-consuming. Just ask Intel, which has dialed back its ambitious plans made during the pandemic to start manufacturing more of its own and others' silicon.
NYSE: TSM
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Even Nvidia (which is a major customer of Taiwan Semiconductor Manufacturing) sees it. Nvidia CEO Jensen Huang commented in August, "I think TSMC is one of the greatest companies in the history of humanity, and anybody who wants to buy TSMC stock is a very smart person," indirectly acknowledging the third-party manufacturer's dominance of the chipmaking market isn't at any real risk in the near or distant future.
This doesn't mean the company's results don't ebb and flow. It just means that lulls like the stock's pullback from October's peak are a buying opportunity.
