Finding hypergrowth stocks with 1,000% upside potential in today’s market isn’t easy. The recent AI boom has soaked up a lot of the speculative capital that would have otherwise flowed into emerging tech leaders. And with the Federal Reserve laser-focused on tamping down whatever is left of inflation, Wall Street remains obsessed with profitability over growth.
But the good news is not all of the market has gotten the memo. Some incredible secular growth stories continue to trade at depressed valuations simply because they aren’t as buzzy or don’t fit the profitability mold yet. But give them another two to three years, and these businesses could deliver 10X returns once the market wakes up to their immense potential.
Here are the pockets of opportunity investors want to consider right now.
CleanSpark (CLSK)
Bitcoin (BTC-USD) might not be your thing, but Bitcoin miners offer a unique opportunity in today’s market. With the Bitcoin halving event quickly approaching in 2024, followed by potential Fed rate cuts, the backdrop looks increasingly bullish for mining stocks like CleanSpark (NASDAQ:CLSK). After its recent pullback, CLSK stock offers explosive upside potential.
In its latest quarter, CleanSpark grew its revenue 47% year-over-year to $45.5 million, driven by hash rate expansion. However, the company posted adjusted EBITDA of $13.3 million, also marking substantial growth versus last year. Impressively, CleanSpark’s Bitcoin production run rate now exceeds 5,600 BTC annually, showcasing its best-in-class capabilities as a miner.
The company recently announced its 16 exahash expansion is fully funded, removing any doubt about its growth trajectory. Once operational in the coming months, CleanSpark will officially run over 150,000 latest-gen miners, cementing its position as one of North America’s largest miners. As CleanSpark also targets record fleet efficiency near 25 tools per terahash, it is poised to generate industry-leading margins.
Predicting future earnings with this company is difficult, due to the nature of the crypto market. Regardless, CleanSpark offers a smart way to gain Bitcoin exposure ahead of the halving event, without direct crypto exposure. Top institutions like BlackRock and Vanguard have taken stakes, confirming the long-term opportunity with this name. Wall Street analysts see over 165% upside over the next year, but it can easily pull off 1,000%+ or more in gains if Bitcoin pops.
Enphase Energy (ENPH)
The solar market has tremendous room for growth in the years ahead. As a leading inverter supplier with exposure across the solar, battery storage, and EV charging sectors, Enphase Energy (NASDAQ:ENPH) looks poised to ride this secular wave higher.
In Q2, Enphase grew revenue 34% year-over-year to $711 million, driven by strong uptake for its IQ8 inverters globally. The company has continued expanding into new European markets, while also preparing for upcoming launches in emerging markets like Brazil. Enphase even landed its first software contract for 3D mapping, validating investments to broaden its ecosystem.
Notably, the company’s gross margin hit 46% last quarter. With operating expenses stable at around 14% of revenue, Enphase is producing high-margin growth. The company expects another solid second half as it scales IQ8 shipments and launches its new IQ Battery 5P across various international markets. According to some analysts, sales and earnings per share could double by the end of 2025.
Despite harsh near-term conditions in the U.S. solar market, Enphase still has a very clear growth runway. The company’s long-term growth drivers include higher electricity rates, climate change concerns, and rising EV adoption. Indeed, considering these factors alone, investors ought to agree there’s plenty of room for growth ahead.
If Enphase hits the higher end of its 2025 expectations, hitting a market cap of $170 billion is not out of reach. My personal price target here would be $300, which is far from 1,000% upside. But catalysts like further government subsidies can’t be ruled out entirely, and could boost this company’s stock price further.
Luminar Technologies (LAZR)
As a high-growth name, Luminar Technologies (NASDAQ:LAZR) looks compelling based on its leading position in the LiDAR market. LiDAR technology offers superior sensing capabilities over radar and cameras used in today’s autonomous vehicles. While many automakers previously balked at LiDAR’s high costs, rapid cost reductions have reopened the door to adoption.
In its latest quarter, LAZR grew revenue 63% annually to $16.2 million. The company’s order book expanded again in Q2, keeping it on track to meet its $1 billion growth target for 2023. Management also noted that automakers increasingly position Luminar LiDAR as a premium feature, choosing to actively market it to consumers. This underscores the significance of LAZR’s technology and its potential stickiness with end users.
On the product side, Luminar remains on schedule to begin series production of its Iris LiDAR by the end of 2022. Along with software deliverables and next-gen product development, this will position the company for a revenue hockey stick in 2024 and beyond as automakers launch Luminar-powered vehicles.
Despite the company’s high price-sales ratio, there is still room for a 1,000% upside once Luminar converts its multi-billion dollar order book into massive production revenue over the next two to three years.
Opera (OPRA)
I covered Opera Limited (NASDAQ:OPRA) in mid-July, warning that the stock could continue sliding lower. With OPRA stock down over 30% since then, my perception has now turned bullish. I believe the current entry point offers great short and long-term upside potential for this overlooked growth stock.
Opera recently reported Q2 earnings that beat on the top-line but missed on the bottom-line. Earnings per share came in at 15 cents, missing estimates by 2 cents. However, revenue of $94.13 million beat expectations by $2.47 million. Revenue grew nearly 21% year-over-year, representing the company’s 10th straight quarter of over 20% top-line expansion.
Importantly, Opera continued shifting its user base towards higher average revenue per user (ARPU) western markets, which now account for 15% of total users. As a result, annualized ARPU jumped 25% versus last year to $1.17. With western markets still highly underpenetrated for OPRA, significant room for ARPU growth remains ahead.
Management also highlighted exciting progress with Opera’s AI browser solutions, including Aria. Early data indicates clear lifts in engagement time and search queries from users, validating the big opportunity in AI. As the first browser to integrate a free, in-house developed AI solution, Opera One gives the company a key point of differentiation versus pre-installed browsers. This could significantly boost new user acquisition.
For all these reasons, I believe OPRA offers explosive upside from current levels. Analysts have a consensus price target of $22.50 over the next year, implying 62% upside. Obviously, this upside metric will move much higher if you’re investing over a multi-year period.
Acme Research (ACMR)
Acme Research (NASDAQ:ACMR) may seem risky to some investors given its exposure to China and Taiwan, which face ongoing geopolitical tensions. However, it’s important to remember ACMR stock still trades at a very reasonable forward price-earnings ratio of just 12-times. Geopolitical risks come part and parcel when investing in semiconductor stocks, even with Wall Street darlings like Nvidia (NASDAQ:NVDA). For Acme in particular, much of the China risk already appears to already be priced in by the market.
Meanwhile, ACMR continues executing well operationally. The company just posted record revenue and earnings per share, driven by robust demand trends. Revenue surged nearly 40% year-over-year to $144.6 million, handily beating estimates. Strength came from maturing node investment by ACMR’s China customers. The company also continues gaining market share and penetrating new products like its semi-critical cleaning tools.
With its breadth of cleaning tools and plating expertise, Acme has cemented its position as the top domestic supplier in China for cleaning tools and copper plating. It counts nearly every domestic semiconductor manufacturer as a customer. While China’s overall wafer fab equipment spending may moderate, ACMR sees ongoing investments in mature node capacity like 28nm and 45nm. This creates a multi-year tailwind as China intensifies efforts to boost domestic chip capabilities.
Acme has also made progress internationally, securing its first European evaluation order from a major manufacturer. It continues expanding facilities in China, Korea, and the U.S. to support global initiatives. With over 47% revenue CAGR over the past three years, ACMR has a proven track record of execution.
In my opinion, ACMR stock currently discounts the geopolitical overhang, with shares looking extremely inexpensive relative to growth prospects. If ACMR stock were to simply trade in line with peer multiples, shares could deliver tremendous upside. Gurufocus sees a $90 fair price tag by 2026, which is nothing to scoff at.
ZoomInfo (ZI)
ZoomInfo (NASDAQ:ZI) shares have steadily marched lower over the past year, mostly due to negative sentiment surrounding slowing growth in the near term and lingering valuation concerns. However, with the forward price-earnings multiple now down to just 18-times, much of the negativity looks priced in.
While revenue growth is expected to moderate to 8.8% next year from 12% this year, analysts see growth reaccelerating over the long run. Consensus estimates call for 16.3% growth in 2025 and 21.1% growth in 2026 as conditions improve.
Meanwhile, short interest and insider selling have declined substantially, indicating even bears may be losing conviction. Profitability also remains a bright spot, with ZoomInfo delivering 41% adjusted operating margins amid a choppy demand environment this past quarter.
With a data platform that enhances everything from CRM to marketing automation to AI, ZoomInfo provides mission-critical insights for go-to-market teams. Its ability to drive greater sales efficiency and ROI will only become more valuable if macro uncertainty drags on. While business confidence remains fragile for now, ZoomInfo has levers to pull, like simplifying SMB packaging and pricing to reaccelerate growth once conditions improve.
I believe ZI stock is poised for a major recovery rally. The recent quarter confirms ZoomInfo’s ability to drive efficiency gains and margin expansion even in challenging times. For long-term investors, shares offer compelling value.
UiPath (PATH)
This AI automation play has lagged behind the recent generative AI rally, likely because Wall Street remains fixated on AI’s potential for white-collar roles. However, robotics process automation seems better-positioned for the long haul, in my view. While AI threatens white-collar jobs like lawyers and accountants, blue-collar roles face even greater displacement risk looking out 5-10 years.
Perhaps in a twist of fate, AI and automation now endanger white-collar jobs first instead of the expected blue-collar factory workers. In any case, demand for “blue-collar AI” remains robust, evidenced by the still tight labor market and a booming housing sector that relies on physical construction work. UiPath provides the crucial software to make enterprise-scale automation work efficiently.
UiPath’s (NYSE:PATH) growth trajectory has certainly moderated due to the choppy macro environment. However, the massive opportunity this stock provides is still in its early innings. With margins and cash flow inflecting higher, UiPath has levers to reaccelerate growth through initiatives like its recent Salesforce (NYSE:CRM) partnership. The company still delivered 28% ARR growth last quarter despite demand headwinds.
With advanced capabilities like process mining and document understanding beyond basic RPA, UiPath provides the full automation toolkit enterprises need. While uncertainty persists in the near term, PATH stock could deliver plenty of upside over the next five years as enterprises infuse AI and automation across operations. For investors with patience, PATH stock offers compelling value in the world of AI automation.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
