Due to a combination of worries about high-interest rates, China’s decision to prevent some government employees from using Apple’s (NASDAQ:AAPL) iPhones at work, and the fact that September is historically a very bad month for equities. many high-risk, high-reward stocks have taken a beating recently.
But, as I’ve written in past columns, the Fed is done or almost done increasing interest rates and looks poised to cut them sooner than many expect. Meanwhile, China is unlikely to take harsh actions against American companies, since the U.S. and Beijing have had multiple high-level bilateral meetings recently and seem to be intent on getting along well.
And finally, September will be over in a few weeks. With that said, here are three high-risk, high-reward stocks to buy now ahead of the rally that the stock market will likely undergo next quarter.
EVgo (EVGO)
EVgo (NASDAQ:EVGO), which owns and operates electric-vehicle chargers in the U.S., was sinking 4% and not far from its 52-week low of $3.45 on the afternoon of Sept. 7.
The retreat came after one of EVgo’s competitors, ChargePoint (NYSE:CHPT), reported weaker-than-expected second-quarter results on Sept. 7, as its top line came in $2.3 million below analysts’ average estimate and its loss per share was 35 cents, versus analysts’ mean estimate of a loss per share of 21 cents. But CHPT’s revenue still jumped 39% versus the same period a year earlier. Further, the company reiterated its intention to generate positive EBITDA, excluding some items, in the fourth quarter of next year.
Additionally, next year, hundreds of EV charging stations paid for by the federal government and operated by EVgo should launch. As I noted in a past column, EVgo announced in July that it was selected by Ohio to operate 20 such fast charging stations. And other states are starting to make plans to pay for such chargers as well, giving EVGO the opportunity to obtain many additional, revenue-generating chargers in 2024.
I believe that the current $1.12 billion market capitalization of EVGO stock far undervalues the company’s long-term potential, making it one of the best high-risk, high-reward stocks to buy now.
Bionano (BNGO)
Bionano (NASDAQ:BNGO) continues to rack up impressive achievements. Most recently, the company announced that, according to a study, its optical genome mapping system (OGM) could effectively be used as a means of checking “CRISPR-Cas9 edited human induced pluripotent stem cell (iPSC) lines” for significant defects in the lines.
In July, research firm Coherent Market Insights estimated that the “global CRISPR technology market” would grow at a compound annual rate of 19% between 2022 and 2030 and reach $7.7 billion in the latter year.
Since OGM is generally faster, easier, and more accurate than competing methods of evaluating DNA, Bionano could generate a great deal of revenue from selling its OGM systems to companies that develop CRISPR-based therapies.
And as I’ve noted in past columns, BNGO is well-positioned to convince insurers to cover its OGM systems.
I believe that the current $120 million market capitalization of BNGO stock far undervalues the company’s long-term potential.
Rivian (RIVN)
Electric vehicle maker Rivian (NASDAQ:RIVN) is moving beyond pickup trucks, as it’s adding much more affordable SUVs to its repertoire.
I believe the SUVs, which will cost between $40,000 and $60,000, will be a game changer for the company as there is reportedly significantly less competition in the electric SUV space than in the electric pickup market. And importantly, of course, many more consumers can afford to pay between $40,000 and $60,000 for an SUV than those who can afford between $84,000 and a bit over $100,000 for a pickup. Therefore, RIVN should be able to eventually sell many more SUVs than pickups.
Also noteworthy is that the automaker’s new Enduro drive unit should enable it to boost its production rate and lower its costs while the automaker continues to churn out thousands of delivery vans for Amazon (NASDAQ:AMZN).
On the date of publication, Larry Ramer held LONG positions in BNGO, EVGO, and RIVN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
