All investors are looking for big profits. We all dream of finding a small company that will eventually change the world and make our early shareholders millionaires. But how can you identify the next “big thing” before it explodes in value? This task is easier said than done, but with a little luck and smart stock picking, you can make it big. Getting a winner is also not out of the realm of possibility.
If you have a portion of your portfolio allocated to high-risk, high-return investments, it makes sense to target blue-chip small-cap tech stocks that have the potential to deliver multiple returns when the next hype cycle arrives. It's good. See how AI stocks have soared over the past year. The next hype cycle is likely to revolve around another emerging technology that sends related stocks soaring.
To have a chance of capturing these winners, you should invest aggressively in the more speculative, small-cap stocks in the technology sector. This investment strategy naturally comes with a lot of risk, as many of these companies ultimately fail. But the select few that are identified early will ultimately be the big winners.
With that in mind, let's take a look at these three stocks.
Righetti Computing (RGTI)
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Quantum computing is an emerging technology that I believe will drive the next big hype cycle in the technology industry. As semiconductors continue to shrink and AI models become more sophisticated, they will require significant advances in computing power that traditional silicon chips cannot deliver. This is where quantum computers come into play. In theory, it can perform calculations exponentially faster than a classical computer.
righetti computing (NASDAQ:RGTI) is one of the most promising startups aiming to commercialize quantum computing. The company develops quantum integrated circuits and operates the quantum cloud platform Forest. In particular, Rigetti has strong technology and doesn't face the extreme cash burn problems common to quantum startups. Analysts expect Righetti's revenue to jump from $16.1 million in 2024 to $100 million by 2027. Additionally, the company's three-year revenue growth rate was 147.5%, which is higher than 99.5% of its peers.
With little dilution risk and rapidly growing revenues, Righetti has the potential to become a multibagger if quantum computing becomes mainstream. This new technology could drive the next big hype cycle in the technology industry. When that happens, Righetti, as a leader in the pure quantum field, should be one of the biggest beneficiaries. I believe this stock offers asymmetric upside that fully justifies the risk inherent in its small size today.
Nano Dimension (NNDM)
Another area worth considering is 3D printing. In fact, 3D printing is already common for basic plastic and carbon fiber models. However, challenges remain in printing functional electronics.Here is nano dimension (NASDAQ:NNDMThe company specializes in additive manufacturing electronics (Candy), an in-house process for 3D printed circuit boards and electronic devices.
As 3D printing becomes more advanced, I predict there will be a lot of hype around electronic printing capabilities. Nano Dimension is one of the leading companies in this niche, and its core business is steadily expanding. The company's revenue in 2023 amounted to $56.3 million, an increase of 29% over the previous year. Nanodimension is also cutting costs and expects to break even within 24 months. Analysts are targeting savings of $30 million per year, up from $25 million per year starting in the first quarter of 2024, and Nanodimension expects him to achieve positive free cash flow in 2025.
The company's path to profitability looks promising as both revenue growth and cost reductions begin. This makes NNDM stock a solid speculative buy in my opinion.
Brainchip Holdings (BRCHF)
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Brain-computer interfaces are one of the most exciting frontiers in technology today. From his headline-grabbing Neuralink brain chip implant to his AR/VR headset, the field is full of potentially disruptive applications. While mass adoption is still decades away, I think the hype cycle around consumer brain computing could start much sooner.
One of the lesser-known acts is Brainchip Holdings (OTCMKTS:BRCHF) is an Australian company specializing in neuromorphic AI chips and IP. As the first commercial producer of this hardware, BrainChip is giving investors a first-hand experience with brain-inspired computing. The stock is highly speculative, with a modest market cap of $428 million and no earnings. But if brain chips become more widespread, the long-term upside potential for this stock could be enormous.
Brainchips themselves are probably a decade away from becoming mainstream, but the hype cycle should start much sooner. BrainChip is at the forefront of this emerging trend with its leadership in neuromorphic AI. Additionally, the company's chips could be of interest to many AI companies because they reduce dependence on large data centers by keeping machine learning local to the chip. I believe BrainChip has the potential to become a multibagger in the long run. As brain computing gains traction, this first mover's small market cap could rise dramatically over time.
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Read more: Penny stocks — How to make money without getting scammed
On the date of publication, Omor Ibne Ehsan did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
