Investors are always on the lookout for success stories of individuals who turned a small investment into a fortune. Some lucky investors achieved this through companies like Home Depot and Tesla. For those who want to find the next big winner early on, it is crucial to identify companies that are disrupting existing industries or creating new business lines. While it is difficult to predict such moves with certainty, there are a few stocks with low nominal prices that hold potential for investors with a budget of $3,000, such as Palantir, SoFi, and Upstart.
Palantir, known for its AI-driven analytical insights, has gained prominence in the defense and commercial sectors. The company’s artificial intelligence platform, or AIP, has shown impressive productivity gains, with customers achieving more in a day than in several months. These results give Palantir significant pricing power over time. While the financials may not reflect these results yet, with only a trial version of AIP available, the company’s revenue for the first nine months of 2023 increased by 16% compared to the previous year. Additionally, Palantir’s net income of $120 million during this period is a vast improvement from the $405 million loss in the same timeframe last year. Despite a high price-to-sales (P/S) ratio of 21, the power of Palantir’s AIP software suggests that its shares could continue to rise.
SoFi, a student lender, demonstrated remarkable adaptability during the pandemic by expanding into banking and fintech. Through acquisitions like Golden Pacific Bancorp, Galileo, and Technisys, SoFi gained competitive advantages and increased its customer base. In the first nine months of 2023, the company’s revenue surged by 35%, although expenses also rose, resulting in a net loss of $349 million. Nevertheless, SoFi’s stock has risen almost 50% this year, and with a P/S ratio of just over 3, it appears to be a bargain. As customers continue to flock to this digital bank, the growth trajectory is expected to continue.
Upstart, an AI-based loan evaluation tool, aims to disrupt the credit industry by replacing the traditional FICO score. With an annual loan origination of over $4 trillion, the potential for growth is enormous. While Upstart initially focused on evaluating personal loans, it is expanding into other areas such as car loans, small businesses, and home equity lines of credit. However, the company has faced challenges due to rising interest rates, resulting in negative revenue growth and increased losses. In the first nine months of 2023, revenue dropped by 46% compared to the previous year, and the loss increased from $53 million to $198 million. Despite these setbacks, Upstart remains well-positioned to capitalize on the credit industry’s adoption of AI-based scoring. With a P/S ratio of 4, it presents an attractive opportunity for growth investors.
In conclusion, investors looking for the next big winner should consider stocks like Palantir, SoFi, and Upstart. While each company has its unique growth story and challenges, they offer potential for significant returns. However, it is important to note that investing in individual stocks carries risks, and thorough research and analysis are essential before making any investment decisions.
