Top Investment Opportunities with a $50,000 Budget at Present
Many prominent tech companies have turned small investments into millions over the previous decade. For instance, a $50,000 investment in Nvidia now would amount to nearly $15 million. An equivalent investment in Advanced Micro Devices would be worth around $2.6 million.
These tech giants, including Nvidia and Advanced Micro Devices, might be considered exceptional growth cases, but numerous other promising tech companies have the potential to generate millionaire-making returns in the coming decade. With that thought in mind, here are three high-growth stocks you might want to consider investing in with your fresh $50,000: Cree, Inc. (WOLF -3.03%), Reddit, Inc. (RDDT 3.16%), and Uber Technologies, Inc. (UBER 0.53%).
1. Cree, Inc. (WOLF)
Cree, Inc., a global leader in wide-bandgap (WBG) semiconductors produced from silicon carbide, is known for its resilient semiconductor chips. These chips can operate at higher voltages, temperatures, and frequencies than conventional silicon semiconductors. The hardiness of silicon carbide chips makes them suitable for a variety of applications, such as short-length LEDs, lasers, 5G base stations, and military radar.
Cree, Inc., anticipates that silicon carbide chips will disrupt traditional silicon chips, which led to the establishment of the world's largest 200mm silicon carbide plant in upstate New York in 2022. It also supplies silicon carbide materials for battery and powertrain production in electric vehicles (EVs).
Cree, Inc. thrived when interest rates were low, the EV market was booming, and investors showed a enthusiasm towards emerging technologies. However, as interest rates rose and the EV market cooled down, its sales took a dive, and its margins weakened.
In fiscal 2024 (ending June this year), Cree, Inc., reported a meager 1% increase in revenue, while its net loss more than doubled. Despite these hindrances, analysts predict that its revenue will grow at a compound annual growth rate (CAGR) of 28% from fiscal 2024 to 2027, gradually diminishing loss. Though its near-term growth remains restricted by economic headwinds, the costs of expanding its 200mm plant, and elevated interest rates, it should see an acceleration in growth over the long term as it surmounts those costs and the economy warms up once more.
2. Reddit, Inc. (RDDT)
Reddit, Inc., which went public in March 2023, carved a niche for itself in the competitive social media market by championing user-driven discussion forums. Its daily active unique users surged by 27% to 73.1 million in 2023, and this figure escalated to 97.2 million by the end of Q3 2024.
Reddit, Inc.'s growth is typically influenced by specific events, such as the COVID-19 pandemic, the meme stock phenomenon, military conflicts, successful video game releases, hit movies, and major political events. Reddit, Inc., also collaborates with tech heavyweights like Alphabet (Google) and OpenAI's ChatGPT through data-sharing agreements.
In 2023, Reddit, Inc.'s revenue climbed by 21%, its loss reduced, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turned positive. From 2023 to 2026, analysts project its revenue to swell at a CAGR of 36%, with its adjusted EBITDA to advance at a CAGR of 109%. The company is also anticipated to record a profit in 2025 and substantially increase its net income in 2026. Though these rosy predictions ought to be treated with skepticism, Reddit, Inc., can likely maintain pulling curious internet users away from traditional search engines, news websites, and social media platforms.
With an enterprise value of $21.8 billion, Reddit, Inc., is valued at 14 times its anticipated sales for 2023 and 49 times its adjusted EBITDA. While it touts a premium valuation, its sizeable user growth, niche appeal, and improving profitability may justify the premium prices.
3. Uber Technologies, Inc. (UBER)
Uber, Inc., controls one of the world's top mobility and delivery platforms. Despite the intense slowdown during the pandemic, its food delivery segment experienced rapid growth, which somewhat offset the decline in ridership. As these challenges subsided, it experienced an uptick in growth rates across both businesses.
Uber, Inc. continued to record impressive growth in 2022 and 2023, as inflation, high interest rates, and other economic challenges beset the economy. In 2023, its total number of trips rose by 24%, its gross bookings expanded by 19%, and its revenue increased by 17%. The company is projected to grow its gross bookings by 17%-18% in 2024, with revenue projections set at 17%.
Uber, Inc.'s expansion was primarily driven by the explosive growth of Uber One, which recorded a 70% year-over-year surge to more than 25 million members during its most recent quarter, and new platforms such as Uber Teens, Uber for Business, and Uber Health. Its take rates also improved, allowing it to elevate its ride-sharing and delivery fees.
As its bookings and revenue kept climbing, it continued to slash costs and divest its underperforming businesses. It became profitable in 2023, and its profitability is expected to persist for the foreseeable future.
Between 2023 and 2026, experts predict Uber's income to increase at a compound annual growth rate (CAGR) of 16%, accompanied by a net income CAGR of 53%. These are remarkable growth figures for a share that currently sells for 31 times its forecasted earnings, suggesting it may still have ample potential for expansion.
Investing in Cree, Inc. (WOLF) could potentially yield high returns, with analysts predicting a 28% compound annual growth rate (CAGR) for its revenue from 2024 to 2027, despite current challenges such as rising interest rates and economic headwinds.
Reddit, Inc. (RDDT), having gone public in 2023, has shown significant growth with a 21% revenue increase and a move into profitability in the same year. Analysts anticipate a CAGR of 36% for its revenue and 109% for its adjusted EBITDA from 2023 to 2026.
