In the grand scheme of investment strategies, high-risk, high-reward stocks offer a certain charm. However, if investors succumb to a lack of understanding of the inherent risk, they can be caught off guard by a market downturn.
The key to owning these volatile stocks is not simply the thrill of potential significant gains but a comprehension of one’s risk tolerance. Hence, weathering the storms of potential losses on your adventurous journey toward accumulating wealth is imperative.
It’s vitally important to allocate only a small slice of your portfolio to this endeavor. Too many investors, lured by the siren song of quick returns, will dive head-first into high potential stocks, overloading their portfolios with risk.
Just remember that while the rewards can be dazzling, the risks can prove perilous. So buckle up and enjoy the ride.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) continues to wow investors with its robust performance in the clean energy space. It has ingeniously carved out a niche in solar micro-inverters, energy storage, and EV charging stations, establishing its presence as a sustainable energy juggernaut.
The first quarter saw sales soaring to a magnificent $726 million, up from $441 million in the first quarter of 2022. Simultaneously, net income surged to a solid $147 million, marking a substantial increase from $52 million in the previous year. These results align with its rock-solid growth pattern over the past several years. Enphase Energy has also ventured into the hugely profitable EV industry with its Level 2 and 3 chargers for residential use.
However, the stock has recently dipped due to concerns over a slowdown in residential solar demand. Nevertheless, with a beta value of roughly 1.5, the stock has the potential to generate above-average returns once the markets improve.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) often tops the list of most-trending stocks, and its relevance has been amplified more than ever following the doubling of its stock value this year. Driven by the surging demand for EVs, Tesla remains the most prominent front-runner in the market, setting the pace in this proliferating niche.
Tesla doesn’t stop at EVs. It’s made its mark as a premier manufacturer of lithium-ion batteries. This tech prowess not only fortifies Tesla’s standing in the EV landscape but also paves the way for its inroad into other energy-centric markets, broadening its long-term horizons. The brand’s unwavering commitment to innovation in EV autonomy, self-driving technology, and cost efficiency fuels its success.
The first quarter of 2023 saw the company delivering robust profitability results. It flaunted an operating margin of 11.4%, a testament to its efficient cost management and incredible operational performance. Moreover, despite the market headwinds, It reported a GAAP operating income of $2.7 billion and a net income of $2.5 billion. Also, Tesla has been hitting it out of the park operationally, with the Model Y crowned as the best-selling vehicle in Europe and the U.S., excluding pickup trucks, in the first quarter.
Block (SQ)mul
Block (NYSE:SQ) is blazing trails in the fintech world, boasting an enviable growth trajectory that’s hard to ignore. The firm’s ambitious goal of maintaining gross profit retention above 100% offers investors a glimpse into a future marked by rock-solid profitability and expansion.
It is focusing its efforts on three pivotal tech trends – artificial intelligence, open protocols, and emerging economies. Its strategic focus on burgeoning markets in the Global, coupled with the growing embrace of open protocols and AI, points to massive long-term future growth.
Furthermore, though its crypto efforts proved to be a bane last year, the recent surge in Bitcoin prices allowed the firm to post relatively strong results in the first quarter. It posted a striking 18% surge in BTC revenue compared to the previous quarter. Further underscoring this success, the company marked a substantial 25% year-on-year increase in BTC sales, ringing in a colossal $2.16 billion.
On the date of publication, Muslim Farooque 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