Hold on to these under-$10 stocks as they gear up for a wild ride in the next two years
Amidst the current market uncertainty, some companies stand out in their respective industries. The companies discussed here have the potential for massive growth and have already established themselves in the sector. While the stocks are trading under $10, it by no means speaks about its potential to grow. I think they are the best under-$10 stocks to buy now.
Whether you are a beginner and only getting started in the stock market, or a professional with many years of experience, these three under $10 stocks could be solid bets and generate massive returns by 2026. They are well-positioned in the industry and have reported strong financials.
Do not judge the company by the stock price, instead, bet on the company’s business structure, financials, and cutting-edge technology. Let’s take a look at the three under-$10 stocks to buy now.
SoFi Technologies (SOFI)
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I have been writing about the fintech player SoFi Technologies (NASDAQ:SOFI) for a while now. As one of the strongest players in the industry right now, SoFi is giving strong competition to traditional banks and has offered an ideal solution to the younger demographic who is always looking for ways to save, invest, borrow and pay online.
The company reported its first-ever quarterly profit and saw strong revenue growth. It has seen a steady rise in users and products which has helped achieve profitability. Despite the strong financials, SoFi stock hasn’t moved much and is trading for $7 today. It is down 26% year-to-date and has been moving sideways since March.
The upcoming quarterly results could give the stock a much-needed push and we could see it move towards $10. There is a strong demand for its lending products and the segment saw a 24% year-over-year rise in the fourth quarter to reach $1.6 million.
It ended the year with 7.5 million members, up 44% YOY. The market is concerned about the future of SoFi after the hotter-than-expected inflation report. However, even if the interest rate cut is pushed back by a few more months, I think SoFi can survive.
Even in a high-interest rate environment, the company managed to achieve user growth. It can attract customers to different products and expects to see 50% growth in the financial services segment this year.
The company is steadily growing its market share with solid technology, low operating costs, and an advanced platform. While it will continue to focus on the lending segment for growth, its deposits have also shown impressive growth. SOFI stock is worth buying and holding on to for the long term.
Lithium Americas (LAC)
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It is too early to write off the beaten-down Lithium Americas (NYSE:LAC) stock. Renewable energy stock LAC could become a huge market player over the next four years. Its Thacker Pass project has the country’s largest lithium resource and this asset could generate massive cash for the company. It has a net present value of $5.7 billion, a mine life of 40 years and will begin construction in 2027.
The U.S. Government has lent $2.26 billion to the company as a federal loan to help with the production at the Thacker Pass. Lithium is going to become a hot property in this decade and investing in LAC right now will mean strong gains. However, do not expect the stock to move higher anytime soon.
Trading at $5 today, the stock has lost 16% value in the year and is down 18% YTD. The prospects of interest rate cuts seem attractive and could give a boost to the electric vehicle industry in the second half of the year. This will lead to a higher lithium demand. LAC is one of the best under-$10 stocks to buy now.
General Motors (NYSE:GM) has already invested $650 million in Lithium Americas which is also the largest ever investment by an automaker for the production of battery raw materials. The stock is a long-term play but we will have to wait until the Thacker Pass commences production to see strong fundamentals. However, buying the stock below $10 could be one of the best decisions you make.
XPeng (XPEV)
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Electric vehicle maker Xpeng (NYSE:XPEV) stock has gone from a high of $64 in 2020 to $7 today. The road hasn’t been smooth and the journey has been tough but XPeng is not the one to give up. Despite the massive competition in the EV industry, XPeng is making moves and delivering strong numbers. Down 48% YTD, the stock has dropped due to the modest EV demand and the high-interest environment.
However, its March delivery numbers impressed investors. The company reported 9,026 vehicle deliveries in the month, up 99% month-over-month and 29% YOY. Overall, in the first quarter, it delivered 21,821 cars, up 20% YOY. It has successfully managed to achieve the quarterly delivery target.
That said, the company also announced partnerships with car dealers in Singapore, Malaysia and Thailand for the launch of its G6 model. XPeng has ambitious goals of launching 30 new, or refreshed models over the next three years. To expand its global market share, the company also made its entry into the German market with two EV models. As compared to its competitor Nio (NYSE:NIO), XPeng is showing strength in an uncertain market environment.
It is aiming for expansion into other European markets this year and expanding out of China could work in favor of the company. It wants to breakeven by 2026 and an improvement in the EV sector can make it possible. The future of transportation is electric and the demand for EVs will eventually pick up, this is when we could see the XPEV stock rally. If you are looking for stocks to buy now for under $10, start here.
On the date of publication, Vandita Jadeja did not hold (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.
