Investing in High-Growth Stocks Amid Market Peaks
Even with the S&P 500 index nearing record highs, you might think it’s not the best moment to dive into speculative, high-growth stocks. However, the majority of the index’s advances have come from a handful of major tech companies. This focus leaves many promising stocks off the radar.
If you look beyond the so-called Magnificent Seven, there are several high-growth options that could offer significant returns. Let’s delve into two such stocks—Nioh and AST Space Mobile—to see why they might be worth considering in this buoyant market.
Nioh
Nio, recognized as a leading electric vehicle (EV) manufacturer in China, boasts a diverse lineup of electric sedans and SUVs. They are also tapping into the budget segment with less expensive SUVs and compact cars through their sub-brands Onvo and Firefly. A unique selling point for Nio is their battery-swapping technology, which allows users to quickly replace depleted batteries at over 3,500 stations. The company is also looking to expand into Europe, aiming to lessen its reliance on China’s crowded EV market.
Nio achieved impressive gains in vehicle deliveries, more than doubling its figures in 2020 and 2021, before growing 34% in 2022, 31% this year, and projecting a 39% increase in 2024, reaching 221,970 vehicles. Expectations for 2025 predict a 58% surge in sales of their premium ET Series sedans, potentially moving to 351,221 units. Interestingly, Nio aims to post a profit for the first time in Q4 of 2025.
Analysts have forecasted Nio’s revenue to grow at an annual rate of around 30% between 2024 and 2027. This is an attractive outlook for a stock currently trading at less than one times its sales for this year.
At present, Nio’s valuation appears to be under pressure from broader economic challenges in China, ongoing U.S.-China trade tensions, and worries regarding a slowing EV market. Yet, should Nio navigate these obstacles successfully, increase its foothold in China, and continue its ambitious expansion, the stock could very well see a surge toward new highs.
AST Space Mobile
AST is engaged in the creation of low Earth orbit (LEO) satellites designed to provide 2G, 4G, and 5G cellular signals straight to smartphones and various mobile devices. These innovations aim to assist telecommunications companies in extending their reach to rural regions that struggle with cell tower coverage.
The satellites specifically utilize a low- to mid-band spectrum, which results in lower speeds but offers greater coverage compared to the high-band spectrum deployed by competitors like SpaceX’s Starlink. AST has already partnered with significant players such as AT&T, Verizon, Vodafone, and Rakuten to bolster its 5G satellite network. Recently, it was selected as a primary contractor for a program under the U.S. Missile Defense Agency, hinting at a potential for further government contracts.
This year marked the launch of the first five Block 1 BlueBird (BB1) satellites, and in December, they sent up their initial four Block 2 BlueBird (BB2) satellites, which are considerably larger and equipped to handle more data.
AST has set a goal of having between 45 and 60 satellites in orbit by the end of 2026, with ambitions to expand to 243 in the coming years, pending necessary approvals. Analysts anticipate AST’s revenue might skyrocket from merely $4 million to $699 million from 2024 to 2027 as more satellites come online, with profitability expected by the end of that period. Although AST’s stock appears pricey at 34 times anticipated 2027 sales, the company has considerable growth potential as the LEO satellite sector continues to evolve.
