Have you thought about what you want to achieve by investing in stocks? A secondary income, quick returns, or wealth creation? What you seek will determine where you invest. If you want to earn mind-blowing returns from your investments a few years from now, you should consider investing in a high-growth stock.
A high-growth stock you’ll wish you’d bought 11 to 30 years ago
Look at Nvidia (NASDAQ: NVDA), founded in 1993 to bring graphics-based processing to accelerated computing when Intel’s central processing was unbeatable. Nvidia’s market was niche as gaming was the one area with computational challenges. 30 years went by, and a US$10,000 investment in Nvidia’s initial public offering in 1999 is now US$27.9 million.
It is a stock you wish your parents had bought in 1999 or you bought in 2013 when the craze of PC games picked up. A $10,000 investment in 2013 would be $3.76 million.
While you can’t go back in time and invest in Nvidia, you can look at the traits it showed for future growth and leadership in a pressing issue.
- Nvidia was focused on strengthening its core technology of graphics processing unit (GPU).
- It did not invest simultaneously in several markets but concentrated on perfecting itself in gaming. The outcome: it became an unbeatable leader.
- Perfecting gaming took years. And once it mastered this vertical, it moved on to the next vertical: data centres.
- While it diverted most resources to key focus areas, it simultaneously spent on research and development in other areas.
- And the most important trait of Nvidia is its approach to solving future problems.
Take some time and think. Almost all millionaire-maker stocks, especially tech stocks, such as Google, Tesla, Microsoft, Amazon and more, have similar traits.
A high-growth stock you’ll wish you bought today
Which stock has the traits of the 2013 Nvidia? Ballard Power Systems (TSX: BLDP). It is a world leader in proton exchange membrane (PEM) fuel cells. This fuel cell uses hydrogen to run buses, trucks, ships, rail, marine, and stationary (as an electricity storage).
Ballard Power Systems is looking to solve the problem of a low-cost, green alternative to transportation that can replace fossil fuel and give energy security. While the green transportation problem is not yet getting the attention it needs, it will become a necessity by 2030 and 2050.
Ballard Power Systems is perfecting its technology on heavy-duty mobility as they have high utilization, long driving range, heavy payload, and fast refuelling. The biggest challenge with a hydrogen fuel cell is refuelling infrastructure. Heavy-duty vehicles return to the depot and have centralized refuelling, reducing the need for a distributed refuelling network.
It has diverted major resources in Canada, Europe, and the United States that have supportive government policies and existing and potential partner, customer, and end-user relationships. It knows these markets have a higher adoption rate for its hydrogen fuel cells.
It is currently spending on research and product development to rationalize its product portfolio and reduce costs. Its capital spending is on advanced manufacturing technology and capacity expansion.
When can Ballard Power Systems stock start generating returns?
Ballard Power Systems has everything it takes to be a future leader. The company has started receiving orders from the industry, hinting that commercial adoption has begun. The PEM fuel cell is a revenue-generating technology, and Ballard Power System has its patent. It has an order backlog of approximately US$180.5 million as of March 31, 2024.
Ballard Power System is still struggling to make the technology cost efficient, because of which it is reporting a negative gross profit. A few years from now, when the energy industry reaches an inflection point, the stock could see a 2013 Nvidia moment.
Today, Ballard Power System stock trades at $4.1. A government subsidy and a green energy bill could spike hydrogen fuel cell adoption and generate triple-digit returns. It is a stock worth investing $10,000 on. Maybe 10-15 years from now, you could be a millionaire.
