/Technology%20-%20marvin-meyer-SYTO3xs06fU-unsplash.jpg)
The euphoria around widespread adoption of artificial intelligence (AI) has propelled tech stocks higher this year, with industry standouts like Nvidia (NVDA) (up 199% YTD), Google (GOOGL) (up 52.7% YTD), and Amazon (AMZN) (up 50.5% YTD) all outperforming the broader market by a wide margin. Overall, after a rough finish to 2022, the Nasdaq Composite ($NASX) is up just over 26% in 2023 so far.
On the other hand, quite a few growth names that helped lead the first-half rally this year have taken a serious haircut during the sell-off that has gripped markets in recent months. As stocks attempt to find their footing after September's heavy selling, here's a look at 5 standout growth stocks under $10 that analysts think have major upside potential from current levels.
Farfetch
Founded in 2007, Farfetch (FTCH) is an online fashion retail platform that sells products from several hundred brands, boutiques and department stores from around the world. The company offers a wide range of products, including clothing, shoes, accessories, and watches, and commands a market cap of $754.1 million.
Shares of the company are down 60% so far in 2023, and trade below $2 per share.
Farfetch is yet to be profitable, but its losses have come in narrower than the consensus estimate in four out of the past five quarters. Moreover, the company's forward revenue growth forecast of 11.31% is more than double the sector median.
Overall, analysts remain optimistic about the stock, with a “Moderate Buy” rating and a mean target price of $6.36. This denotes a massive upside potential of about 238% from current levels. Out of 14 analysts covering the stock, 5 have a “Strong Buy” rating, 8 have a “Hold” rating and 1 has a “Strong Sell” rating.
Luminar Technologies
A developer of lidar technology, Luminar Technologies (LAZR) sells lidar sensors, software, and associated services for autonomous vehicles and other applications. Its customers include Volvo, Daimler and Nvidia. The company's software is used to process lidar data and generate a real-time 3D map of the surrounding environment. LAZR's current market cap stands at $1.66 billion.
Shares of Luminar have declined 13.5% on a YTD basis.
Just like Farfetch, Luminar is not profitable yet. Moreover, its losses have come in wider than the consensus estimates for four out of the past five quarters.
However, Luminar boasts year-over-year revenue growth of 47.18%, compared to a sector median of 6.74%, with forward revenue growth pegged at 97.39% - well above the sector median of 5.80%.
Analysts have assigned LAZR an overall rating of “Moderate Buy” with a mean target price of $11.64. This indicates an upside potential of roughly 172.5% from current levels. Out of 10 analysts covering the stock, 6 have a “Strong Buy” rating, 3 have a “Hold” rating, and 1 has a “Strong Sell” rating.
Stem Inc
Established in 2009 and headquartered in Millbrae, Calif., Stem (STEM) is a clean energy technology company that provides AI-driven energy storage and software solutions. Stem's energy storage systems use batteries to store excess renewable energy, such as solar and wind power. This energy can then be used to power buildings and businesses during peak demand periods, or when renewable energy sources are not available. Its market cap currently stands at $574.9 million.
Shares of the company have been on a sharp downward spiral in 2023, correcting nearly 60% YTD.
Stem is unprofitable as of yet, but has reported strong revenue growth of nearly 107% year over year, with 86.6% forward revenue growth projected. Both figures are well above sector medians.
Overall, analysts have assigned a “Moderate Buy” rating with a mean target price of $9.36. This points towards an upside potential of about 158% from current levels. Out of 15 analysts covering the stock, 7 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, 6 has a “Hold” rating, and 1 has a “Moderate Sell” rating.
Indie Semiconductor
Founded in 2016, Indie Semiconductor (INDI) is a fabless semiconductor company that designs, develops, and markets power management and analogue integrated circuits for the automotive, industrial, and consumer markets. The company's mission is to develop innovative power management and analogue ICs that enable its customers to build more efficient and reliable products.
Shares of Indie, which currently commands a market cap of just under $1 billion, have shed less than 2% in 2023 so far.
Yet to be profitable, Indie Semiconductor has managed year-over-year revenue growth of 97.29%, with forward revenue growth expected at 95.33% - well above sector medians for both metrics in the range of 9.25%.
Analysts remain bullish about the company overall, handing out a unanimous “Strong Buy” rating and a mean target price of $13.92. This denotes an upside potential of roughly 143% from current levels.
NerdWallet
We round out our list with personal finance company NerdWallet (NRDS), founded in 2009 by Tim Chen and Jacob Gibson. It provides consumers with free tools and resources to help them make informed financial decisions.
Commanding a market cap of $637.3 million, NerdWallet stock has dipped 15% in 2023 so far.
Listed in November 2021, the company has swung between small losses and profits over the past year. However, NerdWallet has surpassed analysts' bottom-line estimates in three of the past four quarters.
Looking ahead, forward revenue growth is pegged at 20.69% - well beyond the sector median of 5.43%.
Analysts remain upbeat about NRDS, which has a “Strong Buy” rating and a mean target price of $16.86. This indicates an upside potential of roughly 108.4% from current levels. Out of seven analysts covering the stock, 5 have a “Strong Buy” rating and 2 have a “Hold” rating.
