The stock market offers several opportunities to turn modest investments into fortunes, provided investors make strategic picks.
Although, like any investment, stocks are subject to volatility and external factors, some equities stand out for their potential growth due to strong underlying fundamentals.
In this regard, Finbold has identified two equities currently available cheaply that can potentially deliver six-figure returns within the next five years.
Picks for you
Lucid Motors (NASDAQ: LCID)
Lucid Motors (NASDAQ: LCID) has undoubtedly struggled to keep up with competition in the electric vehicle (EV) space, particularly from players like Tesla (NASDAQ: TSLA).
However, despite challenges such as supply chain issues, the company’s roadmap makes it a promising investment.
A key part of Lucid’s potential lies in its standout product, the Lucid Air sedan, known for its range and advanced technology. Furthermore, partnerships such as Aston Martin’s adoption of Lucid’s motors and batteries highlight its growth potential.
The company is also expanding its lineup, with the Gravity SUV emerging as one of the most anticipated products. By 2026, it plans to launch a midsize platform, potentially broadening its market reach.
Additionally, Lucid benefits from significant financial backing from Saudi Arabia’s Public Investment Fund (PIF), providing the company with a cash runway through 2026. Lucid’s ties to Saudi Arabia’s economic diversification strategy further solidify its financial foundation.
From a financial perspective, Lucid reported $200 million in revenue for Q3 2024, slightly above analysts’ expectations of $198 million—a 45.2% increase from the same quarter in 2023.
Projections suggest continued growth, with analysts estimating $209.3 million in Q4 2024 revenue, a 33% year-over-year increase. Forecasts for Q1 2025 point to a 46% rise, reaching $252.18 million.
Analysts project revenue of $780.28 million in 2024, a 31% increase from 2023. Revenue is expected to soar 117% by 2025, hitting $1.7 billion.
Despite setbacks in 2024, such as supply chain delays in Q4, Lucid produced 3,386 vehicles and delivered 3,099. For the full year, it produced 9,029 vehicles and delivered 10,241, surpassing its annual guidance for the first time since 2022.
Lucid’s growth trajectory also faces potential headwinds, including operational challenges and concerns about over-reliance on the Saudi government.
The Donald Trump administration’s potential rollback of EV tax credits could also impact sales. However, Lucid CEO Peter Rawlinson has expressed confidence that the company is resilient to regulatory changes.
As of the last trading session, LCID was trading at $2.79, up 2.5% for the day but down nearly 8% year-to-date. Amid this volatility, the stock’s key resistance levels are at $5 and $10.
SoundHound AI (NASDAQ: SOUN)
Given the recent surge in artificial intelligence (AI) stocks and the sector’s projected growth, SoundHound AI (NASDAQ: SOUN) stands out as a promising bet.
Specializing in voice AI and speech recognition technology, the company, currently trading below $100, offers an attractive option for investing in emerging AI technologies. SoundHound AI experienced significant growth in the past year, rallying about 750%.
With operations spanning diverse industries such as automotive, hospitality, and restaurants, SoundHound AI has built a strong client base, including notable names like Hyundai, Applebee’s, and Chipotle.
The company’s growth potential is further supported by its portfolio of 150 patents (115 of which are pending). SoundHound has also established itself as a major independent voice AI platform, boasting a cumulative subscription and booking backlog exceeding $1 billion.
Furthermore, the firm has received high-profile endorsements, including an investment from chipmaker Nvidia (NASDAQ: NVDA), a key player in the AI space.
To this end, analyst Chetan Woodun views Nvidia’s backing as a strong endorsement, setting SoundHound AI apart from its competitors.
Although SoundHound AI remains unprofitable, it is narrowing its losses. The management aims to achieve profitability by 2025, with revenue projected to double from $46 million in 2023 to $100 million.
At press time, SOUN was trading at $15.84, down over 3% in the last 24 hours.
Lucid Motors and SoundHound AI offer affordable entry points with significant growth potential, reliant on continued expansion in the EV and AI sectors. While risks remain, their strong fundamentals make them promising long-term investments.
Featured image via Shutterstock
