Key Points
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These AI growth stocks have multibagger potential in the coming years.
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Their markets are growing fast, and their top lines are ballooning in parallel.
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These companies are positioned well to dominate their respective sectors.
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It is tempting to believe the next Nvidia (NASDAQ:NVDA) or Palantir (NASDAQ:PLTR) is hiding in plain sight and will quickly give you multibagger returns. It does happen, but these stories are often the exception, as most moonshot investments go wrong. Still, ambitious investors shouldn’t ignore them entirely.
Having a small portion of your portfolio in up-and-coming AI growth stocks can significantly boost your portfolio if some of them pay off big. If they can ride the megatrends and become the dominant player in their respective markets, it is possible they can turn $10k into $50k in a couple of years and beyond. If not, you will likely lose out on your investments here.
With those risks in mind, here are the three AI growth stocks to look into:
Red Cat Holdings (RCAT)
Red Cat Holdings is a major producer of small AI-powered drones, specifically for use in surveillance and warfare, though it also makes civilian drones. The U.S. has highly advanced drones, but it does not have an edge when it comes to cheap drone swarms. In fact, the biggest drone producer worldwide is China’s DJI.
DJI is not a military company, and its drones have mostly been used for hobby videography and photography, up until 2022. Since then, DJI drones have been repurposed for military uses and then deployed in droves by Ukraine and Russia. These drones are incredibly versatile and are redefining how wars are fought.
Red Cat is one of the only answers the U.S. has to DJI, though its scale is tiny in comparison. It doesn’t help that DJI also sells in the U.S. and is a major competitor. As one analyst wrote, “DJI drones are orders of magnitude better than these weak competitors and consumers will figure out how to continue to get them.”
Luckily for Red Cat, a ban is looming. DJI is out of stock in many places due to customs issues and is facing an automatic ban by December 23rd if it isn’t formally audited for security.
Red Cat’s market cap is $875.9 million as of this writing, and it isn’t a stretch to see it at $4-5 billion if it can aggressively land drone contracts from the DoD. It has already landed some contracts and sees $100 million in FY 2025 revenue at the midpoint.
Serve Robotics (SERV)
Serve Robotics comes with a similar risk-reward profile to that of Red Cat, as you’re paying a big premium upfront for tremendous long-term potential. This company makes delivery robots that can provide last-mile delivery services.
These robots are gaining popularity and are becoming increasingly common in select cities in the U.S. Uber Eats has launched robot delivery services in Austin, Dallas, Los Angeles, and Jersey City. Serve Robotics is its main partner. In many college campuses, these robots are commonplace.
Humans delivering food to your doorstep may become a thing of the past in the next decade, as these Uber Eats and Serve plan to deploy 2,000 sidewalk robots across U.S. markets by 2026 and continue scaling up. These robots can run 14 hours on a single charge, operate for around five years, and don’t demand higher wages. Each robot costs ~32k, but with scale, costs are expected to go much lower.
Analysts see revenue growing 102.2% to $3.66 million in 2025 and 858% to $35.1 million in 2026… and so on. Management sees an annualized revenue run rate of $60-80 million for 2026.
Market cap as of writing is $602.4 million, and each share is a bit above $10. I don’t expect a cash crunch, since Uber is backing it and has deep pockets. Uber already has a stake in SERV.
PROCEPT BioRobotics (PRCT)
PROCEPT BioRobotics (NASDAQ:PRCT) is a surgical robotics company. It specializes in minimally invasive urologic surgery with an emphasis on treating benign prostatic hyperplasia (BPH). This is a condition that affects up to 90% of men over age 80.
Its AquaBeam Robotic System can precisely remove prostate tissue. Its FDA 510(k)-cleared HYDROS Robotic System uses advanced image recognition software built from a library of real-world Aquablation therapy procedures involving over 50,000 cases and can assist by integrating ultrasound imagery with digital cystoscopy.
The total addressable market is estimated to be around $20 billion due to the number of people BPH will affect. It already has a $2.12 billion market cap. The company’s expertise in robot-guided BPH surgeries could open the door to more products for other surgeries in the future.
2025 revenue is expected to grow 45.5% to $326.5 million and grow 30.7% in 2026 to $426.9 million.
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Author: Omor Ibne Ehsan
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