Penny stocks can have a significant impact on your portfolio even with a 10% to 15% allocation. This is because it is possible to see returns of 5x or 10x in a relatively short period of time, although it is important to research the ideas thoroughly and ensure that the bullish thesis is supported by fundamentals rather than speculation.
For example, Riot Platforms (NASDAQ: RIOT) stock was trading at $4.2 around this time last year and has already increased by 250%. Similarly, Archer Aviation (NYSE: ACHR) stock has surged by 157% in the last 12 months and has potential for further growth in the coming year.
The focus here is on quality penny stock picks that have the potential to deliver 5x to 10x returns over the next three to five years. It’s important to note that when it comes to penny stocks, a five-year timeline is considered conservative. Let’s discuss some reasons to be optimistic about these potential multibagger names.
Archer Aviation stock is currently trading just above $5, but the story behind it has high potential. The global flying car market is expected to be worth $9 trillion by 2050, and early movers in the industry could create significant value. ACHR stock has the potential to be a millionaire-maker in the next five years.
With Federal Aviation Authority certifications on track, commercialization of eVTOL is expected to begin in 2025. While growth may not be immediate, Archer is laying a strong foundation for the future. The company has already formed partnerships in the UAE and India for the launch of operations in 2026.
In addition, Archer has a backlog of $142 million from the U.S. Air Force and recently won contracts worth $500 million from Air Chateau International. With a growing order backlog, healthy growth is expected in the coming years. ACHR stock appears to be in a correction and consolidation phase before its next surge.
It’s important to note that the opinions expressed in this article are those of the writer, and it is recommended to conduct your own research before making any investment decisions.