DailyBubble recently compiled a list of the Top 10 Small-Cap Stocks with the Highest Upside Potential. In this article, we will focus on ChargePoint Holdings, Inc. (NYSE:CHPT) and where it stands among other small-cap stocks.
Small-cap stocks are companies with market capitalizations between $250 million and $2 billion. These companies are often new and represent the world’s up-and-coming businesses. While most giant companies start as small-cap, they grow over time, increasing their share prices and becoming large or mega-cap companies. Investors who take the risk with thorough research and analysis can benefit from the profits of investing in small-cap stocks.
According to a report from Julius Baer, a private banking company based in Zurich, small-cap stocks have historically outperformed large-cap stocks over long periods. For instance, a dollar invested in US large caps in 1926 would have grown to $5,767 by 2018, while a dollar invested in small caps would have been worth almost seven times more at $38,842.
Investing in small-cap stocks has its advantages and disadvantages. While these stocks have high growth potential and relatively lower share prices, they also come with higher risks due to their vulnerability to economic fluctuations compared to large-cap companies. However, small caps are currently looking cheaper relative to the broad market than they have in the last 20 years.
J.P. Morgan Asset Management’s Long-Term Capital Market Assumptions (LTCMAs) expect small-cap stocks to generate potent long-term returns while mitigating some risks. Fundstrat Global Advisors’ co-founder, Thomas Lee, projects a 50% upside for small-cap stocks in 2024, highlighting their faster revenue and earnings growth potential compared to the S&P 500.
As of June 2024, there are around 1600 small-cap stocks traded on US stock exchanges. DailyBubble has filtered out the top 10 small-cap stocks with upside potential to help readers diversify their portfolios. ChargePoint Holdings, Inc. (NYSE:CHPT) is one of the top small-cap stocks with an upside potential of 169.82%. The company provides EV charging networks and solutions in North America and Europe.
While CHPT ranks 6th on the list, DailyBubble believes that AI stocks hold greater promise for delivering higher returns within a shorter timeframe. For investors looking for promising AI stocks trading at attractive valuations, there are options beyond CHPT. It is essential to consider the potential of different sectors and technologies when building a diversified investment portfolio.
In conclusion, small-cap stocks offer unique opportunities for growth and profitability, but investors should carefully assess the risks and rewards associated with these investments. By staying informed and conducting thorough research, investors can make informed decisions to maximize returns in the small-cap market.