Historically, the last quarter has been good for equities. This is good news as investors would love to make some quick bucks in the holiday season for a heavy wallet. Further, with the debt ceiling crisis averted, it’s likely that the markets will trend higher. However, stock selection remains important and for quick gains, it’s important to scan for potential catalysts for the Company or industry. This has led to the emergence of stocks to buy.
This column focuses on three growth stocks to buy that are likely to surge higher on the last quarter of 2023. Of course, the rally depends on specific catalysts playing out, but I am bullish on the probability of a favorable event. In my view, the stocks to buy discussed can potentially surge by 50% or more in Q4 2023.
I must add that these growth stories are non-speculative. Depending on business developments, I would hold these stocks for longer. Let’s discuss the reasons to be bullish on these stocks to buy.
Riot Platforms (RIOT)
Bitcoin (BTC-USD) mining stocks have a high positive correlation with the cryptocurrency. It’s worth noting that Bitcoin has surged to its highest level in six weeks and the last quarter is likely to be good. With Bitcoin halving due in 2024, the cryptocurrency will discount that factor. I believe that Riot Platforms (NASDAQ:RIOT) can surge by 50% to 75% in Q4 2023 depending on the extent of the Bitcoin rally.
The best thing about Riot is its strong fundamentals. As of Q2 2023, the Company reported zero debt. Further, Riot had $510 million in cash and digital assets. This will support the Company’s aggressive expansion plans through 2025.
To put things into perspective, Riot reported a Bitcoin mining capacity of 10.7EH/s in Q2 2023. Riot targets to boost capacity to 35.4EH/s by 2025. This will translate into robust revenue and cash flow upside. For now, even if Bitcoin is back above $30,000 levels in December, RIOT stock can deliver more than 50% returns.
Li Auto (LI)
After touching highs of $47.3 during the year, Li Auto (NASDAQ:LI) stock has corrected to current levels of $35. Even if LI stock is back to previous highs, it would imply a rally of 35% from current levels. I am bullish on LI stock trading above $50 before the end of the year.
It’s worth noting that the stock is taking a breather after a good rally for year-to-date. During this time, the Company continues to report robust growth numbers. This is the key catalyst for a renewed rally in LI stock.
To put things into perspective, Li Auto reported Q3 2023 deliveries of 105,108 cars. On a year-on-year basis, deliveries surged by 296.3%. Stellar delivery growth sets the stage for strong revenue and cash flows. This is likely to trigger a sharp reversal rally.
Li has already launched several models in the last 12 months that have supported delivery growth. Li MEGA is due for launch in December. Li Auto believes that MEGA “will be the highest-selling vehicle in China priced at more than 500,000 yuan.” The stock is therefore likely to discount a strong start to 2024. This makes it one of those stocks to buy.
Joby Aviation (JOBY)
Joby Aviation (NYSE:JOBY) is another stock that’s likely to surge higher in Q4 2023. It’s worth noting that JOBY stock has corrected by 48% from highs of $12. I see this as a golden opportunity to accumulate with business developments remaining positive.
In a key development, Joby delivered the first electric air taxi to the U.S. Air Force. This delivery is a part of the Company’s $131 million order from the Department of Defense. With the first aircraft being delivered six months ahead of schedule, Joby seems to be on track for the launch of commercial passenger service in 2025. I must mention that the order from DOD is a strong validation of the Company’s electric air taxi.
In another big development in September, Joby’s wholly owned subsidiary, H2FLY, announced the “successful completion of the world’s first piloted flight of a liquid hydrogen-powered electric aircraft.” With the hydrogen economy likely to get bigger, the potential commercialization of the aircraft will be a game-changer.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
