Investing can be a high-stakes game, especially since trade contains some element of risk.
However, certain investors have more of an appetite for risk than others and are willing to bet on high-risk stocks in order to reap high rewards should their gamble pay off. In the current market, plenty options abound.
Many stocks offer the potential of big rewards, if investors can stomach the risks involved and face possible losses. Some of the riskiest securities, and the ones with the most upside, are meme stocks. Retail investors periodically pump them up to unsustainable levels and then dump them just as quickly. Other stocks face geopolitical risks or are newly issued securities without a proven track record yet.
Whatever the reason, opportunities exist in the market now for investors looking for excitement. Let’s delve into Q4 stock predictions of three high-risk, high-reward stocks ready to roar into 2024.
BlackBerry (BB)
Former smartphone maker BlackBerry (NYSE:BB) is now a meme stock whose best days are behind it. Latest reported financial results were predictably bad.
BlackBerry announced a net loss of $42 million for Q2 as revenues declined 21% from a year earlier. Revenue in the company’s cybersecurity business segment declined 40% year over year (YOY). Subsequently, BlackBerry announced the resignation of a prominent board member along with its latest print.
However, a high-reward scenario is at play with BlackBerry right now. The company has revealed it’s on the market and open to a takeover. Media reports surfaced recently that private equity firm Veritas Capital is kicking the tires at BlackBerry and considering making an offer. News of the potential takeover sent BB stock up 17%, its biggest increase in more than two years. Once any takeover is officially announced, BlackBerry’s share price could skyrocket.
As it stands now, BB stock is down 7% over the last 12 months and down 56% over the past five years. Proceed cautiously.
Instacart (CART)
Since its market debut in late September, shares of online grocery company Instacart (NASDAQ:CART) have fallen 17%. The stock fell more than 10% on its second trading day alone. CART stock is now trading 7% below its IPO price of $30.
Initially, the stock jumped 40% higher to begin trading on the Nasdaq exchange, but the rally fizzled within hours. It’s been down hill ever since. Unfortunately, Instacart was expected to reinvigorate an IPO market that’s been largely dormant for 18 months.
However, investors can be optimistic for CART stock. The company has yet to issue any financial results since going public. A solid earnings print could boost the share price. Additionally, Instacart had the misfortune of going public the day before Fed Chair Jerome Powell warned of further interest rate hikes.
Bad timing, yes. This depressing news among investors led to a broad-based selloff in equities. Instacart’s stock can be expected to rise as sentiment improves among investors. CART isn’t without risk but worth considering.
Alibaba (BABA)
Within China, one of the most high-risk, high-reward stocks is technology giant Alibaba (NYSE:BABA). Currently, Alibaba is undergoing a massive transition, with plans to split into six separate business groups. The ambition is paving the way for each unit to eventually go public on its own, including the cloud computing division.
The break-up of Alibaba is not without risk, and it comes at the same time as a leadership transition at the tech giant. Former CEO Daniel Zhang is departing. And he won’t transition to chairman of the company’s cloud computing business as originally planned. Instead, Eddie Wu, who is taking over, will now also be chairman of the cloud business. The palace intrigue creates another layer of uncertainty at Alibaba.
However, long-term Alibaba remains one of China’s leading tech concerns. True, the break-up of the company could eventually pay dividends. BABA stock is down 6% this year and has declined 44% over the last five years.
On the date of publication, Joel Baglole did not have (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.
