The markets have an ocean of stocks, and consistently beating the index involves spotting the right opportunities. This further involves two important aspects. First, not pursuing hot stocks for fear of missing out. It generally translates into buying at stretched valuations. Further, looking at growth stocks or blue-chip stocks that trade at a valuation gap due to temporary headwinds. Once the trend reverses in these stocks, returns can be robust quickly. This column focuses on potential multibagger growth stocks to buy and hold for the next 24 to 36 months.

I believe the growth stories discussed can deliver 2x to 5x returns during this time horizon. Since the growth stocks are undervalued, the downside is capped even if macroeconomic headwinds play a spoilsport for the broader markets.

Let’s discuss the specifics that make these multibagger growth stocks attractive.

Albemarle Corporation (ALB)

Albemarle Corporation (NYSE:ALB) stock has been in a downtrend with a correction of 54% in the last 12 months. ALB stock, however, looks attractive at a forward price-earnings ratio of 21.8 and offers a dividend yield of 1.27%. Once lithium recovers, I expect multibagger returns from the stock.

In terms of industry fundamentals, the lithium shortage is expected to come as soon as 2025. Therefore, I expect a strong lithium price reversal in the next 12 to 24 months. Albemarle will be positioned for renewed revenue growth and EBITDA margin expansion as realized prices increase.

Specific to Albemarle, there are two points to note. First, even with depressed lithium prices, Albemarle has guided for 30% to 35% revenue growth for 2023 on a year-on-year basis. Healthy growth and strong fundamentals make ALB stock attractive even in difficult times.

Further, Albemarle has ambitious expansion plans. From a lithium conversion capacity of 200ktpa in 2022, the company expects to boost capacity to 600ktpa by 2027. With tripling of capacity, Albemarle will be positioned to deliver stellar growth.

UiPath (PATH)

UiPath (NYSE:PATH) stock has surged 103% year-to-date. However, PATH stock remains undervalued considering the AI tailwinds backed growth momentum. It’s among the potential multibagger growth stocks I would buy and hold for the next few years.

PATH stock recently surged by 26% in a single day, beating Q3 2023 estimates. Revenue was 24% higher on a year-on-year basis to $326 million. It’s also worth noting that UiPath reported a healthy operating cash flow of $44 million.

The company has also provided a strong outlook for the coming quarter, with revenue likely from $381 million to $386 million. With new releases focusing on artificial intelligence’s power, the company is positioned for growth acceleration. This includes UiPath autopilot and next-generation document processing.

I must add here that the company’s annualized renewal run rate (ARR) has increased consistently. For Q3 2023, ARR increased by 24% on a year-on-year basis. PATH stock is a potential value creator with AI-driven growth backing positive financial metrics.

Riot Platforms (RIOT)

When Bitcoin (BTC-USD) touched all-time highs in 2021, Riot Platforms (NASDAQ:RIOT) stock traded above $70. With solid fundamentals and a massive expansion plan, RIOT stock trades at $13.8. Assuming a scenario where Bitcoin trades at new highs next year, the stock is poised for multibagger returns.

There are three reasons to be bullish on a big rally for cryptocurrency next year. First, Bitcoin halving is due and generally translates into a big rally. Further, introducing Bitcoin spot ETF early next year is highly likely. Another reason is the possibility of multiple rate cuts. I would, therefore, bet on cryptocurrency as well as crypto stocks.

Specific to Riot, a cash buffer of $488 million and zero debt provides high flexibility for aggressive expansion. The company is already pursuing growth plans. As of Q3 2023, Riot reported hash rate capacity of 10.9EH/s. It’s expected that capacity will increase to 20.2EH/s by Q3 2024 and further to 35EH/s in 2025. This would imply stellar revenue and cash flow upside and RIOT stock is likely to be re-rated.

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.