Nothing ventured, nothing gained might be cliché, but it’s kind of true when it comes to investing. Even the most conservative stock picks involve some level of risk. The reality is that anytime a person buys a stock, they’re risking capital. The key is to understand the risk and go into the trade with eyes wide open.
It’s also important to understand your own appetite for risk. While some stocks are so risky as to be dangerous, others can best be categorized as “high risk, high-reward” bets. These are the stocks that carry the potential for risk but could also lead to big gains and future riches for investors who can stomach some level of uncertainty and volatility.
Here are three high-risk, ultra-high-reward tech stocks for bold investors.
Coinbase Global (COIN)
Cryptocurrency exchange Coinbase Global (NASDAQ:COIN) has rallied hard this year alongside Bitcoin (BTC-USD). The surge in crypto prices, particularly in this year’s first quarter, has powered COIN stock to a 31% year-to-date gain. However, even with that impressive increase, Coinbase’s stock is still trading 34% lower than in 2021, shortly after its initial public offering (IPO).
The volatile nature of cryptocurrencies makes Coinbase a high-risk, high-reward tech stock. However, with many analysts betting on a continued rise in crypto prices, it’s a safe bet that COIN stock will also continue marching higher. A surge in trading on its platform led Coinbase to report a stellar increase in its first-quarter profit from a $78.9 million loss to a $1.18 billion gain. Total transaction revenue at the company tripled in the quarter to $1.08 billion.
Coinbase is also getting a lift from the new crop of Bitcoin exchange-traded funds (ETFs), many of which have partnered with Coinbase as their custodial partner.
UiPath (PATH)
Can a new CEO turnaround things at software company UiPath (NYSE:PATH)? That’s the hope as company co-founder Daniel Dines returns to the helm of this high-risk, high-reward technology firm. Dines’ return comes with PATH stock down 47% this year and over 80% since its 2023 IPO. The company, which makes robotic process automation software, has struggled with a string of financial results that missed Wall Street targets.
For this year’s first quarter, UiPath reported EPS of 13 cents, which narrowly beat analysts’ consensus forecasts of 12 cents. Revenue in the quarter totaled $335 million, up 16% from a year earlier and also better than Wall Street’s estimate of $333 million. Despite the Q1 beat, UiPath lowered its full-year guidance, saying it expects revenue of $1.40 billion to $1.41 billion. The new sales outlook was lower than the previous guidance, calling for $1.55 billion to $1.56 billion in revenue, sending PATH stock lower.
While not without risk, UiPath stock could be a long-term winner if Dines can right the ship.
MicroStrategy (MSTR)
How far MicroStrategy (NASDAQ:MSTR) executive chairman Michael Saylor goes with his Bitcoin bet is anyone’s guess. But it’s fair to say that he’s all in on cryptocurrencies. In June, Saylor increased MicroStrategy’s holdings of Bitcoin yet again, taking the company’s stake up to $15 billion. Under Saylor’s direction, MicroStrategy acquired an additional 11,931 Bitcoin at a cost of $786 million in June, following a corporate equity raise.
MicroStrategy, which technically remains a software business, now holds 226,331 bitcoins worth around $15 billion based on the digital coin’s current price. MicroStrategy buys more Bitcoin every time the price pulls back. The company’s Bitcoin holdings have been purchased at an average price of $36,798, meaning the company is sitting on a healthy profit with its position. MicroStrategy is now the largest corporate holder of Bitcoin in the world, having first started to acquire the cryptocurrency in 2020.
The heavy exposure to BTC makes MicroStrategy another high-risk, high-reward tech stock. But the gamble appears to be paying off. Year-to-date, MSTR stock is up 91%.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
