Growth stocks can be more volatile than value stocks. And that’s why they don’t form the core of my portfolio. But investing in growth stocks can be a great way to enhance the value of my portfolio over the long run. And I spend a long time choosing the right growth stocks for my portfolio.
So here are two stocks that I think could be huge winners over the next decade and beyond.
NIO
NIO (NYSE:NIO) is a Chinese electric vehicle (EV) manufacturer based in Shanghai and there are several things I like about this stock that have made me buy.
Firstly, despite not yet being profitable, the firm has been on an impressive growth curve. The firm doubled revenue in each of the years between 2018 and 2021. However, 2022 might be different as the company has been impacted by Covid-19 lockdowns and supply constraints. But it will be opening its second factory this autumn.
NIO also has an impressive range of models, and that’s positive for future growth. The vehicles have impressive ranges utilising larger batteries than industry-leader Tesla. The Shanghai-based firm also has unique battery-swapping technology, allowing drivers to pull up at a NIO service station and exchange their empty batteries for a full one in a matter of minutes. That’s far quicker than conventional charging.
The vehicles are also packed full of gadgets, including a voice-controlled gismo for window opening and selfie taking.
In a fairly novel move, NIO also offers customers the chance to buy everything from groceries to clothing from its online store. The brand clearly recognises that people buy groceries more frequently than cars.
I’m aware that further lockdowns and worsening geopolitical tensions wouldn’t be good for NIO. But that’s a risk I’m willing to take in the long run. I’d buy more today.
Sociedad QuÃmica y Minera de Chile
Sociedad QuÃmica y Minera de Chile (NYSE:SQM) is a mining company focusing on lithium — the metal used in batteries that power everything from phones to EVs.
The stock has being on a bull run this year as lithium prices surged from $10,000 per tonne to around $70,000 this summer. In fact, the stock is up around 90% over the past 12 months as profits soar.
However, many analysts have forecast that lithium prices will fall towards the end of this year amid a global economic slowdown and less demand for iPhones and new EVs.
And this is why I’m not buying SQM stock just yet as I think there will be better entry points later in the year.
But I think the long-term outlook is very positive. I also see that we’re entering a period of scarcity defined by intense competition for resources — particularly lithium — and higher commodity prices.
SQM is a low-cost producer of the metal that is central to the electrification revolution and has a 25% share of the global lithium market. It also has 20+ years of reserves.
I am concerned about the impact of currency fluctuations and the weak pounds on my USD investments, but I do see plenty of growth with SQM.