In a nutshell, you’re like an investor buying into Nvidia in 2013 when shares traded in penny stock territory: you have a vision of the future and have found a speculative stock that fits that vision. More importantly, you have the conviction to wait out turbulence with massive gains on the horizon.
While these stocks may not be the next Nvidia, each is cornering an important and emerging market with massive potential. As early movers in their respective spaces, these speculative stocks remain under the radar — for now.
Braze (BRZE)
Managing marketing in today’s digital creator economy is tough when you consider the many platforms, customer expectations across channels, and sheer scope of a well-integrated marketing campaign. Braze (NASDAQ:BRZE) is a speculative stock that helps customers better manage marketing efforts. Shockingly, most investors don’t have this mid-cap speculative stock on their radar even though it boasts mega-clients like Restaurant Brands International (NYSE:QSR), NASCAR and Intuit (NASDAQ:INTU).
In a nutshell, Braze leverages user data to better personalize advertising across platforms. It creates a coherent thread for the potential customer while helping the advertiser track spending and return on ad sales more efficiently. Braze is also one of the few companies effectively using customer-facing artificial intelligence (AI) integration tools. That’s in contrast to companies slapping an “AI” label on anything and everything with a hint of automation, whether or not the label is appropriate.
A newer company expanding as rapidly as possible, Braze isn’t yet turning a profit. But the company’s strong revenue growth, high subscription revenue rate (95%) and a notable client book prove this speculative stock has a bright future. Even if it remains under the radar for now.
Samsara (IOT)
The “Internet of Things” is a well-known trope by now, but for many the phrase conjures up thoughts of connected refrigerators and home alarm systems. While valid, those are just a slice of the overall IoT sector. However, speculative stock Samsara (NYSE:IOT) is scaling the concept to serve enterprise and industrial operations more effectively. Samsara primarily targets fleet, transportation and heavy equipment to manage operational workflows, track movement and improve overall safety.
Samsara just marked a record-setting year in its most recent report, nailing 39% year-over-year (YoY) recurring revenue growth. Recurring customer counts climbed 49% and brought in a respectable $27 million in free cash flow. Most importantly, Samsara is a relatively new firm bringing an equally nascent tech to market. It means the firm’s upward possibilities are endless as they increase market penetration and begin scaling to meet growing clients by targeting the bigger fish currently just out of their reach.
GigaCloud Technology (GCT)
Globalized, direct-to-consumer e-commerce is as popular as ever post-pandemic, with giants like Amazon (NASDAQ:AMZN) and Alibaba (NYSE:BABA) leading the way. GigaCloud Technology (NASDAQ:GCT) operates similarly but carves out its niche by focusing on the vast B2B market. It aims to be the ultimate platform for businesses to source products and handle all related vendor, product and sourcing management tasks.
Medium-sized businesses often struggle with product and inventory management, sourcing and payment processing. GigaCloud provides a comprehensive suite of services tailored for the scaled B2B e-commerce market, including a vibrant vendor marketplace, shipment and freight management, warehouse storage, AI-powered fulfillment and notably, secure cross-border payment facilitation.
The company’s price-to-earnings ratio stands out for its low value, at just 19x, starkly contrasting with the tech sector’s average ratio of 36x. This disparity becomes even more pronounced when considering GigaCloud’s earnings growth, which saw earnings per share double over the past four quarters. Moreover, the company maintains robust free cash flow per share and trades at an exceptionally low 0.68x sales, highlighting its status as a highly undervalued speculative stock in today’s market.
On the date of publication, Jeremy Flint held a long position in BRZE. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.