There are some sectors poised for gains that investors should keep on their radars. These sectors could grow as much as 20 times. Furthermore, I believe that this is a conservative estimate based on analyst projections.
I think that these sectors are relatively untapped. Some are more well-known and the growth story is obvious. While other sectors poised for gains are quietly flying under the radar, ready for investors to embrace them.
There are also industries and subsectors in this list that could be more accretive for investors than others. However, gaining 20 times or more involves considerable risk and speculation. Having said that, that door is also open for investors who have a suitable risk tolerance.
So here are three sectors poised for gains that could potentially mint new millionaires. I advise investors to have at least a small allocation to these. This is in order to improve their risk-adjusted returns and total returns.
Renewable Energy
This sector focuses on sustainable and eco-friendly energy sources like solar and wind power. I feel that despite this sector being an obvious growth sector, the companies within it trade at low valuations. There is great upside potential here.
Some companies to consider in this sector include First Solar (NASDAQ:FSLR), Brookfield Renewable Partners (NYSE:BEP), or NextEra Energy (NYSE:NEE). These brands have suffered from some short-term headwinds (particularly in Europe). However, these are gearing up for a stronger 2024 and beyond.
As investor dollars flow to sexier investments such as robotics and AI, I think that renewable energy could come out ahead of the broader indices such as the S&P 500, as well as potentially 20x in value as the market matures.
With more than 50% of all new power coming to the grid in the United States from solar last year, this is a trend that will only continue to develop in the future.
Information Technology
With that being said about renewables, my long-term thesis is that tech and information technology will continue to outperform all others for the foreseeable future. One reason of course is the explosion of AI. Companies like Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA) leading the charge.
AI, for instance, is expected to be worth more than half a trillion dollars by 2032. Who knows how far this trend will stretch into the future. There’s also the growth of the semiconductor industry, of which many companies in the Majestic Seven will benefit.
While the broad indices such as the Nasdaq are unlikely to make 20 times gains, specific companies in this sector, especially small caps and penny stocks certainly have this potential.
Analysts have highlighted these stocks for having multibagger potential. They include: Nerdy (NYSE:NRDY), Himax Technologies (NASDAQ:HIMX), and Guardforce AI (NASDAQ:GFAI).
Biotechnology
The biotechnology sector, which includes companies focusing on genetic engineering, gene therapy, and pharmaceutical research, is advancing rapidly.
Biotech stocks are particularly suited for investors seeking high-risk, high-return gains, with the valuations of these companies often changing 1,000% or more on trial results, product announcements, and other developments.
For those who are more conservative, one can also invest in broad-market ETFs such as the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) instead of buying shares in these risky penny stocks.
Still, as a rule of thumb, there is no potential for gain without a proportionate risk of loss, so to 20x your money, one must be prepared to pony up a sufficient amount of capital in a highly volatile investment.
Some promising industries within the biotech sector include genetic engineering, drug discovery, and personalized medicine. Here you will find stocks capable of minting new millionaires with a sufficient investment.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.