Contrarian investing is not easy, and it certainly takes a great deal of courage. Forbes defines contrarian investing as “holding a viewpoint on the market that is out of favor, and then doing the necessary research to determine if there’s an investment opportunity.” Of course, contrarian investing can also involve buying stocks that the market has largely given up on. In this column, I will explore seven contrarian stocks to buy.

Going against the market’s prevailing wisdom is difficult both because doing so tends to raise self-doubt and to be risky. It often causes self-doubt because it’s natural to ask: “How can I be right and so many great experts and huge banks be wrong?” It tends to be risky because stocks are shunned by the market for reasons, and the market’s logic could conceivably turn out to be right. If the latter scenario materializes, contrarians probably lose a great deal of their money.

If, on the other hand, the market is wrong, contrarians can make huge profits. There are many examples that come to mind. Among them are Michael Burry’s bets against the housing sector, banks and collateralized bonds in 2007, Warren Buffett’s purchase of bank stocks in 2008, and those who bought oil stocks in the spring of 2020.

Here are seven contrarian stocks to buy that could generate gigantic profits over the longer term.

Arrival (ARVL)

Arrival (NASDAQ:ARVL) stock has plunged a whopping 90.5% this year. Apparently, the Street has lost faith in the company because it now expects to deliver only 20 EVs this year, versus its previous target of 400-600. And most are apparently betting that the company will go bankrupt before it’s able to realize revenue on a significant percentage of the 10,000 electric delivery vans that UPS (NYSE:UPS) has ordered from it.

But ARVL continues to show signs of progress and indications that it remains on the road to ultimate success. Importantly, just a few weeks ago, Arrival President Avinash Rugoobur told Automotive News Europe that the company had plans to start testing its delivery vans in conjunction with UPS “shortly.” The statement suggests that UPS remains very much interested in buying the vans from Arrival.

Further, Rugoobur reported that the company has a few ways to raise the capital it needs to expand production without diluting ARVL stock. Among these methods are obtaining loans for the U.S. government, “strategic partnerships, and licensing its intellectual property,” he explained. And Arrival’s CEO, Denis Sverdlov told the publication that: “Demand is many times more than supply,” indicating that the automaker can easily sell the EVs that it produces.

Electrameccanica Vehicles (SOLO)

Electrameccanica Vehicles (NASDAQ:SOLO) is another EV maker that many on the Street appear to be convinced will fail. SOLO stock has sunk 52% in 2022 and 68% over the last 12 months, while the shares are nearly 75% below their 52-week high of $4.10.

But a deal that Electrameccanica has made with a major Pizza Hut franchisee shows that the automaker’s potential remains very high. Under the agreement, American West Restaurant Group, which is, according to QSR: “The largest Pizza Hut franchisee in California,” is utilizing the automaker’s SOLO Cargo EV for pizza delivery.

Although America West is only utilizing 14 of the single-seat SOLO Cargo EVs at this point, the company, which “operates approximately 300 Pizza Hut quick service restaurants” just in the Los Angeles area, can easily order many more of the EVs down the road. And America West’s utilization of the SOLO Cargo EVs indicates that their combination of an affordable purchase price, small size, low operational costs, and environmental friendliness make them an excellent fit for food delivery.

Consequently, I think there’s a good chance that Electrameccanica can deliver thousands of SOLO Cargo EVs in the not-too-distant future.

Plug Power (PLUG)

Two deals recently announced by Plug Power (NASDAQ:PLUG) indicate that the demand for its products is rapidly growing. PLUG sells hydrogen-fueled material-handling products such as forklifts, as well as tools called electrolyzers that are used to make hydrogen fuel. Finally, the company is in the process of becoming a major supplier of “green hydrogen.” The latter term refers to hydrogen that’s produced from electricity generated by clean, renewable fuels.

On Oct. 19, PLUG announced that it would partner with Olin (NYSE:OLN) to launch a new hydrogen plant that is slated to generate 15 tons per day of hydrogen. Plug is reportedly experiencing delays in the development of a plant in New York and scrapped plans to develop two other hydrogen plants. Still, the company still intends to fulfill its original goal of producing 200 tons of hydrogen per day at the end of next year and is seeking to generate 500 tons per day of green hydrogen “by 2025.”

PLUG’s partnership with Olin and its lofty expansion plans indicates that the demand for hydrogen remains quite high. Additionally, Plug has reported that the margins it obtains from selling the fuel will climb meaningfully as it brings more plants online.

Also worth noting is that, on Oct. 19, the company announced that it would provide “material handling products to “nine additional sites and nearly 400 lift trucks” owned by FreezPak Logistics. Described by Plug as “a leading third party food logistics company,” FreezPak is an existing Plug Power customer. The deal both helps provide validation of the benefits of Plug’s material-handling products and suggests that the demand for them continues to grow.

PLUG stock has tumbled 40% in 2022 and 50% over the last 12 months.

Sorrento (SRNE)

Sorrento (NASDAQ:SRNE), a drug maker, has posted a string of good news in recent weeks. On Aug. 31, the company’s subsidiary, Scilex, announced that the Food and Drug Administration (FDA) had bestowed fast-track status on SP-103, its non-opioid treatment for lower back pain. The FDA’s decision shows that it believes that SP-103 is a very promising drug that can fulfill an important role.

Moreover, on Sept. 15, SRNE reported that rheumatoid arthritis patients who were administered a drug using its Sofusa Lymphatic Drug Delivery System were in better condition than those who were administered the treatment using a different delivery method.

Finally, on Aug. 23, the company stated that a Phase 3 trial of its abivertinib drug had generated a promising “overall response rate of 56.5%” among non-small cell lung cancer patients.

After plunging 68% in 2022 and 77% over the last year, SRNE stock has a fairly low market capitalization of $715 million.

Tesla (TSLA)

Not that long ago, it would have been unthinkable to label Tesla (NASDAQ:TSLA), long one of the market’s favorite tech darlings, as a contrarian stock.

But after TSLA stock sank 37% this year and fell about 50% below its all-time high, I think it’s fair to give that label to the EV maker.

However, Tesla continues to report strong results and dominate the rapidly growing U.S. EV sector. On Oct. 20, the company reported third-quarter earnings per share (EPS) of $1.05, versus analysts’ average outlook of $1.01. Additionally, its revenue jumped 56% YOY to $21.45 billion, although its top line was $510 million below the mean outlook.

The company reported that its “revenue, operating profit and free cash flow” had all reached record levels last quarter, while in the year that ended in September, its free cash flow had come in at a very impressive $8.9 billion.

Also noteworthy is that, in the first half of this year, Tesla’s sales constituted two-thirds of America’s total EV sales, showing that Elon Musk’s company remains by far the leading EV maker in its home market.

Luckin Coffee (LKNCY)

Once left for dead by most on the Street following its 2020 accounting scandal, Luckin Coffee (OTCMKTS:LKNCY) has proven to everyone that it’s alive and kicking. Still, with the shares still well over 50% below their all-time high, it appears that most big investors remain fairly bearish on the name.

As I noted in a previous column: “The company owns and operates hundreds of coffee shops and a coffee delivery business in China.”

However, Luckin actually reported rather strong second-quarter results in August. Specifically, its sales soared 72% year-over-year to $493 million, while it generated EPS of 16 cents.

Additionally, showing confidence in its own outlook, the coffee shop owner added a net total of 615 new stores in Q2.

And in another sign of confidence in itself, Luckin last August redeemed $110 million of its bonds that were not due until 2027.

Finally, as China terminates its strict, anti-coronavirus policies in the coming months, Luckin’s financial results and LKNCY stock are likely to get another, big boost.

Target (TGT)

Target (NYSE:TGT) is another fallen star, as the shares have tumbled 38% over the last six months, and they now trade at a relatively low forward price-earnings ratio of 12.8.

The retailer’s second-quarter results were negatively impacted by excess inventories and supply-chain woes. But those issues should dissipate starting this quarter. Moreover, despite the company’s problems, its comparable sales climbed 2.5% YOY in Q2.

Meanwhile, in line with my theory that U.S. consumers are likely to shift back to spending more money on goods relatively soon, Wells Fargo expects Target’s financial results to rebound next year, with a significant increase in its profitability.

And Jeffries on Oct. 18 upgraded TGT stock to “buy” from “hold.” The firm thinks that the company has made progress in reducing its inventory, and it expects the company’s margins to climb in 2023. Among Target’s positive catalysts next year will be: “Lower freight costs and improved e-commerce efficiency,” along with its partnerships with Disney (NYSE:DIS) and Ulta Beauty (NASDAQ:ULTA).

On the date of publication, Larry Ramer owned shares of ARVL, SOLO, and LKNCY.  The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.