If you’re searching for explosive stocks, you’re probably intrigued by that enticing title – who wouldn’t want to turn a modest $10,000 investment into a cool million dollars by 2030? But before chasing the latest hot stock, it’s important to understand the risks of betting on short-term surges versus the rewards of buying quality for the long-haul.
Many so-called “explosive” stocks are just short-squeeze targets or serial share diluters. Their stocks may look cheap, luring in unsavvy investors unaware of what’s really happening. But management continues issuing more shares, diluting existing owners while enriching themselves. You don’t want to get caught in such growth traps.
Instead, consider focusing on businesses with robust growth runways that are already profitable, or approaching profitability. These are the real explosive stocks to buy, with the potential to turn a modest stake into life-changing wealth. That’s especially true if they make shrewd acquisitions or land major contracts. They can help turn $10,000 into $1 million, if you have patience.
It may not sound as sexy as a get-rich-quick scheme. But by investing in solid companies with long-term growth prospects, you give your money an exponentially better chance of compounding over time. Let’s explore three such explosive stocks with the right ingredients for potential millionaire-making returns.
Data Storage Corp (DTST)
I’ve been writing about Data Storage Corp (NASDAQ:DTST) in many of my recent articles, and this small-cap gem has not disappointed me at all. The stock ran up to $7.50 before a recent cooldown back to the $6.50 level, but I firmly believe DTST stock can reach $10 and higher in the near-term – with much more upside over the longer-term as this company garners more attention.
We’re talking about a very small company here, with a market capitalization of less than $50 million. But Data Storage operates in red-hot sectors that are expanding exponentially: data storage and cloud infrastructure. If management plays its cards right, this stock can absolutely tap into that exponential growth trend. This may allow the stock to grow exponentially itself.
The key for Data Storage will be securing more contracts with the big cloud players and startups in the AI space. With data-hungry models like OpenAI’s new Sora text-to-video AI in development, AI-related applications are going to require massive amounts of storage and computing power. Generative AI is incredibly data-intensive. So, companies like Data Storage are poised to be among the prime beneficiaries.
Data Storage posted 35% year-over-year revenue growth last quarter to $6 million, while remaining solidly profitable, bringing in 2 cents of earnings per share. And notably, the stock has nearly tripled since I first brought it to readers’ attention. With an explosive market opportunity ahead, I see plenty of room for further upside as this under-the-radar play gains more traction.
Riot Platforms (RIOT)
Historically, crypto mining stocks like Riot Platforms (NASDAQ:RIOT) have delivered significantly higher gains than Bitcoin (BTC-USD) itself during bull runs – only to sell off harder when the music stops. However, something seems different about the current crypto rally.
Riot is one of the biggest and most profitable Bitcoin miners out there, yet the stock has actually declined over the past few months even as Bitcoin continued climbing up toward $74,000. Investor concerns about the upcoming halving event are causing growth pains for miners, and have clearly overshadowed the positives.
I don’t think that a bear thesis is warranted here. Yes, the halving will temporarily reduce miners’ revenue until hashrates rebalance. But Riot and its peers have been aggressively improving efficiency and scale. Riot’s self-mining hashrate is projected to grow from 12.4 EH/s currently to over 28 EH/s by year-end 2024. And, 2025 guidance suggests the company’s hash rate will surge to 41 EH/s. At that level, I believe Riot would be well-positioned to completely offset the halving’s impact.
Perhaps the reason this stock is lagging is because the current Bitcoin upswing started before the halving. On the other hand, previous cycles saw the major rallies commence post-halving. This time, it was the launch of spot Bitcoin ETFs that sparked inflows and reignited fear of missing out (FOMO) sentiment among investors. Once we get past the halving later this year, I suspect Riot’s upward trajectory will resume. That would potentially unleash some serious pent-up upside for RIOT stock.
SurgePays (SURG)
SurgePays (NASDAQ:SURG) has been one of the most undervalued stocks for years, in my opinion. That’s largely due to lingering concerns around the potential discontinuation of the Affordable Connectivity Program (ACP). The ACP federal initiative helps provide subsidized broadband access to 23 million low-income households nationwide. This “explosive stock” has exploded to the downside. However, I still think it is worth looking into.
While I understand the market’s worries, I don’t think the government will axe ACP – especially in an election year when incumbent politicians avoid rocking the boat on popular policies. But even if the ACP is eventually cut off, SurgePays stock seems to already have that risk priced in at these levels.
The company missed expectations with its Q4 report. That sent shares back down into penny stock territory at a measly $4.40 price tag. Yet, SurgePays still trades at just 3-times trailing earnings. To me, that leaves very limited downside risk from current prices.
At the same time, the upside potential could be massive for SURG stock, if the ACP sticks around and SurgePays continues executing on its growth strategy. Expectations are so low that any positive surprise could provide a significant spark for this overlooked stock.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Omor Ibne Ehsan did not hold (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.