2 High-Potential Growth Stocks You Shouldn’t Overlook

Growth stocks have consistently outperformed most other asset classes in recent years, solidifying their role as vital components of well-balanced investment portfolios. While their potential for high rewards is enticing, it’s essential to remember that with high rewards come increased risks. To capitalize on growth opportunities while minimizing unnecessary risk, savvy investors should target companies with a compelling investment thesis, a solid financial foundation, and a top-tier management team. Intuitive Machines (NASDAQ: LUNR) and Summit Therapeutics (NASDAQ: SMMT) meet these criteria, excelling in innovative fields and showing promise for sustained long-term growth. Let’s delve into the core investment theses behind each stock.

The New Space Race

Intuitive Machines etched its name in the chronicles of space exploration earlier this year by successfully landing its Odysseus craft on the Moon. This historic accomplishment marked the first U.S. lunar touchdown since 1972, significantly boosting the company’s visibility and positioning it at the forefront of the modern space race. Recognizing the potential of Intuitive Machines, NASA recently granted the company a contract valued at up to $4.82 billion for communication and navigation services in the near space region, extending from Earth’s surface beyond the Moon. This substantial investment underscores Intuitive Machines’ capabilities and cements its pivotal role in future space exploration and infrastructure development.

The company’s stock price has soared by an impressive 243% this year, yet analysts believe that shares still have ample room to grow in the years ahead. The multifaceted space industry is projected to be worth around $1 trillion by 2040, which presents a remarkable opportunity for a company currently valued at approximately $552 million. Given these developments, Intuitive Machines stands as a compelling player in the burgeoning field of space commercialization.

That said, potential investors should weigh the company’s innovative prowess and strong partnership with NASA against the inherent risks, including the long development cycles typical of the space industry. A gradual investment approach over a five to ten-year period could be prudent, allowing investors to capitalize on growth while mitigating some risks.

A Rising Star in Cancer Treatment

Summit Therapeutics has emerged as one of the leading biotech stocks this year, experiencing a staggering 700% increase in its share price. The surge is primarily fueled by ivonescimab, a potential game-changer in cancer treatment. In 2023, Summit entered a crucial licensing agreement with Akeso Biopharma, a China-based firm, granting Summit rights to market ivonescimab in significant markets including the U.S., Europe, Canada, and Japan. Notably, Akeso has already secured regulatory approval for ivonescimab in China, providing Summit with a solid foundation upon which to build.

Recent clinical trials have highlighted ivonescimab’s impressive efficacy. In a phase 3 study addressing non-small cell lung cancer (NSCLC), the drug outperformed Merck’s Keytruda, reducing the risk of disease progression or death by 49%. Given Keytruda’s status as the current market leader, with annual sales nearing $25 billion, this is a significant achievement for Summit Therapeutics.

Summit is not resting on its recent success; the company is actively conducting two late-stage trials to secure approvals in the U.S. and other key markets. Additionally, Summit has partnered with The University of Texas MD Anderson Cancer Center to evaluate ivonescimab’s efficacy in treating various solid tumors, potentially expanding its application beyond NSCLC. If ivonescimab continues to perform well in clinical settings, it could easily reach mega-blockbuster status, with potential sales exceeding $5 billion.

While some investors may fear they have missed the opportunity, there remains significant upside potential if ivonescimab meets expectations. Success in multiple indications could further inflate Summit’s valuation and possibly open doors for premium buyouts. However, it’s essential to remember that Summit Therapeutics represents a high-risk, high-reward investment. The company’s future is significantly contingent on the success of ivonescimab in forthcoming clinical trials and regulatory approvals. Any setbacks could adversely affect the stock price.

For investors with a high-risk tolerance and a long-term outlook, Summit Therapeutics presents a compelling opportunity to engage in what could be a groundbreaking breakthrough in cancer treatment. As the company progresses in its clinical trials and approaches potential approvals, it may very well stand out as a top growth stock worthy of further consideration.