What’s the secret to finding mega-winner stocks like Amazon and Nvidia before they fly? It’s not a secret. You just need to find a unique company to capitalize on a real opportunity before many other investors do the same.
The problem? It’s easier said than done. For every Amazon and Nvidia out there, there are also a bunch of top-two implosions like AOL (and then Yahoo!). BlackBerryand Groupon. Not every polished ticker lives up to the hype. The company in question must offer a truly game-changing product or service, but it’s not always clear if and when. When they do, though, then wow!
Start Your Morning Wisely! Wake up with Morning news in your inbox every market day. Sign Up For Free »
With that as a backdrop, traders are risk tolerant in finding a potential mega winner who might want to invest. QuantumScape(NYSE: QS) on their radar if not in their portfolio. The company may be on the verge of taking electric cars over one of its longest hurdles.
Never heard of QuantumScape? Don’t sweat it. The company’s $2.5 billion market cap doesn’t allow for much headwinds. It is also a pre-revenue company, hindering investors significantly.
Still, there’s enough potential here to be worth checking out.
In simple terms, QuantumScape designs and manufactures advanced lithium batteries. It’s not really a new science. Lithium-based batteries have been found in common consumer electronics for years now. Tesla‘s very first car — the Roadster — also used lithium-ion batteries when it was first produced in 2008. With automakers realizing the energy-saving potential of these materials needed to power EVs, nearly every electric car has been built since then. he followed suit. And for most EV owners most of the time, these batteries are enough.
Anyone keeping their finger on the pulse of the electric car movement, however, will likely know that sales are slowing. Although the market is still growing, JD Power’s Autovista24 reports sales growth for battery-powered vehicles and plug-in hybrids slowed to 22% in the first half of this year, down from an earlier pace of 35% growth.
The industry is still young and expected to accelerate at this stage of the game.
Reasons for this topic include high prices, lack of fast-charging facilities, and poor battery life. Perhaps more than anything, though, would-be EV owners worry about limited driving on a single charge without adequate charging options at their destination.
QuantumScape’s technology solves all these problems.
It is called a solid-state battery. The term means nothing to the average consumer, or even the potential owner of an electric car. But it should. QuantumScape says its solid state lithium batteries not only store and deliver more energy, but can do so for longer than the lithium-ion batteries used in electric vehicles today.
The numbers: Electric vehicles that can be driven 305 miles on a single charge of a standard lithium-based battery pack can drive between 400 and 500 miles using one of QuantumScape’s solid-state batteries. They are also able to quickly charge without damage (up to 80% capacity in 15 minutes or less). Perhaps most importantly, testing of QuantumScape batteries shows that they will be able to hold 95% charge even after 1,000 charges. That’s 300,000 miles’ worth of use.
As noted, the company has yet to sell anything. It’s close, though. Only last month it started releasing the latest prototype to EV manufacturers. Volkswagen has already committed to a partnership with QuantumScape, in fact, even before launching a commercial version of its battery design. It is also encouraging to QuantumScape shareholders that last month Tesla CEO Elon Musk announced that the EV maker will use lithium batteries in some of its vehicles starting next year, although he did not reveal where the technology would come from. Dodge the parent Stellantis hopes to start playing with the tech in 2026.
Connect the dots. This that’s it the future. Indeed, as solid-state batteries benefit from the growth of the EV market, they can also help accelerate its expansion.
In this regard, Polaris Market Research shows that the global EV battery market is set to grow at an annual rate of approximately 19% until 2030. Solid-state batteries should drive much of this growth. Straits Research, in fact, predicts that the global solid-state lithium battery market is poised to grow at an average rate of more than 36% this time.
But the question remains — would a $10,000 investment in QuantumScape now grow into a million dollar holding over a lifetime?
Considering the potential of its technology and the next chapter in the evolution of the electric car, it is possible. The company’s $2.5 billion market cap is nothing compared to the robust lithium battery market that could eventually be worth more than $24 billion a year.
Just keep the risk in perspective. There is a a lot about it, starting with the simple fact that the company has not yet sold anything. It is just sitting on the hope of selling its advanced batteries. A close-second risk is the potential for long-term losses after QuantumScape officially begins marketing its technology. At the same time, while the President-elect, Donald Trump, cannot promote the growth of the EV movement, he can certainly beat it.
If you can win the risk and the rest of your portfolio is at a solid level, QuantumScape is a compelling prospect.
Have you ever felt like you missed the boat when buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our team of expert analysts will publish a “Double Down” stock encouragement to companies they think are about to exit. If you are worried you have already lost your investment opportunity, now is the best time to buy before it is too late. And the numbers speak for themselves:
Nvidia:if you invested $1,000 when we doubled in 2009,you will have $368,053!*
Apple: if you invested $1,000 when we doubled in 2008, you will have $43,533!*
Netflix: if you invested $1,000 when we doubled in 2004, you will have $484,170!*
Right now, we are announcing a “Double Down” alert for three amazing companies, and there may not be another opportunity like this anytime soon.
See 3 “Double Down” stocks »
*Stock Advisor returns from November 18, 2024
John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Nvidia, and Tesla. The Motley Fool recommends BlackBerry, Stellantis, and Volkswagen Ag. The Motley Fool has a disclosure policy.
Will Investing $10,000 in QuantumScape Make You a Millionaire? first published by The Motley Fool
