Risk management is the core of successful long-term investing. Investors comfortable with risk can set themselves up for huge long-term gains by identifying the best highly volatile, high-beta stocks to buy. Stocks with betas of 1.5 or higher tend to be at least 50% more volatile than the S&P 500. That volatility can generate huge swings in share price that create too much risk for some investors.
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For aggressive investors willing to ride out the potential volatility, these seven high-risk stocks to buy come with recommendations from CFRA Research and have betas of at least 1.1:
| Stock | Beta (as of March 28) |
| Nvidia Corp. (ticker: NVDA) | 1.74 |
| Tesla Inc. (TSLA) | 2.03 |
| Advanced Micro Devices Inc. (AMD) | 1.90 |
| Boeing Co. (BA) | 1.43 |
| Intuit Inc. (INTU) | 1.17 |
| Applied Materials Inc. (AMAT) | 1.60 |
| Lam Research Corp. (LRCX) | 1.50 |
Nvidia Corp. (NVDA)
Nvidia is a semiconductor stock that develops graphics cards and mobile processors used in personal computers, wireless devices and workstations. While Nvidia has been one of the best-performing stocks in the market over the past decade, the stock’s 52-week high of $289.46 and 52-week low of $108.13 demonstrate the risk in owning it. Analyst Angelo Zino says investors should ride out the volatility given the company’s long-term growth potential. He projects revenue growth will accelerate from 9% in fiscal 2024 to 24% in fiscal 2025. For now, CFRA has a “buy” rating and a 12-month price target of $250 for NVDA stock, which closed at $265.31 on March 27.
Tesla Inc. (TSLA)
Tesla is the U.S. leader in electric vehicles, but its stock has demonstrated such extreme volatility in recent years that it’s one of the market’s riskiest investments. Analyst Garrett Nelson says Tesla’s new factories in Germany and Texas set the stage for significant production growth in 2023 and beyond. Tesla began delivering its electric semi truck in December 2022, and Nelson projects it will begin delivery of its Cybertruck in mid-2023. In the longer term, he says Tesla’s Roadster and Optimus robot will be additional growth drivers. CFRA has a “buy” rating and $250 price target for TSLA stock, which closed at $191.81 on March 27.
Advanced Micro Devices Inc. (AMD)
Even after losing value in the past year, shares of microprocessor and graphics semiconductor stock Advanced Micro Devices are still up more than 870% in the past five years, demonstrating the stock’s high risk and upside potential. Zino says AMD is positioned to continue to gain data center market share as its EPYC processor sales ramp up. He projects flat revenue in 2023 but margin expansion in the second half of the year and a return to at least 20% revenue growth in 2024. CFRA has a “buy” rating and $90 price target for AMD stock, which closed at $96.61 on March 27.
Boeing Co. (BA)
Boeing is one of the biggest global suppliers of large commercial aircraft and is one of the top U.S. defense contractors. Boeing’s major problems started in 2019, when the company was forced to ground its 737 MAX fleet following two fatal crashes. In fact, Boeing’s stock price is down more than 30% in the past five years. Analyst Colin Scarola says Boeing’s debt and “egregious quality control lapses” make it a risky bet, but the stock is extremely undervalued given its long-term earnings growth potential. CFRA has a “strong buy” rating and $240 price target for BA stock, which closed at $200.57 on March 27.
Intuit Inc. (INTU)
Intuit produces tax preparation, personal finance and accounting and management software. Analyst John Freeman says the migration of small- and medium-sized businesses to cloud networks should provide a tailwind for Intuit. The company’s legacy desktop software has now dropped to less than 25% of Intuit’s total revenue. Freeman says the company’s valuable brand and growing product portfolio create opportunities for Intuit to cross-sell and upsell its business customers. He projects three-year compound annual revenue growth of 11% driven largely by cloud-based apps, and says its Credit Karma brand holds significant upside potential. CFRA has a “buy” rating and $485 price target for INTU stock, which closed at $426.94 on March 27.
Applied Materials Inc. (AMAT)
Applied Materials is the world’s largest wafer fabrication equipment maker for the semiconductor industry. The cyclical semiconductor industry has always been volatile. Analyst Keven Young says investors are looking beyond weak semiconductor sales projections in 2023, and Applied Materials’ fiscal 2024 earnings estimates are overly conservative. He is bullish on the company’s exposure to recurring revenue, which could drive earnings-multiple expansion over time. The stock’s attractive 17.4 forward earnings multiple could provide downside support and help mitigate some risk in the near term. CFRA has a “buy” rating and $135 price target for AMAT stock, which closed at $118.87 on March 27.
Lam Research Corp. (LRCX)
Lam Research is the largest manufacturer of etching products and other tools for the semiconductor industry. Young says Lam has both an attractive valuation and improving financial visibility. The company faces near-term risks associated with a downturn in memory market spending in 2023, but Young says its growing exposure to recurring revenue will help reduce financial volatility in coming years. In addition, he says Lam will continue to invest in next-generation technology tools in anticipation of future demand trends. The stock also pays a 1.4% dividend. CFRA has a “buy” rating and $530 price target for LRCX stock, which closed at $495.77 on March 27.
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7 High-Risk Stocks for Aggressive Investors originally appeared on usnews.com
Update 03/28/23: This story was previously published at an earlier date and has been updated with new information.
