3 stocks that brought 1000% profitability in just 2 years

In just the last two years, S&P 500 Index achieved incredible success, growing by approximately 60% during this period. This is an incredible result considering that its long-term average return is approximately 10% per year.

During this period, quite a few stocks have delivered outsized returns thanks to solid underlying businesses that have created or are poised to create tremendous value in the products and services they offer. Three stocks that have grown 10-fold in the last two years alone Summit Therapeutics (NASDAQ:SMMT), Karvana (New York Stock Exchange: CVNA)And Nvidia (NASDAQ: NVDA). But is it too late to buy these stocks or can they still go higher?

Summit Therapeutics: growth by 1600%

Pharmaceutical company Summit Therapeutics has been a hot buy lately after investors learned that its cancer drug, ivonescimab, performed better than Keytruda in a recent lung cancer study. Keytruda has been a top-selling drug for years, generating billions in revenue. Merck is a company whose $270 billion market capitalization is nearly 17 times more valuable than Summit, even with the recent rally in smaller pharma stocks.

Investors are clearly counting on more than just the approval of ivonescimab., but so that in the future it will bring huge profits to the Summit. Since there is currently no source of consistent income, there is some risk associated with healthcare stocks for investors today. While the trial was encouraging, it was conducted in China and may not have been diverse or compelling enough for U.S. regulators to grant approval.

Given the huge rally in Summit stock lately, investors may want to take a wait-and-see approach to Summit stock today. While it still has great growth potential, investors should also not overlook the high risk it contains.

Karvana: growth by 1330%

Shares of online used car retailer Carvana have soared this year as investors remain bullish on the auto market and interest rates fall. Another reason investors are excited about Carvana is that the company’s financials are improving. The company has reported profits in recent quarters, making investors less concerned about the company’s viability.

Demand for used cars could rise amid the economic downturn if low-income consumers seek more affordable vehicle options. But with modest gross margins of less than 20%, the business doesn’t have much of a buffer to cope with any headwinds and rising costs. Carvana will have to keep the ship under control so as not to fall into the risk zone. The company suffered an operating loss of $72 million last year.

Volatility in financials and low margins make this stock quite risky to own. Investors shouldn’t forget that amid weaker demand in 2022, the stock is down a whopping 98% in just one year. If it weren’t for that big sell-off, Carvana’s earnings over the past few years wouldn’t have looked as impressive. It remains a risky stock, and investors may want to wait for some stability in its earnings results before deciding to take a chance on Carvana for the long term.

NVIDIA: growth by 906%

One company that’s not surprising to see on this list is chip maker Nvidia. The company’s name has become synonymous with the boom in artificial intelligence in recent years. Demand for its products has been off the charts: Not only has Nvidia delivered strong numbers, but it still expects much higher sales and profit growth.

CEO Jensen Huang said demand for its new Blackwell AI chip has been “insane” and even customers who want to buy it today will have to wait more than a year given the current backlog. This creates a dream scenario for Nvidia investors, one that suggests the company’s growth rate could remain strong for the foreseeable future.

In the July quarter, Nvidia’s sales rose 122% year over year to a record $30 billion. And data center revenues grew by 154%.

Nvidia’s steady growth today makes it an attractive option for artificial intelligence investors. While its $3.5 trillion valuation may limit the returns it generates for investors at such a high price, it still has the potential to be a great buy over the long term.

Is it worth investing $1,000 in Summit Therapeutics right now?

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool holds positions with and recommends Merck, Nvidia, and Summit Therapeutics. The Motley Fool has a disclosure policy.