In this article, we will look at the 10 Worst High-Risk High-Reward Growth Stocks To Buy.
Is the Tariff Solution Around the Corner?
On March 14, Tom Lee managing partner and head of research at Fundstrat Global Advisors appeared on a CNBC interview to talk about how the markets react to crises and what approach investors should take considering the broader perspectives. Lee believes that the market will recover and it has recovered every time in the past as well. He emphasized that one thing that investors have to keep in mind is that the market was at an all-time high less than a month ago. When a market falls from a 52-week high, it is a market pricing in crises and the current market is pricing in for recession which brings the “Fed Put” into play. Lee highlighted that the Fed is now in a position to cut rates, which should mitigate the downside.
Moreover, Lee noted that he thinks that there is a very high probability that a tariff solution will happen before April 2. He explained that it is simple to see that China, Europe, Canada, and Mexico have been outperforming the US. This tells that these countries are not headed towards a recession. In addition, Lee also quoted the 1962 Cuban Missile Crisis, highlighting that it was a 12-day crisis, however, the market bottomed only 7 days into the crisis and had recovered two-thirds, 5 days before the crisis ended.
In addition, to Tom Lee, Nancy Tengler, Laffer Tengler CIO and CEO further added that she believes that the market is still in a bullish stance, however, it is going through an overdue correction. She noted that while the sentiment is low and the expectations across the board have fallen, however, the bond market is stable which tells that the market is not headed towards a recession. Moreover, she also highlighted that most of the recession sentiment is driven by the import figures which rose 70% in January. However, it was just the purchasing managers trying to get ahead of the tariffs. Nancy believes that similar to 2022 this will also settle in, moreover, the decelerating growth is also healthy in terms of the price correcting which she believes was much needed. Lastly, Nancy pointed out that the current market volatility can be a solid buying opportunity for investors.
With that let’s take a look at the 10 worst high-risk high-reward growth stocks to buy.
A portfolio manager studying various stocks and other securities on a tablet.
Our Methodology
To curate the list of 10 worst high-risk high-reward growth stocks to buy we used the Finviz stock screener, Yahoo Finance, CNN, and Seeking Alpha as our sources. Using the screener we aggregated a list of growth stocks with beta (5-year monthly) between 2 and 5, analyst upside potential of at least 30%, and 3-year sales growth of more than 20%. Next, we check the beta values from Yahoo Finance, analyst upside potential from CNN, and sales growth from Seeking Alpha. Lastly, we ranked the stocks in descending order of the analyst upside potential, from best to worst. We have also added hedge fund sentiment around each stock. Please note that the data was recorded on March 18, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Worst High-Risk High-Reward Growth Stocks To Buy
10. Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT)
Beta (5Y Monthly): 2.96
3-Year Sales Growth: 130.98%
Number of Hedge Fund Holders: 15
Analyst Upside Potential: 359.04%
Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) is a biotechnology company that specializes in the development of messenger RNA (mRNA) medicines and vaccines. It focuses on creating treatments for infectious diseases and rare genetic disorders, particularly those affecting the liver and respiratory systems. The company collaborates with partners like CSL Seqirus and has a joint venture in Japan, for mRNA vaccine and therapeutic manufacturing.
On March 13, Analyst Myles Minter from William Blair maintained a Buy rating on the stock. Minter anticipates that the Phase II trial results for ARCT-032 and ARCT-810 will be crucial. These trials are expected to yield significant data by the end of Q2 2025. Positive outcomes could strengthen Arcturus Therapeutics Holdings Inc.’s (NASDAQ:ARCT) market position and provide substantial growth opportunities. In addition, the analyst noted that the company is making strategic financial decisions, such as delaying the recognition of Kostaive profit share revenues until Q4 2026. This aligns with covering a 40% cost share with CSL, which is expected to stabilize the company’s financials over the long term.
Lastly, Minter noted that although collaborative revenue projections for 2025 have been reduced, the potential for milestone payments following EU approvals and future US regulatory filings presents a promising outlook for revenue growth beyond 2025. Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) is one of the worst high-risk high-reward growth stocks to buy.
9. Capricor Therapeutics, Inc. (NASDAQ:CAPR)
Beta (5Y Monthly): 4.11
3-Year Sales Growth: 324.93%
Number of Hedge Fund Holders: 14
Analyst Upside Potential: 210.56%
Capricor Therapeutics, Inc. (NASDAQ:CAPR) is a biotechnology company primarily focused on developing transformative cell and exosome-based therapeutics. Its main focus is on treating rare diseases, with a significant emphasis on Duchenne muscular dystrophy. Its lead product, Deramiocel (CAP-1002), is an allogeneic cardiac-derived cell therapy currently in Phase 3 clinical development for DMD.
On March 17, Analyst Joseph Pantginis from H.C. Wainwright reiterated a Buy rating on the stock, with a price target of $77. Pantginis highlighted that HOPE-2 trial results show that Deramiocel has demonstrated significant efficacy in slowing disease progression and preserving muscle function over more than three years. The study found a 52% reduction in disease progression compared to an external comparator group, highlighting Deramiocel’s potential as a durable and effective treatment option. Moreover, the therapy was well tolerated with no new safety concerns, reinforcing its favorable safety profile. The analyst thinks that given the limited treatment options available for DMD, these results strengthen the case for deramiocel’s future regulatory approval and market potential. Capricor Therapeutics, Inc. (NASDAQ:CAPR) is one of the worst High-Risk High-Reward growth stocks to buy.
8. Janux Therapeutics, Inc. (NASDAQ:JANX)
Beta (5Y Monthly): 3.22
3-Year Sales Growth: 42.79%
Number of Hedge Fund Holders: 54
Analyst Upside Potential: 153.89%
Janux Therapeutics, Inc. (NASDAQ:JANX) is a clinical-stage biopharmaceutical company focused on developing novel tumor-activated immunotherapies for cancer treatment. The company utilizes two proprietary bispecific platforms including TRACTr and TRACIr. These platforms aim to create safe and effective therapeutics that guide the immune system to target and eliminate tumors while minimizing harm to healthy tissues.
On March 14, JonesTrading analyst Soumit Roy maintained a Buy rating on the stock. Roy noted that Janux Therapeutics, Inc.’s (NASDAQ:JANX) masking technology is showing strong potential, with best-in-class data. This technology is crucial for the company’s tumor-activated immunotherapies. Moreover, the company is expected to release updated data from its PSMA and EGFR targeting masked T cell engagers in 2025. This could further validate its technology and enhance its clinical-stage programs. The company has a substantial cash position of approximately $1.03 billion, which supports ongoing and future research and development activities. Janux Therapeutics, Inc. (NASDAQ:JANX) is one of the worst high-risk high-reward growth stocks to buy.
7. Pagaya Technologies Ltd. (NASDAQ:PGY)
Beta (5Y Monthly): 6.01
3-Year Sales Growth: 29.57%
Number of Hedge Fund Holders: 24
Analyst Upside Potential: 117.77%
Pagaya Technologies Ltd. (NASDAQ:PGY) is a financial technology company that specializes in AI-driven credit assessment solutions for lenders. It develops machine learning and AI analytics to enhance credit underwriting for financial institutions. Its proprietary network processes over 1 application per second, enabling real-time risk assessment and customer matching for lenders.
On March 18, Benchmark Co. analyst Mark Palmer reiterated a Buy rating on the stock with a price target of $25. The analyst mentioned that the company is expected to avoid the dilutive deals and substantial losses that previously pressured its stock price, as it prioritizes growth drivers and profitability. Moreover, the introduction of a pre-screen lending product is also seen as a catalyst for expanding its offerings in financial technology. Pagaya Technologies Ltd. (NASDAQ:PGY) in Q4 2024 achieved self-funded growth demonstrating operational resilience and financial independence. During the quarter the company exceeded expectations with $279.39 million in revenue. It is one of the worst high-risk high-reward growth stocks to buy.
6. Credo Technology Group Holding Ltd (NASDAQ:CRDO)
Beta (5Y Monthly): 2.16
3-Year Sales Growth: 54.56%
Number of Hedge Fund Holders: 43
Analyst Upside Potential: 79.71%
Credo Technology Group Holding Ltd (NASDAQ:CRDO) is a technology company specializing in high-speed connectivity solutions for data infrastructure markets, it mainly focuses on overcoming bandwidth limitations in wired connections. It does so by developing optical and electrical Ethernet solutions optimized for high-speed data transmission, including emerging standards like 100G, 200G, 400G, 800G, and 1.6T ports.
On March 12, Tore Svanberg from Stifel Nicolaus maintained a Buy rating on the stock, with a price target of $85.00. During the fiscal third quarter of 2025, the company reached $135 million in revenue, reflecting a 154% year-over-year increase, driven by demand from AI platforms and hyperscale customers. Moreover, Credo Technology Group Holding Ltd (NASDAQ:CRDO) also reported an improved gross margin of 63.8%, reflecting strong operational efficiency.
The company is expanding its portfolio to include PCIe products, targeting AI scale-out networks. Moreover, its ZeroFlap AECs have set benchmarks in reliability, providing over 100x better performance than laser-based optical solutions. Looking ahead, Credo Technology Group Holding Ltd (NASDAQ:CRDO) is positioned for continued growth as it scales its customer base across hyperscalers and expands into new markets like PCIe retimers. It is one of the worst high-risk high-reward growth stocks to buy.
5. Affirm Holdings, Inc. (NASDAQ:AFRM)
Beta (5Y Monthly): 3.64
3-Year Sales Growth: 35.61%
Number of Hedge Fund Holders: 61
Analyst Upside Potential: 68.89%
Affirm Holdings, Inc. (NASDAQ:AFRM) operates as a financial technology company specializing in buy now, pay later solutions and related financial services. Its platform allows users to split purchases into interest-free installments or monthly payments with interest rates ranging from 0% to 36%.
On March 19, Goldman Sachs analyst Will Nance maintained a Buy rating on the stock, with a price target of $56. The company had a long-standing partnership with Walmart since 2019, allowing customers to split purchases into installments at Walmart stores and online. However, recently Klarna, one of the competitors of Affirm Holdings, Inc. (NASDAQ:AFRM) has replaced the company as Walmart’s exclusive installment loan provider. The analyst noted that Walmart contributed 5% to the company’s Gross Merchandise Volume and 2% of adjusted operating income over six months ending December 2024. This smaller-than-anticipated reliance reduces the immediate financial risk of losing exclusivity to Klarna.
Moreover, the partnership with Walmart faced lower profitability due to underwriting complexity and other commercial terms. Therefore despite the anticipated challenges due to the ending of this partnership, Goldman Sachs raised the company’s rating. The revised outlook reflects reduced operating income headwinds and confidence in the company’s ability to offset losses through diversified partnerships. It is one of the worst high-risk high-reward growth stocks to buy.
4. Dave Inc. (NASDAQ:DAVE)
Beta (5Y Monthly): 3.53
3-Year Sales Growth: 31.39%
Number of Hedge Fund Holders: 27
Analyst Upside Potential: 49.01%
Dave Inc. (NASDAQ:DAVE) operates as a neobank and fintech company focused on providing accessible financial services to underserved consumers. The company offers short-term, 0% interest loans up to $500 through its ExtraCash product. Moreover, it provides checking accounts with features like early direct deposit and automatic savings tools. It relies on AI-driven underwriting using transactional cash flow data to assess creditworthiness, enabling broader financial inclusion.
On May 7, Devin Ryan from JMP Securities reiterated a Buy rating on the stock, with a price target of $135. Dave Inc. (NASDAQ:DAVE) surpassed $100 million in quarterly revenue during the fiscal fourth quarter of 2024. The company also achieved over $30 million in quarterly adjusted EBITDA for the first time. Management noted that they improved credit underwriting using the V5 Cash AI model, which improved credit risk separation and reduced delinquency rates.
Looking ahead, management plans to sustain growth by expanding marketing investments while maintaining profitability. It also anticipates further ARPU growth in 2025 due to the new fee structure and increased engagement with ExtraCash and Dave Card. It is one of the worst high-risk high-reward growth stocks to buy.
3. Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM)
Beta (5Y Monthly): 2.3
3-Year Sales Growth: 245.54%
Number of Hedge Fund Holders: 39
Analyst Upside Potential: 47.12%
Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) is a commercial-stage biopharmaceutical company focused on developing precision therapies for rare genetic obesity disorders caused by melanocortin-4 receptor pathway deficiencies. It specializes in treating hyperphagia and severe obesity linked to rare genetic conditions.
On March 19, Needham analyst Alan Carr raised the price target on the stock from $64 to $66, while maintaining a Buy rating on the stock. The analyst cited optimism around the Phase 3 trial results for setmelanotide in Hypothalamic Obesity to be one of the reasons behind the increased rating. Topline data for the HO trial is expected in April 2025 (first half of 2025), positioning it as a near-term stock driver. Moreover, Carr’s bullish stance also stems from a review of existing clinical data and positive feedback from key opinion leaders, which suggest setmelanotide could achieve a 15–20% placebo-adjusted BMI reduction. Carr believes that a successful trial could drive a more than 20% stock surge, leveraging Rhythm Pharmaceuticals, Inc.’s (NASDAQ:RYTM) high volatility. It is one of the worst high-risk high-rewards growth stocks to buy.
2. SkyWater Technology, Inc. (NASDAQ:SKYT)
Beta (5Y Monthly): 3.38
3-Year Sales Growth: 28.09%
Number of Hedge Fund Holders: 19
Analyst Upside Potential: 42.52%
SkyWater Technology, Inc. (NASDAQ:SKYT) is a US-based semiconductor manufacturing and engineering company that operates as a pure-play technology foundry. It provides advanced semiconductor development and manufacturing services through its unique Technology-as-a-service model.
The company is making significant strides in expanding its role as a leading US-based semiconductor foundry. In fiscal 2024, the company achieved record revenues of $342 million, reflecting a 19% increase year-over-year. Growth was driven by its Advanced Technology Services business, particularly in aerospace, defense, and quantum computing markets. However, the Wafer Services revenue declined in 2024 due to weakness in the automotive and industrial sectors but is expected to rebound in 2025 with new products like ThermaView and ATS conversions.
In a major development, SkyWater Technology, Inc. (NASDAQ:SKYT) is acquiring Infineon’s Fab 25 in Austin, Texas, which is a high-volume 200-millimeter semiconductor manufacturing facility capable of producing over 30,000 wafers per month. The acquisition is expected to add approximately $300 million in annual Wafer Services revenue and diversify the company’s revenue mix between ATS and Wafer Services. It is one of the worst high-risk high-reward growth stocks to buy.
1. Twist Bioscience Corporation (NASDAQ:TWST)
Beta (5Y Monthly): 2.15
3-Year Sales Growth: 31.20%
Number of Hedge Fund Holders: 26
Analyst Upside Potential: 36.99%
Twist Bioscience Corporation (NASDAQ:TWST) is a synthetic biology and genomics company that has developed a proprietary DNA synthesis platform to industrialize the engineering of biology. The company’s core technology includes manufacturing synthetic DNA by writing it on a silicon chip. It is also exploring innovative applications like DNA-based digital data storage and biologics drug discovery.
On March 5, TD Cowen analyst Brendan Smith maintained a Buy rating on the stocks with a price target of $58. During the fiscal first quarter of 2025, Twist Bioscience Corporation (NASDAQ:TWST) reported a strong financial and operational performance, showcasing growth across its core business segments and advancements in its proprietary DNA synthesis platform. The company achieved $88.7 million in revenue for the quarter, marking a 24% year-over-year increase and 5% sequential growth. Moreover, the gross margins also improved significantly to 48.3%, up from 40.5% in the prior quarter. This growth was driven by higher volumes and cost-optimization efforts. In addition, approximately 75-80% of incremental revenue contributed directly to gross margin.
Looking ahead, it remains focused on achieving adjusted EBITDA breakeven without raising additional capital and while continuing to invest in profitable growth opportunities. It is the worst high-growth high-reward growth stock to buy.
While we acknowledge the potential of Twist Bioscience Corporation (NASDAQ:TWST) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TWST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
