1. Enovix Corporation (NASDAQ:ENVX)
Number of Hedge Funds: 22
Analyst Upside Potential: 83.91%
Enovix Corporation (NASDAQ:ENVX) is a company that specializes in creating advanced lithium-ion batteries, particularly those using silicon technology. It develops lithium-ion batteries that use a unique silicon-based design. This design allows their batteries to hold more energy compared to traditional batteries, which typically use graphite. This feature makes their batteries suitable for high-performance devices like smartphones and electric vehicles (EVs) without compromising safety. They are building production plants in the US and have factories in Korea to manufacture these advanced batteries at scale.
The second quarter of fiscal 2024 came in with several key highlights for the company. Enovix Corporation (NASDAQ:ENVX) began producing its first batteries at its new facility in Malaysia, marking a crucial step in scaling its manufacturing capabilities. The company also signed several important agreements including a deal with a California-based technology company to supply silicon batteries for a mixed reality headset, a collaboration with a Fortune 200 company for batteries for an IoT product that has tens of millions of users, and an MOU with a global automotive manufacturer to adapt its battery technology for automotive applications.
Financially speaking, the company grew its revenue from $42,000 in Q2 of fiscal 2023 to $3.8 million in Q2 fiscal 2024. This revenue exceeded the mid-point of their forecast range of $3.0 million to $4.0 million. Looking ahead, the company is expecting revenues in the third quarter to be between $3.5 million and $4.5 million, with ongoing efforts to scale production and enhance customer qualifications.
It is the best industrial stock to buy according to analysts and was held by 22 hedge funds in Q2 2024, as per Insider Monkey’s database. Moreover, analysts’ 12-month median price target points towards an 83.91% upside from the current levels.
Massif Capital Real Assets Strategy stated the following regarding Enovix Corporation (NASDAQ:ENVX) in its Q2 2024 investor letter:
“Enovix Corporation (NASDAQ:ENVX): Enovix is perhaps a bit of an outlier in our portfolio given that it is a battery manufacturer selling into consumer goods markets, but it fits nicely in what we believe to be the Massif Capital analytical sweet spot, businesses where science/technology, geopolitics/geoeconomics and energy/materials overlap. While some would argue that Enovix is inappropriate for a liquid real asset portfolio, the traditional definition of real asset businesses is dated.
Traditionally, real asset businesses are those that own and operate real estate, infrastructure, and natural resource assets. While this definition is workable, and most of the companies we invest in fall into one of these categories, it does not consider the ever-growing role of applied physical sciences in specific manufacturing fields, nor does it take into account the growing importance of material sciences and the changing nature of energy in general. Enovix is a material sciences business aiming to transform an ever-growing list of unique, highly refined materials into energy storage devices. They create value by understanding materials’ physical and electrochemical properties better than others…” (Click here to read the full text)
While we acknowledge the potential of Enovix Corporation (NASDAQ:ENVX) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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