Shares of the e-commerce giant Amazon cost more than $3,000 for a single share, but they were under $10 when the dot-com bubble burst in the early 2000s. The bottom line is, even companies that grow to be massive, like Amazon, usually start much smaller.
While history doesn't really repeat, it often rhymes. There are probably quite a few potential "Amazons" out there, trading at really low prices. Below are three companies that I'm currently excited about, and here's the kicker: You can have them for less than $20 per share, which is affordable for most people.
So when you grab a $20 bill to pay for a dinner on the go this week, think about putting that money into one of these three potential winners.
1. SoFi Technologies
Banking is a massive and old industry that goes back centuries. However, there's been a lot of innovation within the financial sector in recent years. Reimagining consumer banking is part of that, which is where SoFi Technologies ( SOFI 1.07% ) comes in. SoFi started as a company refinancing student loans, but it's become much more than that.
The company's "super-app" offers its users various financial services, like money transfers, investing, borrowing, banking, and savings, all in one smartphone app. This creates convenience for users and lowers customer acquisition costs for SoFi because it costs nothing for a user to go from using one service on its app to multiple services. SoFi also acquired Galileo in 2020 for $1.2 billion, a technology platform that helps create digital payment cards and banking products.
SoFi recently received regulatory approval to become a national bank, which will let the company finance its loans with user deposits, lowering its own cost of capital and increasing its profitability. The company produced $1.0 billion in revenue in 2021, and as its vision for becoming a conglomerate of fintech services becomes a reality, SoFi could continue growing for years to come.
2. Palantir Technologies
A mathematician in the United Kingdom once said that "data is the new oil. Like oil, data is valuable, but if unrefined, it cannot be used." Data analytics company Palantir Technologies ( PLTR 1.59% ) addresses this very problem. Its two software platforms, Foundry and Gotham, build custom solutions for its clients to analyze data to help make actionable decisions, discover trends, and aid human analysts. The company itself believes in "augmenting human intelligence, not replacing it."
Palantir started in the early 2000s, first gaining traction with the United States government. A variety of agencies in the government use Palantir, including Homeland Security, Defense, and more. Palantir has expanded into the private sector to work with companies, but the government remains Palantir's largest customer, contributing 58% of revenue in 2021.
Even though revenue from commercial accounts grew just 31% in 2021 compared to government revenue's 47% increase, the number of Palantir's commercial clients tripled during the year. This could lead to solid revenue growth down the road because the company has a multi-phase selling process that generates revenue once its software becomes mission-critical for its customers.
3. Amplitude
Amplitude ( AMPL -1.66% ) is the self-proclaimed pioneer of "digital optimization," in which data proactively drives how companies make decisions instead of reacting to what's already happened. Amplitude has gotten traction with its business with approximately 1,597 paying members as of the end of 2021, a 54% year-over-year increase.
Amplitude works with some high-profile customers, including Anheuser-Busch InBev, Atlassian, and Ford. It's also scored recent customer wins, including Toyota, Twilio, and Taco Bell in the fourth quarter alone. Founder and CEO Spenser Skates is in his early 30s, so it can be hard to immediately trust a young company with an unproven CEO bringing a new type of software to market. These notable customer wins could help show some credibility to investors.
The company's net revenue retention rate (NRR) is 123%, implying that customers tend to spend more money on the product over time. This and Amplitude's impressive customer list is exciting for the company's long-term prospects. At the same time, the stock recently plummeted, falling more than 50% since its Q4 2021 earnings report due to the company calling for 2022 revenue growth of just 35% to 40%, a notable slow-down from 2021 when revenue grew 63% year over year. Management attributed the softer guidance to 2021 being a stronger-than-average year for the company. Investors will need to see how Amplitude executes over the next several quarters, but the stock's dramatic decline should help compensate investors for these short-term question marks.