Thinking of a Lottery Ticket? Lucid Group Stock Looks Like a Better Bet

Key Points

• Tesla has shown the massive potential of an EV business.

• Lucid Group has the potential to replicate Tesla's success.

• 10 stocks we like better than Lucid Group ›

When you buy a lottery ticket, your expected return is almost negative. Put simply, the odds are against you, even if the potential payout is lucrative.

Investing in the stock market, on the other hand, rarely creates riches overnight. But over the long haul, stocks have shown the ability to grow your money by around 10% per year. With the magic of compound interest, even small sums can grow into impressive nest eggs.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Some stocks like the one discussed below can grow your money even faster. These investments have higher levels of risk, but they're still a wiser choice than a lottery ticket.

This growth stock is a better option than playing the lottery

Instead of buying a lottery ticket, buy a few shares of a high-risk, high-reward business like Lucid Group (NASDAQ: LCID). Tesla has already shown how large a successful electric car stock can become. Most of Tesla's revenue comes from car sales, helping its market cap surpass $1 trillion. Lucid, on the other hand, has a market cap of just $6.5 billion, creating lucrative potential upside.

How did Tesla grow so large? More than 90% of its car sales today come from just two models: The Model 3 and Model Y. Both have starting prices of less than $50,000. Getting cheap cars to the masses is critical for growth, and that's exactly what Lucid hopes to achieve next year with the launch of three new affordable models.

Image source: Getty Images.

I'm skeptical of Lucid's ability to execute. We haven't had a significant update on these new models for several quarters. And the company's financials make it difficult to scale production quickly. But that's why Lucid stock is priced at a discount. The company's upside is huge, but so is the risk. Still, investing in a business like this gives you superior odds versus a lottery system that is stacked against you from the start.

Should you invest $1,000 in Lucid Group right now?

Before you buy stock in Lucid Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lucid Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.