A 10 Bagger Like These Stocks May Never Happen Again

Felix & Friends (Goat Academy)•May 31, 2026

Summary

Felix presents a thesis that the "buy and hold" strategy is increasingly ineffective in a rapidly changing market, advocating instead for a "stock picker's" approach focused on small-cap companies (market caps between $1 billion and $10 billion). He emphasizes that 77% of S&P 500 gains are driven by only 12 stocks, suggesting that index investors are weighed down by underperformers. His strategy involves tracking four key themes: hard assets, defense (war stocks), quantum computing, and mental health. Felix looks for "event-driven" catalysts such as FDA approvals, government contracts, or technical milestones that can re-rate a stock's value within a 12-month window. He warns that these are high-risk speculations and should only occupy 1-3% of a total portfolio.

Rigetti Computing (RGTI): This company is vertically integrated with its own quantum chip fabrication facility and is set to launch a new, highly accurate chip called Lyra later this year. It has secured significant government contracts from the UK and India, though it faces risks related to low cash reserves. Felix views the 93% improvement in profit growth as a signal that the business is trending in the right direction despite its early stage.

D-Wave Quantum (QBTS): Specializing in quantum annealing for commercial optimization problems, D-Wave serves over 135 blue-chip customers like LG and Sharp. The company maintains impressive 65% gross margins and holds approximately eight years of cash on hand, making it a more stable option in the quantum sector. An upcoming investor day at the New York Stock Exchange in June serves as a major potential catalyst for the stock.

IonQ (IONQ): As a revenue leader in the quantum space with 400% year-over-year growth, IonQ is aggressively expanding through acquisitions like Skywater to become vertically integrated. It holds the rare DMEA Category 1 approval for military chip production and is guiding for over $200 million in revenue this year. While still losing money due to heavy R&D investment, Felix sees a clear path toward the kind of profitability that previously sent stocks like Palantir soaring.

Compass Pathways (CMPS): This mental health firm is developing synthetic psilocybin therapies for treatment-resistant depression and PTSD, currently navigating Phase 2 clinical trials. Felix explains that the stock is in the "disappointment" phase of the innovation curve, trading well below its highs, which offers a speculative entry point before potential FDA breakthroughs. Because it currently has no revenue, its success depends entirely on clinical trial outcomes.

Compass Minerals (CMP): Serving as a "hard asset" hedge against inflation, this company mines salt and specialty fertilizers with a unique physical moat in its Ontario and Utah operations. The company is currently cleaning up its balance sheet through debt restructuring and stands to benefit from rising global fertilizer prices. Felix notes that institutional money is beginning to flow into this $1 billion market cap company as a diversification away from AI risk.

Big Bear AI (BBAI): This company sits at the intersection of AI infrastructure and defense spending, providing analytics for national security and border control. It features a very small stock float, which creates high volatility and the potential for explosive price moves when new government contracts are announced. Felix suggests that while the business is riskier than Palantir, its low valuation gives it a higher statistical chance of a 10x return in the short term.