Diversification is an important part of any sound investment strategy.

In fact, it’s critical that a portfolio be well-balanced to help minimize risk and maximize opportunity.

While many investors follow that advice to determine which sectors are most appropriate for their situation, many don’t extend that advice to include an often-overlooked market segment, which includes “cheap” stocks.

In order to add true high upside potential to any sound, diversified portfolio, it’s important to consider investing a portion of that portfolio in “cheap” stocks that offer the potential for outsized returns. What follows is a list of the top 3 stocks – currently trading under $10 each – to consider adding to your portfolio.

As always, be sure to do your own due diligence before investing in any stock to make sure it’s right for your financial situation and that it is consistent with your acceptable level of risk.

Standard Lithium (SLI)

One of the hottest stories on the market is lithium.

After all, with accelerating demand for electric vehicles, and all things green, the world needs as much lithium as it can get its hands on. Only problem is supply cannot keep up with demand.

In fact, according to Stellantis CEO Carlos Tavares:

“We know that we need lithium. We know that we are not producing as much as we need. We have right now 1.3 billion cars (that are) internal combustion engines powered on the planet. We need to replace that with clean mobility. That will need a lot of lithium. Not only the lithium may not be enough, but the concentration of the mining of lithium may create other geopolitical issues,”

as quoted by The Detroit News

Also, according to Li-Bridge, global demand for lithium batteries is expected to jump five-fold by 2030, as noted by Reuters, which added, “Demand for lithium batteries in the United States is expected to grow more than six times.

That demand is why major auto companies, like Ford Motor just inked a supply deal with Albemarle. Even General Motors just invested $650 million into Lithium America’s Thacker Pass mine, which is one of the biggest lithium hotspots in the world.

While those two lithium stocks could see further upside, so could Standard Lithium (SLI), which recently said it found the “highest grade brine” in Arkansas.

Dr. Andy Robinson, President and COO of Standard Lithium commented, “We continue to be very pleasantly surprised by the lithium grades sampled from our projects in Arkansas and Texas. We previously developed the Preliminary Economic Assessment (PEA) for the SWA Project using a conservative assessment of the lithium brine grades across the project area. Using that conservative resource basis still yielded a PEA with very attractive project economics

Better, ExxonMobil just bought drilling rights to 120,000 gross acres in the Smackover Formation in southern Arkansas, near where Standard Lithium already operates.

Plus, according to The Wall Street Journal, Exxon just announced plans to build one of the world’s largest lithium processing facilities. In Arkansas, with a capacity to produce 75,000 to 100,000 metric tons a year of lithium, added Seeking Alpha.

That could also be interesting, in our opinion, for Standard Lithium.

SoundHound AI (SOUN)

By now, we’re sure you’ve heard about the artificial intelligence boom.

And the fact the AI market could be worth nearly $1.8 trillion in the next decade. And how AI is transforming just about every industry out there. And we’re sure you’ve seen the impact on stocks like Microsoft, which just announced AI for Microsoft 365, and Nvidia.

While those stocks could certainly see higher highs on the AI story, so could smaller AI stocks, like SoundHound AI (SOUN), an audio and speech recognition company that has a good deal of AI-catalysts, too. For one, it’s working with the auto industry to put voice assistants into vehicles. Two, the company is already seeing big demand for conversational AI. Plus, it’s working with Oracle to put voice AI technology into restaurants.

Also, “The incredible surge in demand for conversational AI is giving SoundHound a unique advantage. As an established innovator with years of experience providing AI solutions to world class brands, we’re fast becoming an obvious partner for businesses looking to harness emerging capabilities,” said Keyvan Mohajer, CEO and Co-Founder of SoundHound. “Our SoundHound Chat AI platform now offers the most powerful voice assistant available today, and it’s one of many ways we’re helping new and existing customers build game-changing consumer experiences.”

Earnings have also been impressive.

First quarter revenues were up 56% year over year to $6.7 million. Gross margins were up to 71% from 59%. EPS was a loss of 13 cents, but improved year over year, and sequentially. Q1 adjusted EBITDA was a loss of $14.8 million, a 21% year over year improvement. Going forward, SoundHound expects. for 2023 revenue to be in a range of $43 to $50 million. It also expects to be adjusted EBITDA positive in the fourth quarter of 2023.

Ballard Power Systems (BLDP)

Or, take a look at Ballard Power Systems (BLDP), a hydrogen fuel company that recently announced plans to cut costs and boost production.

It also announced new “disruptive manufacturing technology,” which it says could increase its manufacturing of hydrogen fuel cells by ten times. Also, most recently it announced a deal to supply global carbon reduction company First Mode with 60 hydrogen fuel cell modules by 2024. It also announced a 3.6 megawatts (MW) of fuel cell systems order from a European provider of clean energy solutions for critical stationary power applications.

And while company earnings and its forecast are nothing to write home about, give it time. BLDP will be a big part of the hydrogen growth story.

In its most recent quarter, total revenue was down 37% year over year. Adjusted EBITDA was negative $38.3 million, as compared to negative $27.5 million year over year. However, it did see a good deal of news orders from Europe and North America in the bus and stationary power markets.

Again, those aren’t great numbers. But we have to consider BLDP will be part of the larger multi trillion-dollar hydrogen market boom. Another reason to like hydrogen stocks, like BLDP, is Goldman Sachs’ estimate that the hydrogen market could be worth $12 trillion by 2050.

Helping, there’s also the Inflation Reduction Act, which has tax credits for hydrogen. In fact, “Under the law, renewable electricity and clean hydrogen plants in 2023 can receive a production tax credit of 2.6 cents per kWh and up to $3 per kg of hydrogen, respectively, for the first 10 years of operation,” as noted by The International Council on Clean Transportation.

In addition, according to the International Energy Agency, global hydrogen demand will need to double from about 94Mt in 2021 to more than 180 by 2030. That’s all great news for companies, like Ballard Power over the long-term.