Investing is growth stocks is always a high-risk bet. Last year, the market decimated several growth stocks as the market euphoria waned.

Among these, there will be stories that never make a comeback. Extreme reactions result in markets offering quality growth stocks at a massive discount. I believe that amidst challenges, the current year is for the accumulation of fundamentally strong stories.

This column focuses on growth stocks to buy that have corrected by 50% or more in the last 12 months. However, I believe these stocks can rally by 100% to 200% in the next 24 months.

Even 100% returns over the next two years would be delightful. Investors need to be realistic in terms of expectations in relatively turbulent market conditions.

It’s worth mentioning that a pause in rate hike is likely. This is one trigger for the market turning bullish. Further, in a recession scenario, fiscal or monetary stimulus can act as a catalyst. Undervalued stocks are likely to rally in this scenario.

XPeng (XPEV)

XPeng (NYSE:XPEV), the Chinese electric vehicle maker, looks interesting from a valuation perspective. XPEV stock has corrected by 57% in the last year. However, the stock has been largely sideways for year-to-date 2023.

I expect a rally from current levels considering business developments.

In April, XPeng launched G6 SUV. The SUV pricing falls in the affordable EV territory and can be a catalyst for healthy deliveries growth. The initial impact is likely in the second half of 2023.

They launched the P7i sports sedan in March. The model has witnessed strong order intake. Once production is ramped-up, deliveries growth is likely to be supported. Therefore, there is a strong case for deliveries growth acceleration in 2023 and 2024, which is likely to take XPEV stock higher.

From a financial perspective, the compression in vehicle margin is a concern. However, once inflationary pressure declines, key margins are likely to improve. With XPeng having a cash buffer of $5.5 billion, there is flexibility to invest in innovation and expansion in Europe.

Tilray Brands (TLRY)

Tilray Brands (NASDAQ:TLRY) stock performance has reflected regulatory headwinds faced by the cannabis sector. TLRY stock is down by 52% in the last one year and seems massively undervalued at current levels.

Of course, a big catalyst for Tilray is federal level legalization of cannabis. However, the company can grow even if there is no legalization. The U.S. cannabis market should be worth $71 billion by 2030 without federal reforms. Investors, therefore, need to look beyond one catalyst.

Specific to Tilray, the company continues to expand presence in the U.S. and Europe through the organic and acquisition route. With two acquisitions, the company is already in the list of top producing craft brewers in the United States. These acquisitions boost the company’s strategic infrastructure in the region.

The company expects its key business units to be free cash flow positive in 2023. With revenue growth and operating leverage, cash flows are likely to accelerate in the coming years.

QuantumScape Corporation (QS)

QuantumScape (NYSE:QS) is another name among growth stocks to buy after a correction of 50% in one year. QS stock is higher by 8% for year-to-date, an sign that the worst of the correction is over.

As an overview, QuantumScape is developing solid-state lithium-metal batteries. Last year, QuantumScape shipped prototype cells for testing to prospective automotive and consumer electronics customers.

The initial results of validation testing have been in-line with expectations. This sets stage for further progress towards commercialization of solid-state batteries.

An important point to note is that Volkswagen (OTCMKTS:VWAGY) is a strategic investor and joint venture partner in the company.

The company claims to have six commercial agreements with automotive OEMs. With a strong partner and a pipeline of agreements, the outlook is bullish.

Of course, commercialization of solid-state batteries is still few years away. However, if positive results from research and development sustain, QS stock is poised to move meaningfully higher.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.