(NASDAQ: VUZI), a maker of augmented reality (AR) glasses for enterprise clients and original equipment manufacturer (OEM) customers, took its investors on a wild ride over the past few years. On April 8, 2021, its stock closed at its all-time high of $30.57 a share, the result of a massive 1,870% rally over the previous 12 months. At its peak, its market cap hit $1.9 billion -- a whopping 146 times the revenue it would actually generate in 2021.

Vuzix's rally was driven by two catalysts. First, its annual revenue increased at a compound annual growth rate (CAGR) of 43% from 2016 to 2021, making it a popular target for the bulls during the buying frenzy in hypergrowth stocks, meme stocks, cryptocurrencies, and other speculative investments in 2021. Second, the growth of the metaverse market -- led by companies like Meta Platforms -- drove more investors to AR, VR, and metaverse-related stocks.

Image source: Vuzix.

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Source Fool.com