No matter how confident I might be about investing in a particular growth stock, I would never invest 100% of my money in one stock. Diversification is an essential pillar of my investing strategy because it protects my portfolio from the possibility of a devastating company-specific event.

But what if I narrow myself to buying one UK growth share? With so many options available to investors, it is hard to choose one company over all the others. I was curious if ChatGPT had a spectacular suggestion that I might have missed.

Growth genetics

The AI-powered chatbot started with boilerplate language warning against going all in on one growth stock, describing it as: “extremely risky“I agree. But it fit my crazy idea of ​​choosing Oxford Biomedica (LSE:OXB) as a standout stock worth considering.

I have to admit that’s all I came across FTSE250 gene and cell therapy activities that ended before the pandemic. In 2020, the company signed a significant production agreement with AstraZeneca for the production of vaccines for Covid-19. Of course, ChatGPT’s answer encouraged me to look deeper.

The company, which now trades as OXB, began as a spin-out company at the University of Oxford in 1995. Today it is a pure contract development and manufacturing organization (CDMO).

This means OXB specialists carry out complicated laboratory work and large-scale production so that customers don’t have to. The company serves the largest pharmaceutical concerns, including: Novartis AND Bristol Myers Squibbthrough the production of viral vectors and gene therapy components.

Risk and reward

The biotech sector has suffered in the post-pandemic world, and OXB was no exception. The company’s share price has still fallen by almost 40% in five years. However, this year has been more promising, with shares rising from 420p in January to over 600p today.

Recent results indicate a positive trajectory. In the first half of FY25, revenues increased by 44% to £73.2m and the group’s order book skyrocketed by 166% to £149m.

It is still a loss-making company, which poses a risk for investors given that the £728m valuation is based on the company’s future potential. However, pre-tax losses narrowed to £26m from £35.7m, so the direction is looking good.

Increasing production capacity is a top priority for OXB. These ambitions were significantly boosted by a successful £60 million fundraising earlier this year. In October, the company used a portion of those funds to purchase an FDA-approved commercial-scale viral vector manufacturing facility in North Carolina, which is expected to be fully operational in early 2026.

The investment opportunity in OXB stock should be weighed against a price-to-sales (P/S) ratio above 4 and a price-to-book (P/B) ratio above 22. While growth stocks in the biotech sector often have higher valuation multiples, I believe these numbers leave little room for error. Any failure in clinical trials or the loss of a key customer could cause the stock price to decline.

My view

Growth stock champion ChatGPT was an engaging pick, but it wouldn’t be my number one pick. Anyway, I’m already invested in AstraZeneca, so I won’t be buying OXB stock today. Diversification matters and I don’t want too much exposure to biotech in my portfolio. However, I will be watching this company closely to see if it can realize its potential.