In this article, we will discuss the 10 Stocks with Potential to Explode in 2025.
The recent pullback in US equities can be a sign of an aging bull market and a reaction to developments happening around trade policy, as per Jurrien Timmer, Director of Global Macro for Fidelity Management & Research Company. Corrections and volatility are the factors investors need to consider to capture any sort of long-term market returns. The current volatility has got many investors worried regarding the prospects of losing their gains.
Pullbacks Are Part and Parcel
As of March 11, the S&P 500 Index declined 9.3% from its all-time closing high it touched in mid-February, says Timmer. According to him, the market has seen a decline of 5% or more in 93% of calendar years since the year 1980, and it has suffered a 10% or more drop in 47% over the same calendar years. Yet, its average calendar-year return over a similar period has been ~13.3%. This means that pullbacks are quite common in the equity markets. The broader market has seen recovery from every one of those periods and has delivered healthy long-term returns.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Expert’s Views on Current Market Dynamics
Timmer opines that bull markets generally take place when there are expectations that the news can’t get any worse. The markets are forward-looking, meaning that stocks always showcase the expectations regarding the future. Even if the current news is not favorable, if investors think that tomorrow’s news will be less bad, the prices might start to increase. In this stage, the market continues to increase despite a decline in profits or earnings. This reflects that the higher P/E ratios have been fueling the market. After 2 – 4 quarters, the profits start to show up. Now, as the bull market matures, earnings growth tends to take charge, with the PE ratios beginning to decline.
As per Timmer, the market investors are in this environment. The earnings growth remains in the double digits, but since investors are getting into the later innings of the bull market, the P/E ratios have now been stretched. The broader market is slightly more prone to fluctuations or volatility. Apart from these trends, the market continues to process the impact of current trade policy shifts. Overall, Timmer said that across all different cycles, booms, crises, and busts, the markets eventually recovered and touched new all-time highs.
With this viewpoint, let us now have a look at the 10 Stocks with Potential to Explode in 2025.
Our Methodology
To list the 10 Stocks with Potential to Explode in 2025, we sifted through several online rankings to shortlist the stocks that analysts see significant upside to, as of March 18. Next, we mentioned hedge fund sentiment around each stock, as of Q4 2024. Finally, the stocks were arranged in ascending order of their hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Stocks with Potential to Explode in 2025
10. ORIX Corporation (NYSE:IX)
Average Upside Potential: ~510.7%
Number of Hedge Fund Holders: 7
ORIX Corporation (NYSE:IX) is engaged in providing diversified financial services. Analyst Natsumu Tsujino of Bank of America Securities maintained a “Hold” rating on the company’s stock. The rating is backed by a combination of factors highlighting the company’s current strategic direction and financial targets. As per the analyst, ORIX Corporation (NYSE:IX)’s strategic focus on business solutions and alternative investments offers both opportunities and challenges. The company continues to leverage its corporate finance customer base in a bid to enhance its business problem-solving services. Furthermore, the analyst believes that the company’s plans to improve its assets under management and invest in growth sectors as well as technology acquisitions remain promising, but the impact is yet to be seen.
Within the 3 categories, ORIX Corporation (NYSE:IX) expects stable “Finance” earnings to be aided by changes in the macro climate, a recovery in domestic businesses and asset management in Europe can support growth in “Operation,” while further promotion of capital recycling can fuel healthier profit margins in the “Investments” category. Notably, total revenues for the 9 months ended December 31, 2024 went up by 5% to ¥2,154,484 million versus ¥2,043,756 million during the same period of the previous fiscal year. This was mainly aided by higher operating lease revenues and services income, partially offset by lower finance revenues.
9. Diversified Energy Company PLC (NYSE:DEC)
Average Upside Potential: ~108.2%
Number of Hedge Fund Holders: 11
Diversified Energy Company PLC (NYSE:DEC) operates as an independent owner and operator of producing natural gas and oil wells. The company’s unique operational framework, strategic development partnerships, and growing adjacent business segments are expected to fuel long-term growth. Through completing more than $4.0 billion of acquisitions since its public listing in 2017, Diversified Energy Company PLC (NYSE:DEC) built a large-scale integration and operating company focused on delivering de-risked, reliable cash flow for its shareholders.
Given that most upstream acquisitions focus on increasing undeveloped inventory, Diversified Energy Company PLC (NYSE:DEC) offers a creative and actionable solution as the PDP purchasing partner for E&P’s that value inventory. The company has announced the closing of a transformative $1.3 billion acquisition of Maverick Natural Resources. Diversified Energy Company PLC (NYSE:DEC) expects to achieve more than $50 million in annual synergies by year-end 2025. The strategic acquisition can increase the company’s revenue and FCF while improving its margins and achieving expense synergies. Furthermore, it also closed the accretive bolt-on acquisition of assets from Summit Natural Resources and expects more than a 300% increase in cash flow from CMM environmental credit sales over the next 24 months.
8. MicroStrategy Incorporated (NASDAQ:MSTR)
Average Upside Potential: ~116.5%
Number of Hedge Fund Holders: 44
MicroStrategy Incorporated (NASDAQ:MSTR), doing business as Strategy, is engaged in providing AI-powered enterprise analytics software and services. The company announced that it intends to offer 5,000,000 shares of the company’s Series A Perpetual Strife Preferred Stock. It plans to use the net proceeds from the offering for general corporate purposes, which include the acquisition of Bitcoin and for working capital. On March 17, MicroStrategy Incorporated (NASDAQ:MSTR) announced that, during the period between March 10, 2025 and March 16, 2025, it acquired ~130 bitcoins for approximately $10.7 million in cash, at an average price of ~$82,981 per bitcoin. This includes fees and expenses.
MicroStrategy Incorporated (NASDAQ:MSTR)’s Bitcoin acquisition strategy continues to be aided by a series of capital-raising activities. The company has been successful in leveraging favorable market conditions and investor interest in a bid to finance the Bitcoin purchases. Overall, MicroStrategy Incorporated (NASDAQ:MSTR)’s ability to garner capital at scale for Bitcoin acquisition is being regarded as a positive indicator of strategic execution. Maxim upped the company’s price target to $500 from $480, keeping a “Buy” rating after it announced a rebranding to the name Strategy, which the firm opines is better aligned with the company’s dual focus as a bitcoin treasury company and a business intelligence software company.
Greenlight Capital, an investment management firm, published the Q4 2024 investor letter. Here is what the fund said:
“There is an open debate as to whether Bitcoin will at some point enter the mainstream as an official currency. In fact, there is a bill before Congress for the U.S. to establish a “Strategic Bitcoin Reserve” and buy one million Bitcoins over five years. The bill’s purpose appears to be the use of public funds to ramp up the price of Bitcoin, thereby enhancing the wealth of existing Bitcoin holders. This seems a dubious use of taxpayer funds, but the new administration has a lot of Bitcoin-owning supporters, so it might happen. More likely, cooler heads will decide that the government should not borrow another trillion dollars in the bond market to speculate in Bitcoin and that there is, in fact, nothing strategic about doing so.
One of the biggest owners of Bitcoin is MicroStrategy Incorporated (NASDAQ:MSTR). While MSTR owns a small software business, its principal pursuit is buying Bitcoin. In practice, MSTR is an investment company that buys and holds Bitcoin.2 MSTR trades at a large premium to the value of the underlying Bitcoin it holds. The idea is to raise money from new investors at a premium and use the proceeds to buy more Bitcoin. Since the Bitcoin that MSTR buys costs less than the Bitcoin-implied value of MSTR’s stock, the new investment is dilutive to new investors but accretive to existing investors. MSTR’s promoters have labeled the return to existing investors created by this scheme the “Bitcoin yield”. As Bitcoin itself yields nothing, the Bitcoin yield is simply a measure of the Ponzi finance’s effectiveness. Lately, it has been pretty effective.”
7. Moderna, Inc. (NASDAQ:MRNA)
Average Upside Potential: ~105.1%
Number of Hedge Fund Holders: 44
Moderna, Inc. (NASDAQ:MRNA) is a biotechnology company, which is engaged in providing messenger RNA medicines in the US, Europe, and internationally. The company has made progress in 2024 through its late-stage pipeline and cost-reduction efforts. Its team successfully filed 3 Biologics License Applications in the final months of the year and decreased its costs by 27% as compared to 2023. Entering 2025, Moderna, Inc. (NASDAQ:MRNA) remains focused on fueling sales, providing up to 10 product approvals through 2027, and expanding the cost efficiencies throughout the business. By the end of 2025, the company targets removing ~$1 billion in costs.
Given the healthy momentum in its late-stage pipeline, Moderna, Inc. (NASDAQ:MRNA) expects multiple approvals starting this year, together with key Phase 3 readouts that can support its long-term growth. Coming to the respiratory vaccines, the company has shared positive Phase 3 vaccine efficacy and immunogenicity data for its next-generation COVID-19 vaccine (mRNA-1283). Moderna, Inc. (NASDAQ:MRNA) filed for regulatory approval of mRNA-1283 with the FDA through a priority review voucher. The FDA accepted the company’s Biologics License Application (BLA) for mRNA-1283 and has assigned a Prescription Drug User Fee Act (PDUFA) goal date of May 31, 2025. Moderna, Inc. (NASDAQ:MRNA) has also received regulatory approval for its RSV (Respiratory syncytial virus) vaccine mRESVIA (mRNA-1345) for adults aged 60 years and older in 2024. It shared positive Phase 3 data for mRNA-1345 in high-risk adults aged 18-59.
6. The Trade Desk, Inc. (NASDAQ:TTD)
Average Upside Potential: ~101.9%
Number of Hedge Fund Holders: 63
The Trade Desk, Inc. (NASDAQ:TTD) operates as a technology company. Truist Securities expressed its confidence in the company’s stock, maintaining a “Buy” rating and a price objective of $130.00. As per the analyst, the issues with Kokai remain temporary instead of structural, with anticipations for quicker adoption improvement. The analyst has also acknowledged Amazon’s DSP as a rising competitor in the broader advertising technology space. That being said, The Trade Desk, Inc. (NASDAQ:TTD)’s strong return on ad spend performance, independence, cross-channel capabilities, and customer service are expected to allow it to succeed alongside Amazon.
Overall, the firm’s rating and price target stems from the belief in The Trade Desk, Inc. (NASDAQ:TTD)’s ability to overcome current challenges as well as to continue to thrive in the competitive digital advertising landscape. Notably, the company outpaced nearly every segment of digital advertising in 2024, delivering $2.4 billion of revenue, exhibiting accelerated growth of 26% YoY as well as a record $12 billion of spending on its platform.
Rowan Street Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“The Trade Desk (TTD): Investment Initiated: March 2020
Internal Rate of Return (IRR): 54%
The Trade Desk has been our most successful investment to date. March 2025 will mark five years since we opportunistically initiated our position at a cost basis of $17.40 (split-adjusted). Since then, TTD has appreciated more than sevenfold, delivering an annualized return of approximately 54%.
These exceptional results far outpace the company’s strong fundamental growth, with revenues and earnings compounding at approximately 25% annually over this period (refer to the table below). The primary reason for this outsized return lies in the price at which we were able to acquire TTD during the early days of the pandemic, when market fears briefly drove it down to just 10x revenues. Today, the valuation has expanded significantly to approximately 25x revenues, amplifying our returns…” (Click here to read the full text)
5. First Solar, Inc. (NASDAQ:FSLR)
Average Upside Potential: ~113.2%
Number of Hedge Fund Holders: 65
First Solar, Inc. (NASDAQ:FSLR) is a solar technology company that provides photovoltaic (PV) solar energy solutions. Analyst Ameet Thakkar from BMO Capital reiterated a “Buy” rating on the company’s stock. The analyst’s rating is backed by factors that demonstrate the company’s potential for growth and value. The positive revenue outlook is expected to ease the pressure on its stock price in the short term. As per the analyst, the factors impacting the margins are temporary. First Solar, Inc. (NASDAQ:FSLR)’s strategic position as the leading US solar module producer under the IRA provides several advantages, such as higher earnings potential and backlog growth.
Elsewhere, Jeff Osborne, an analyst from TD Cowen, maintained a “Buy” rating on the company’s stock with the associated price target of $275.00. The rating stems from the factors showcasing growth potential and stability. The analyst has highlighted the importance of First Solar, Inc. (NASDAQ:FSLR)’s progress in improving its manufacturing capacity, mainly in the US. Notably, strong domestic content requirements in the US solar market can benefit First Solar, Inc. (NASDAQ:FSLR) considering its healthy US manufacturing presence. Despite maintaining a highly selective approach to bookings, the company expanded its manufacturing capacity by commissioning the Alabama facility and progressed construction of its new Louisiana facility. Furthermore, First Solar, Inc. (NASDAQ:FSLR) established the infrastructure it expects will accelerate innovation with a new R&D center in Ohio.
4. Coinbase Global, Inc. (NASDAQ:COIN)
Average Upside Potential: ~89%
Number of Hedge Fund Holders: 69
Coinbase Global, Inc. (NASDAQ:COIN) operates the platform for crypto assets in the US and internationally. Bernstein initiated coverage of the company’s stock with an “Outperform” rating and a price objective of $310. The firm anticipates that strong regulatory tailwinds are expected to fuel the crypto industry to the American financial mainstream. The firm’s analysts opine that Coinbase Global, Inc. (NASDAQ:COIN) remains well-placed to benefit from the shifting regulatory landscape under the new administration.
While Bernstein acknowledged the challenges related to the growing competition from fintech firms, brokers, and banks, the analysts led by Gautam Chhugani believe that a robust bull market as well as higher US onshore dominance are expected to more than offset the pressures. Furthermore, regulatory uncertainty was a thorn in the crypto industry’s side, but this can change quickly. The firm hinted at Donald Trump’s commitment, which can act as a tailwind for Coinbase Global, Inc. (NASDAQ:COIN). Notably, the analysts expect growth in the non-trading revenues, which can help balance the volatility of trading revenue.
Patient Capital Management, a value investing firm, released the Q4 2024 investor letter. Here is what the fund said:
“The top performers in the fourth quarter were once again Financials and Travel names. We’ve been over-indexed to them since the pandemic, which has served us well. We strategically added to certain financial names like Sofi Technologies (SOFI) and Coinbase Global, Inc. (NASDAQ:COIN) during the year. Both companies rebounded strongly in the fourth quarter. We believe Coinbase is building the platform for the crypto ecosystem. Certain recent advances (wallet, base improvements, USD Coin) could cause an adoption tipping point. We like that Coinbase continues to widen its moat by persistently investing in innovation.”
3. MongoDB, Inc. (NASDAQ:MDB)
Average Upside Potential: ~108.1%
Number of Hedge Fund Holders: 70
MongoDB, Inc. (NASDAQ:MDB) is a software company that is engaged in developing and providing MongoDB, a popular NoSQL database that has been designed for flexibility, scalability, and performance. Citi has maintained a “Buy” rating on the company’s shares with a price target of $430. As per the firm, it posted healthy quarterly results, showcasing improvements in Atlas consumption, despite the quarter being overshadowed by a more conservative fiscal 2026 guidance. MongoDB, Inc. (NASDAQ:MDB) delivered a healthy end to fiscal 2025, with 24% Atlas revenue growth and significant margin expansion. In fiscal year 2026, the company expects to see stable consumption growth in Atlas, its main growth driver.
MongoDB, Inc. (NASDAQ:MDB) has acquired Voyage AI, which is a pioneer in state-of-the-art embedding and reranking models powering next-gen AI applications. The integration of Voyage AI’s technology with the company is expected to enable organizations to easily build trustworthy, AI-powered applications by providing highly accurate and relevant information retrieval deeply integrated with operational data. MongoDB, Inc. (NASDAQ:MDB) highlighted that Voyage AI’s advanced embedding and reranking models allow applications to extract meaning from highly specialized as well as domain-specific text and unstructured data—spanning across legal and financial documents to images, code, and enterprise knowledge bases.
Montaka Global Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“While the bulk of MongoDB, Inc.’s (NASDAQ:MDB) portfolio exposures continued to remain relatively stable over the December quarter, we did undertake some modest hands-on portfolio management in the tail-end of the portfolio.
We exited three of Montaka’s smallest portfolio names. While we see long-term upside in all of these names, we see more upside elsewhere. Hence, we reallocated these proceeds to (i) scale up Montaka’s investment in Alphabet on increased probabilities that its advantages in Google Search are strengthening (not to mention the group’s numerous growth options increasing in probability – from YouTube, to Waymo, and even quantum computing); and (ii) to establish an initial ‘outlier’ position in database software provider, MongoDB (MDB).
We view outliers as ‘option-like’ in that their upside potential is very large, but the probability is far less certain. On this basis, we deliberately restrict Montaka’s aggregate portfolio allocation to outliers – which currently stands at less than 7%. The remaining 93% of Montaka’s portfolio is allocated to businesses we classify as ‘compounders’.
As a database provider for large production-ready applications, MDB has suffered of late because software developers have overwhelmingly focused on small, experimental AI-based ‘proof of concepts’ rather than production deployments. We expect this cycle to turn in 2025 and beyond, and it’s possible (though not certain) that demand for MDB accelerates materially…” (Click here to read the full text)
2. Reddit, Inc. (NYSE:RDDT)
Average Upside Potential: ~91%
Number of Hedge Fund Holders: 87
Reddit, Inc. (NYSE:RDDT) operates a digital community in the US and internationally. The company’s investments in AI and ML can fuel future growth throughout multiple aspects of its business. Talking about user engagement, AI-powered features such as Reddit Answers, and better content recommendation algorithms are expected to improve user experience, resulting in higher time spent on the platform and increased retention rates. Therefore, the enhanced engagement can make Reddit, Inc. (NYSE:RDDT) more attractive to advertisers.
Furthermore, the company continues to leverage machine translation technology in a bid to expand its reach. This international push is expected to fuel strong user growth and engagement in the coming years. Reddit, Inc. (NYSE:RDDT) continues to roll out new ad formats as well as tools to attract advertisers and improve ad performance. These consist of dynamic product ads, video ads, and improved targeting capabilities. Furthermore, the expansion of its direct sales efforts and improving the self-serve advertising platform can aid adoption.
Columbia Threadneedle Investments, an investment management company released its Q4 2024 investor letter. Here is what the fund said:
“Reddit, Inc. (NYSE:RDDT) was the single best-performing stock for the fund, as the stock surged during the quarter, with significant outperformance following its stellar quarterly earnings release. The capital-light social news aggregation platform — and the ninth most-visited website in the world — reported quarterly revenue, user growth and profit margins that came in considerably higher than even the most bullish of estimates, and the company also provided forward-looking guidance that came in well ahead of expectations on most metrics. After earlier announcing a data licensing partnership with AI pioneer OpenAI, investors ‘up-voted’ the evolving AI narrative for Reddit after gaining a better understanding of its unique and hard-to-replicate trove of content generated by its growing and increasingly global user base.”
1. Marvell Technology, Inc. (NASDAQ:MRVL)
Average Upside Potential: ~92.3%
Number of Hedge Fund Holders: 105
Marvell Technology, Inc. (NASDAQ:MRVL) offers data infrastructure semiconductor solutions, spanning the data center core to the network edge. Fitch Ratings believes that the hyperscaler demand for DC products, mainly AI infrastructure, is expected to fuel healthy revenue growth for the company over the medium term despite mixed demand in non-DC end markets. The spending by hyperscalers on AI infrastructure is expected to remain strong with Marvell Technology, Inc. (NASDAQ:MRVL)’s differentiated product platforms fueling share gains.
Design win momentum, strengthened by Marvell Technology, Inc. (NASDAQ:MRVL)’s significant expansion of its relationship with AWS, affirms the strength of the company’s unified DC interconnect, switching, and compute portfolio, and can drive revenue growth, says Fitch Ratings. Notably, structural profit margin expansion cements the company’s FCF profile. Elsewhere, analyst Vivek Arya of Bank of America Securities maintained a “Buy” rating on the company’s stock, maintaining a price objective of $120.00. The rating is backed by factors demonstrating Marvell Technology, Inc. (NASDAQ:MRVL)’s healthy position in the AI and data center markets.
Artisan Partners, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Among our top Q4 contributors were Atlassian, Spotify and Marvell Technology, Inc. (NASDAQ:MRVL). Marvell Technology is a semiconductor company offering networking, secure data processing and storage solutions to customers worldwide. We believe Marvell has among the broadest range of intellectual property in technological areas (e.g., high-bandwidth data switching and storage applications) that position it well for the growing requirements of data centers, wireless networks and autos. The company delivered strong earnings results, driven by the company’s product lines (e.g., custom silicon, optical connectivity and switching) leveraged to AI data center growth. We believe this could be a significant opportunity for the company as it helps design and manufacture cost-effective custom data center chips that would help reduce cloud providers’ reliance on expensive GPUs. Furthermore, like many other semiconductor companies, a portion of its business may be poised for a cyclical recovery after the industry’s recent inventory correction.”
While we acknowledge the potential of MRVL as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than MRVL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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