On January 8, Rashaun Williams, Atlanta Falcons limited partner and venture capitalist, joined “Closing Bell” on CNBC to discuss his investment strategy and his outlook on the IPO market as 2025 began. He acknowledged the high expectations for a revival in the tech sector’s IPO activity but noted that such optimism required multiple factors to align perfectly, something that had not yet occurred. Despite this, he emphasized the importance of holding onto optimism, as the tech IPO market continues driving innovation and economic growth. Williams highlighted that while the primary IPO market faced challenges, the secondary market had gained prominence, which provided liquidity for founders and employees. This ensured that companies could sustain themselves through downturns.
Williams also discussed his perspective as an alternative investment manager and noted a shift in investor interest toward alternative assets. Over the past year, he observed heightened enthusiasm for late-stage tech companies, particularly those focused on AI and cybersecurity. These sectors have been pivotal in driving activity within his portfolio and funds. He emphasized that late-stage AI companies are generating substantial interest due to their transformative potential and alignment with current technological trends.
On the same day, Keith Fitz-Gerald, principal of Fitz-Gerald Group, also appeared on CNBC on ‘The Exchange’ to discuss his bullish case for tech. As 2025 began, the tech sector experienced a notable decline, with the NASDAQ 100 falling 1.5%, largely due to NVIDIA’s 5% drop, which shaved 90 points off the index. Despite this, Fitz-Gerald viewed the downturn as an opportunity. He highlighted the imminent monetization of AI and described the recent rally as child’s play, and predicted that the S&P 500 could exceed 7,000 by midyear, which was a bold claim grounded in his belief in the strength of US-based AI companies with dominant market positions and profit margins.
On concerns about high valuations, he acknowledged historical trends linking elevated P/E ratios to lower returns but argued that this is misleading for digital companies. He explained that businesses benefiting from economies of scale, like those in AI, naturally exhibit higher P/E ratios due to minimal costs for acquiring incremental customers. This signal strength rather than overvaluation. He dismissed concerns about the current market softness and characterized it as a technical sell-off due to large traders reallocating funds rather than a reflection of weak fundamentals. He said that AI’s expansion and the trillions being invested into it mark only the beginning of a transformative era for tech.
As experts remain confident in the potential of tech as well as the IPO market going into 2025, we’re here with a list of the 15 best new tech stocks to invest in.
Methodology
We first used the Finviz stock screener to look for companies that went public in the past 3 years. We sorted our screen by IPO date and market cap and looked through the top 35 stocks that recently went public and are trading at a valuation of over $1 billion. We then selected 15 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
15 Best New Tech Stocks To Invest In
15. Nayax Ltd. (NASDAQ:NYAX)
Market Capitalization as of January 21: $1.3 billion
Number of Hedge Fund Holders: 3
Nayax Ltd. (NASDAQ:NYAX) is a global fintech company that provides payment solutions and management platforms to industries like vending, retail, and EV charging. It offers hardware, software, and mobile applications, which enable businesses to streamline operations and enhance customer engagement.
The company achieved a record revenue of $83 million in Q3 2024, recording a 38% year-over-year increase. This was fueled by expansion among new and existing customers. The recurring revenue surged 49% due to strong customer retention and increasing transaction value. Nayax Ltd. (NASDAQ:NYAX) added ~91,000 customers in the quarter, while its installed base of managed and connected devices grew to 1,230,000, a 40% year-over-year increase. The company anticipates reaching its medium-term revenue growth target of 35% due to its customer-centric approach.
It’s also set to unveil its “Retail Your Way” initiative at the upcoming NRF 2025 retail industry conference. This underscores its dedication to scalability, customer-centricity, and flexibility. Since acquiring Retail Pro International, it has enhanced its retail offerings with flexible on-premise and cloud-based architecture, innovative marketing tools, and advanced loyalty programs. On January 19, Jefferies analyst Hannes Leitner upgraded Nayax Ltd. (NASDAQ:NYAX) to Buy, while KBW maintained its Buy rating on January 6, with a price target of $33.00.
14. Life360 Inc. (NASDAQ:LIF)
Market Capitalization as of January 21: $3.24 billion
Number of Hedge Fund Holders: 10
Life360 Inc. (NASDAQ:LIF) is a location technology platform that connects people, pets, and belongings globally. Its freemium mobile app offers basic tracking, while premium plans add safety features, driving insights, and emergency assistance. It expands its location tracking services by selling complementary hardware like Tile trackers and Jiobit wearables.
The company reported record Q3 2024 results due to the growth in subscriptions and advertising. Its Monthly Active Users (MAUs) grew 32% year-over-year to 76.9 million, and Paying Circles increased by 159,000, a 35% rise. Subscription revenue rose 27% to $71.8 million. Life360 Inc. (NASDAQ:LIF) made progress in its advertising business, notably through its partnership with Uber. This demonstrated the potential of its contextual data for targeted ads. Early results suggest advertising could become a major revenue stream, complementing subscriptions.
Its stock surged 7% on January 17 after UBS upgraded it to Buy from Neutral. UBS is optimistic about the company’s medium-term ad revenue growth, believing it could outpace market expectations. This optimism is driven by the company’s ad technology, its valuable user data, and accelerating monthly active user growth within its subscriber base. UBS raised its price target to $55 from $52.