In this article, we will look at the 8 Most Promising Stocks to Buy According to Wall Street Analysts.
With only a few days left until the 2024 presidential election, investors are preparing for potential volatility to shake the stock market. Uncertainty surrounds the winner of the November elections, whether Vice President Kamala Harris or former President Donald Trump will take. With around 62% of US adults invested in the stock markets, there are potentially particular ways for investors to manage and position their portfolios to reach profitability based on the election outcome, as there are differences in the Democratic and Republican economic policies.
However, despite this uncertainty, geopolitical tensions are already influencing market reactions. Tiffany McGhee, CEO and CIO at Pivotal Advisors, highlighted the potential macro events that could spark market volatility at the start of October. She was of the opinion that the ongoing conflict in the Middle East and the vice presidential debate are critical factors influencing market reactions. Bond prices experienced a decline earlier in the week but stabilized with investors looking for safety amidst the worsening geopolitical tensions. McGhee expects further short-term volatility as the elections approach due to these developments.
So, what should investors do to combat this volatility and ensure their profitability? McGhee prompted investors to reassess their portfolios, especially those with a heavy concentration in equities. With the S&P 500 up 20% year-to-date and sectors like consumer discretionary and technology performing on the better end of the spectrum, she suggests that this might be the time to take some profits off the table and think about reallocating these funds into different areas of the market to follow trends.
High Growth Sectors: Where Does Expert Opinion Point?
Market volatility and geopolitical trends are pushing investors to speculate about the most promising and high-growth sectors. On October 7, Keith Buchanan, GLOBALT Investments senior portfolio manager, appeared in an interview on Yahoo Finance to talk about what his expectations from the market are. With earning expectations revised from mid-single digits to mid-double digits, solid growth is expected as 2024 draws to a close. According to Buchanan, much of this growth is expected to come from artificial intelligence. In addition, expanding earnings growth beyond traditional growth in certain other sectors, like technology, is also anticipated to drive growth.
The energy and industrial sectors have experienced greater returns in 2024, capturing a significant portion of the market. Apart from value stocks and AI plays, Buchanan also adds that names in industrials, consumer discretionary, and financials are on the path to growth ahead for 2024. However, his advice to investors is prudent: to consider geopolitical events before diving head-first into investment decisions.
The stock market is thus exhibiting signs of its changing trends. Some of these are paving a profitable path for small caps. We discussed the potential of small-caps to rally in our article 7 Penny Stocks with Low PE Ratios. Here is an excerpt from it:
Larry Adam, chief investment officer at Raymond James, recently appeared in a CNBC interview and is of the opinion that the current market is precisely what a soft landing looks like. Talking about how lower interest rates are expected to benefit small caps, particularly the Russell 2000, Adam said that he believes the bull market will continue with the economy inching closer to a soft landing.
Small cap stocks get around 56% of their financing from the short end of the yield curve, which refers to the short-term interest rate on the yield curve. This typically represents the yields on bonds with shorter maturities, such as 2-year or 5-year Treasury notes. Large-cap companies, in contrast, get only 26% of their financing from these short ends of the curve. Therefore, Adam concludes that as the Fed continues to lower interest rates, small-cap companies will be better positioned to meet their financing needs.
He pointed out that the Fed is expected to cut rates twice in 2024 and another four times in 2025, painting a favorable picture for small caps. He iterated that the impact of the rate cuts has been positive for small caps, which have outperformed large caps. Taking this into a historical context, whenever the economy goes towards a soft landing, the circumstances help the small caps more significantly than the rest of the market.
With that, let’s take a look at the 8 most promising stocks to buy according to Wall Street analysts.
8 Most Promising Stocks to Buy According to Wall Street Analysts
Our Methodology
We used the Finviz screener to make a list of 25 mid cap stocks with a market cap of over $2 billion and selected the 30% above price column in the target price section. We picked the top 8 stocks with the highest analyst upside potential as of October 9, 2024. We have also added the hedge fund sentiment around the stocks, as of Q2 2024.
Why do we care about what hedge funds do? 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).
8 Most Promising Stocks to Buy According to Wall Street Analysts
8. AST SpaceMobile Inc. (NASDAQ:ASTS)
Analyst Upside Potential: 69.21%
Number of Hedge Funds: 15
AST SpaceMobile (NASDAQ:ASTS) operates a global cellular broadband network in space to connect directly with standard, unmodified mobile devices based on its patent portfolio and intellectual property (IP). Designed for both government and commercial applications, the SpaceMobile service provides high-speed cellular broadband services to end-users out of terrestrial cellular coverage through existing mobile devices. It designs and develops the constellation of BlueBird (BB) satellites in advance of the launch of its planned space-based cellular broadband network distributed through a constellation of low earth orbit (LEO) satellites. The company operates in India, the United States, Spain, Scotland, and Israel.
ASI SpaceMobile (NASDAQ:ASTS) has moved past its primary focus on enhancing its technology to fund growth in the next phase of executing its vision and operationalizing its business. It is shifting from R&D to full-scale commercialization and production of its Space-Based cellular broadband network. Overall, the company’s technology is patented, proven, and validated, with a growing commercial ecosystem.
Its business is also accelerating. Its five commercial satellites arrived recently after completing their final assembly from the company’s manufacturing facilities in Texas. As of Q2 2024, these satellites are undergoing final preparation for integration with the Falcon 9 launch vehicle for a dedicated mission. It has a seven-day contracted orbit and launch window in the first half of September, with the current expectation of launching in this window. The company has invested more than $1 billion and seven years to reach this milestone.
These BlueBirds will mark the largest communications array to ever be deployed commercially into loaded orbit. These arrays provide a strong signal that can reach standard smartphones directly to provide cellular broadband service and other non-communication government applications. AST SpaceMobile (NASDAQ:ASTS) is targeting around 100% geographical coverage for the continental United States with these initial commercial satellites, using premium 850 MHz low-band spectrum that offers superior signal penetration in the low-band spectrum range. It ranks eighth on our list of the 8 most promising stocks to buy among Wall Street analysts.
7. Enovix Corporation (NASDAQ:ENVX)
Analyst Upside Potential: 69.28%
Number of Hedge Funds: 22
Enovix Corporation (NASDAQ:ENVX) is an advanced silicon battery company that designs, develops, manufactures, and commercializes lithium-ion (Li-ion) battery cells that significantly increase the storage capacity and amount of energy density relative to conventional battery cells. Its disruptive architecture allows high energy density and capacity in the batteries without compromising safety. In addition to designing its battery, the company also develops the advanced manufacturing processes necessary to produce its batteries. It also sells electrode coating, lithium-ion batteries, aging, cell packaging, and testing. It has two factories in Korea.
The company is running on strong fundamentals and delivered Q2 revenue of $3.8 million, which was above the midpoint of its forecast. The company expects higher revenue growth in the year’s second half compared to the first half. Its cash and equivalents reached $250 million. Its strong balance sheet provides it with strong liquidity.
Enovix Corporation (NASDAQ:ENVX) has had significant commercial successes recently. In June, it announced an agreement with a leading California-based technology company in the XR market and another collaboration with a Fortune 200 company. That marks its second deal with an auto OEM. The company has also moved into operational mode in Malaysia, building batteries on the agility line and ramping down its high-cost manufacturing operation in the US. It has also completed the first batch of EX-1M samples, which it sent to some of its customers.
Although the process took a little longer than anticipated, the company is making sure that all its equipment meets its rigorous specifications. It boasts an agility line that has cleared the SAT, or the Site Acceptance Test, and is producing fast runs of its EX-1M batteries.
Its customer engagement activity is continuing to strengthen. Enovix Corporation (NASDAQ:ENVX) is working closely with the top five OEMs it identified previously to achieve the key milestones in its development agreement.
Massif Capital Real Assets Strategy stated the following regarding Enovix Corporation (NASDAQ:ENVX) in its Q2 2024 investor letter:
“Enovix Corporation (NASDAQ:ENVX): Enovix is perhaps a bit of an outlier in our portfolio given that it is a battery manufacturer selling into consumer goods markets, but it fits nicely in what we believe to be the Massif Capital analytical sweet spot, businesses where science/technology, geopolitics/geoeconomics and energy/materials overlap. While some would argue that Enovix is inappropriate for a liquid real asset portfolio, the traditional definition of real asset businesses is dated.
Traditionally, real asset businesses are those that own and operate real estate, infrastructure, and natural resource assets. While this definition is workable, and most of the companies we invest in fall into one of these categories, it does not consider the ever-growing role of applied physical sciences in specific manufacturing fields, nor does it take into account the growing importance of material sciences and the changing nature of energy in general. Enovix is a material sciences business aiming to transform an ever-growing list of unique, highly refined materials into energy storage devices. They create value by understanding materials’ physical and electrochemical properties better than others…” (Click here to read the full text)
6. Kosmos Energy Ltd. (NYSE:KOS)
Analyst Upside Potential: 70.45%
Number of Hedge Funds: 25
Kosmos Energy (NYSE:KOS) is a deepwater, full-cycle, independent oil and gas exploration and production company focused on the offshore Atlantic Margins. Its primary assets encompass production offshore Equatorial Guinea, Ghana, and the United States Gulf of Mexico, along with gas projects offshore Senegal and Mauritania. The company operates in four geographical reporting segments: Equatorial Guinea, Ghana, the US Gulf of Mexico, and Senegal/Mauritania.
Kosmos Energy (NYSE:KOS) is seeing strong operational momentum and solid progress across all its business units. It announced a target to grow production by around 50% two years ago, primarily driven by the delivery of three significant projects; Winterfell in the Gulf of Mexico, Junilee Southeast in Ghana, and GTA in Senegal and Mauritania. It is on the path to achieving this target by successfully starting the Winterfell and Jubilee Southeast along with production enhancement projects in the Gulf of Mexico.
It expects the startup of the final phase of the GTA project through the end of 2024. It also expects the infill drilling campaign in Equatorial Guinea to contribute towards its year-end production goal of around 90,000 barrels of oil equivalent per day. However, this production growth is not merely for growth’s sake, as it is coming from high-quality material projects with long reserve lives across both oil and gas. This rising production is working on a multiyear investment cycle.
The increased production and lower capital are expected to drive a meaningful cash flow inflection for the business, with a free cash flow of around $100 million to $150 million per quarter once it is up and running. The company will use this cash flow to initially pay down debt and strengthen its financial resilience. It is also planning to invest in future growth selectively, prioritizing high-graded projects that fit within its targeted capital budget.
Once its debt level reaches its near-term leverage target of sub 1.5 times, Kosmos Energy (NYSE:KOS) will focus on shareholder returns and further debt paydown to achieve its long-term goals. The company ranks sixth on our list of the top most promising stocks to buy among Wall Street analysts.
5. Celsius Holdings, Inc. (NASDAQ:CELH)
Analyst Upside Potential: 73.97%
Number of Hedge Funds: 27
Celsius Holding (NASDAQ:CELH) develops, processes, markets, sells, and distributes functional energy drinks to various consumers. It markets its flagship asset, CELSIUS, as a fitness drink or supplement that accelerates metabolism and burns body fat with exercise while providing energy. The company’s product formulation includes supplements and ingredients such as green tea (EGCG), calcium, ginger, B vitamins, vitamin C, and chromium. The product line is marketed in two versions: a ready-to-drink version and an on-the-go powder form.
The company also offers a new CELSIUS Essentials line, marketed in 16-ounce cans. The products are available in retail channels across the US and certain markets in Europe, Canada, the Middle East, and Asia-Pacific.
Celsius Holding (NASDAQ:CELH) has a strong operational model and is running on positive fundamentals. Its second-quarter experienced positive momentum across profit, revenue, and gross margin in an otherwise challenging macro environment. Although the company experienced unanticipated and systematic category growth pressure, it remained resilient, delivering innovation, expanding its in-store shelf presence, and bringing new consumers into the category. It contributed to 47% of all category growth in Q2, making the company the clear category growth leader.
Total revenue for Q2 experienced a 23% year-over-year growth, reaching $402 million. Total revenue for the first half of 2024 increased by 29% to $757.7 million. Similarly, international revenue increased 30% in the quarter, reaching $19.6 million. This growth was supported by significant shelf space gains during the seasons, shelf resets, and a more than 35% increase in the company’s average SKUs sold per store. These numbers came from Circana’s first four-week read ending July 14, 2024, compared to the last four weeks ending December 3, 2023. Within the convenience channel, its average SKUs selling per store grew by 43% in the same time frame.
Celsius Holding (NASDAQ:CELH) has plans to counter the increasing competition in the market. It is continuously adding resources across merchandising, sales, key accounts, and field marketing.
Alger Small Cap Growth Fund stated the following regarding Celsius Holdings, Inc. (NASDAQ:CELH) in its Q2 2024 investor letter:
“Celsius Holdings, Inc. (NASDAQ:CELH) engages in the development, marketing, sale, and distribution of functional drinks and liquid supplements. It also offers post-workout functional energy drinks and protein bars. During the quarter, shares detracted from performance after the company reported fiscal first-quarter revenues below analyst estimates. The revenue shortfall was attributed to ongoing inventory management challenges with PepsiCo, which decelerated year-over-year revenue growth from over 100% to approximately 37%. Despite the slowdown in near-term growth, we believe Celsius remains well positioned to potentially capture market share within the large energy and soft drink industry over the long term.”
4. PagSeguro Digital Ltd. (NYSE:PAGS)
Analyst Upside Potential: 90.74%
Number of Hedge Funds: 32
PagSeguro Digital (NYSE:PAGS) provides financial technology solutions focused primarily on individual entrepreneurs, consumers, small companies, micro-merchants, and medium-sized companies in Brazil. It boasts an end-to-end digital ecosystem that allows its merchants to accept payments and manage and grow their businesses. It offers a two-sided ecosytem, providing payments and banking experience through a single interface through one platform, one app, and one customer support.
The company’s digital banking ecosystem features its PagBank digital account, which works under the brand PagBank and offers around 13 cash-out and 40 cash-in methods. Its end-to-end payments ecosystem allows its customers to accept an array of in-person and online payment methods.
PagSeguro (NYSE:PAGS) experienced an all-time high in key financial metrics in Q2, including net income and revenues. Total revenue increased 19% year over year, primarily due to revenue growth in all client segments and a strong TPV. Its gross profit margin ended the quarter close to 40%, which was in line with the company’s guidance and 86 basis points higher than Q2 2023. It reached 31.6 million clients by the end of June, with an increase of 2 million in the last 12 months.
The company also reached an all-time deposit level of BRL 34.2 billion ($6.13 billion), undergoing an 87% increase year over year. This growth shows the power of the company’s value proposition, which has contributed to improvement in client engagement and is supporting its profitability metrics. PagSeguro (NYSE:PAGS) has also maintained strong payment growth, with its TPV reaching BRL 124 billion ($22.2 billion) with a 34% year-over-year growth. This was three times more than the industry growth, which stood at 11%. It takes the fourth spot on our list of the the 8 most promising stocks to buy among Wall Street analysts.
3. Riot Platforms Inc. (NASDAQ:RIOT)
Analyst Upside Potential: 120.59%
Number of Hedge Funds: 12
Riot Platforms (NASDAQ:RIOT) is a Bitcoin mining and digital infrastructure company. It operates Bitcoin mining operations in Kentucky and central Texas, along with electrical switchgear engineering and fabrication operations in Denver. The company is divided into two segments: Bitcoin Mining and Engineering. The Bitcoin Mining segment undertakes Bitcoin mining activities, while the Engineering segment manufactures and designs power distribution equipment and custom-engineered electrical products.
The Engineering segment also provides manufacturing, electricity distribution product design, manufacturing, and installation services primarily focused on large-scale governmental and commercial customers. Riot Platform’s (NASDAQ:RIOT) total potential power capacity is two gigawatts. It serves a broad scope of clients across an array of markets, including power generation, data center, water, utility, industrial, and alternative energy.
The company’s primary strategic focus is on developing a leading vertically integrated Bitcoin mining company that stands on three key pillars. These include owning and developing operations of significant scale, being a low-cost producer of Bitcoin, and building a strong balance sheet. Riot Platforms (NASDAQ:RIOT) exhibited strengths in all three pillars in Q2 2024. It successfully boosted its Corsicana facility, increasing the total deployed hash rate quarter-over-quarter by 77% from 12 EH/s to 22 EH/s. This exceeded the company’s quarter-end target of 21 EH/s. Its future growth plans are fully funded due to its continued focus on maintaining a strong balance sheet.
The company announced the acquisition of Block Mining at the close of Q2. Block Mining is a privately held miner that operates in Kentucky. The acquisition adds around 60 megawatts of operating capacity to Riot Platforms (NASDAQ:RIOT), potentially expanding it to 110 megawatts in 2024 by employing its existing infrastructure and a pipeline to build to more than 300 megawatts in total in Kentucky. It adds around 16 EH/s of total hash rate capacity, providing the company with a clearly identified growth path to 2 gigawatts of potentially accessible power, along with 75 EH/s of potential has rate deployed.
2. Iovance Biotherapeutics Inc. (NASDAQ:IOVA)
Analyst Upside Potential: 141.77%
Number of Hedge Funds: 33
Iovance Biotherapeutics (NASDAQ:IOVA) is a clinical-stage biopharmaceutical company that develops and delivers tumor-infiltrating lymphocyte (TIL) therapies for patients with solid tumor cancers. Its lead product candidate is Amtagvi (lifileucel), a tumor-derived autologous T-cell immunotherapy. The company is also developing next-generation therapies using TIL, including genetically modified TIL cell therapy.
The company has had a productive year following its first FDA approval and a successful start of the commercial launch of Amtagvi for patients with advanced melanoma in the US. Amtagvi is experiencing strong demand. Iovance Biotherapeutics’ (NASDAQ:IOVA) revenue reached $31.1 million in Q2, including recognized revenue for Proleukin and Amtagvi.
The initial quarter of product revenue from the company’s US launch shows early success in execution, broad patient access, and high awareness. With Amtagvi exhibiting a meaningful benefit for customers undergoing treatment in a commercial setting, the company expects continued launch momentum. It has a very engaged network of more than 50 currently authorized treatment centers (ATCs) with the infrastructure, training, and capabilities to treat patients with this drug.
Iovance Biotherapeutics (NASDAQ:IOVA) is on track to expand this network and will have at least 70 ATCs by the end of 2024. When achieved, this would represent the largest-ever initial ATC network for a cell therapy launch. The company has also initiated its community referral activities to boost additional demand for these ATCs. Strengthened by a strong logistics and scheduling collaboration between ATCs and the company, along with early success with reimbursement, the treatment is becoming faster for patients.
Iovance Biotherapeutics’ (NASDAQ:IOVA) commercial manufacturing capabilities are successfully delivering Amtagvi at an increasing pace, showing that the company is staffed to provide manufacturing slots and meet current and expected demand efficiently. It is scaling up its manufacturing according to growth projections, and has increased capacity and headcount every month since launch. The company ranks second on our list of the the 8 most promising stocks to buy among Wall Street analysts.
Artisan Small Cap Fund stated the following regarding Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) in its Q2 2024 investor letter:
“Among our top detractors for the quarter were Lattice Semiconductor and Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). Iovance Biotherapeutics is a biotechnology company focused on innovating, developing and delivering novel polyclonal tumor-infiltrating lymphocyte (TIL) cell therapies for cancer patients. The stock rallied significantly in Q1 after announcing that the FDA approved AMTAGVI™ (lifileucel) for advanced melanoma. Now that the scientific risk is behind the company, investor focus has shifted to the company’s commercial execution, and shares experienced weakness after the company reported earnings results. It announced the enrollment of more than 100 patients for therapy; however, this was not enough to alleviate investor concerns about patient attrition. In our view, there is no issue with the efficacy of its life-saving treatment. Headwinds have been caused by challenges in ramping production, which is understandable in the early days. We view these concerns as overblown and remain invested.”
1. CleanSpark, Inc. (NASDAQ:CLSK)
Analyst Upside Potential: 155.56%
Number of Hedge Funds: 20
CleanSpark (NASDAQ:CLSK) is a Bitcoin mining company that independently owns and operates around nine data centers in Georgia, two in Myoming, three in Mississippi, and co-locations in New York and Tennessee. It does not host miners for any other companies, with its operating mining units capable of producing computing power of more than 22.6 exahashes per second (EH/s). It owns and runs several data centers primarily running on low-carbon power. The company designs its infrastructure to ensure and support the Bitcoin network responsibly. It also operates several subsidiaries, including CleanSpark DW LLC, ATL Data Centers LLC, CleanBlok Inc., CleanSpark GLP, LLC, SCRE Properties Norcross, and others.
The company announced its agreement to acquire up to an additional 22.8 exahash per second of the new S21 XP series of immersion-cooled miners, operating at an efficiency of 13.5 joules per terhash. This purchase is expected to drive the company ahead by improving its overall fleet efficiency. The company exceeded $100 million in revenue for the second consecutive quarter in Q2 2024, producing $290 million in revenue since the beginning of its fiscal year in October 2023. It also grew its hash rate by 4 exahash per second, and delivered on its commitment to achieve 20 exahash per second by the end of the quarter. The company is on track to meet and optimally exceed its target of 32 exahash per second.
CleanSpark (NASDAQ:CLSK) underwent several positive changes in the quarter, maintaining its growth trajectory through the Bitcoin halving event and setting new benchmarks in market leadership and operational efficiency. The company’s primary strategy has been infrastructure-first, owning and operating its sites being at the center of its operations. Its distributor portfolio makes up another central part of its operations, meaning that the company is not dependent on any utility or site’s output, giving it flexibility and resilience.
It has expanded its strategy significantly over the past nine months, growing from operating 5 sites in Georgia to managing more than a dozen unique sites across four states. It plans to open new sites as well. This infrastructure growth has allowed the company to improve its overall scale and the value of its portfolio, positioning it for continued success in the future.
Overall, CLSK ranks first among the 8 most promising stocks to buy among Wall Street analysts. While we acknowledge the potential of promising stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CLSK but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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