We recently published a list of 15 Hot Tech Stocks to Buy Right Now. In this article, we are going to take a look at where Clear Secure, Inc. (NYSE:YOU) stands against other hot tech stocks to buy right now.
In 2024, the S&P 500 IT Sector Index outperformed the broader S&P 500 Index, rising approximately 36% compared to a 23% increase in the latter. This performance was underpinned by emerging trends and innovations, particularly generative AI (GenAI) and the huge investments that went into creating the infrastructure to support the growth of such technologies.
According to Gartner, the year 2025 might see a further uptick in investments. In its January 21, 2025 report, Gartner forecasts Worldwide IT spending to grow 9.8% year-over-year in 2025 to total $5.61 trillion. Among the segments, data center systems, devices, and software are projected to see double-digit growth in 2025 primarily due to GenAI hardware upgrades.
While increasing investment is a positive sign, John-David Lovelock, distinguished VP Analyst at Gartner, shared the complex intricacies of these investments in the report:
“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending. This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.
IT services companies and hyperscalers account for over 70% of spending in 2025. By 2028, hyperscalers will operate $1 trillion dollars’ worth of AI optimized servers, but not within their traditional business model or IaaS Market. Hyperscalers are pivoting to be part of the oligopoly AI model market.”
As indicated by these forecasts, technology continues to remain an exciting space in 2025.
A close-up of the fingers of a technician scanning an ID, verifying the Enrollment Verification process.
Our Methodology
To shortlist the 15 hot tech stocks to buy, we screened companies with a market capitalization of at least $2 billion, more than 20% share price gains in the last 6 months and a potential upside of at least 20%. The stocks were then arranged in ascending order of their potential upside to arrive at the final list. We also included the number of hedge fund holders for each company based on hedge fund data from Insider Monkey’s database.
Note: All pricing data is as of market close on February 4.
At Insider Monkey we are obsessed with 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).
Clear Secure Inc. (NYSE:YOU)
Upside Potential: 30%
Number of Hedge Funds: 25
Clear Secure Inc. (NYSE:YOU) offers a secure identity verification platform that primarily focuses on enhancing the travel experience for consumers. The company employs top-tier biometric capture technology to streamline the identification process at airports and other venues, allowing users to bypass traditional security lines.
Clear Secure Inc. (NYSE:YOU) has established a significant physical presence both in the US and globally. Its services are designed to improve efficiency and security for both travelers and businesses, with applications extending beyond travel to include sports and entertainment venues. The company’s growth strategy aims to capitalize on the increasing demand for expedited security solutions in the travel and event sectors. By forming partnerships with major airlines and venues, the company has built a solid foundation for growth, and its subscription-based model offers potential for recurring revenue.
In its Q3 2024 results, Clear Secure Inc. (NYSE:YOU) reported strong growth trends, with Total Cumulative Platform Uses reaching 220.4 million (+32% year-over-year), driven primarily by CLEAR Plus verifications and an increasing contribution from CLEAR Verified. Consequently, total revenue for the quarter grew 23.7% to $198.4 million, and total bookings rose by 18.7%. In her shareholder letter for the third quarter, the company’s CEO, Caryn Seidman Becker, expressed optimism about its outlook for 2025 and said:
“Looking ahead to 2025, we are excited by the multi-faceted growth opportunities across our secure identity network as we continue to drive bookings, expand margins, and accelerate free cash flow. With a strong foundation in place and a clear vision for the future, CLEAR is well-positioned to continue delivering value for our members, partners, and shareholders.”
Overall, YOU ranks 8th on our list of hot tech stocks to buy right now. While we acknowledge the potential of YOU to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than YOU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article was originally published at Insider Monkey.