We recently compiled a list of the 10 Under-the-Radar Stocks with Massive Upside for 2025. In this article, we are going to take a look at where GitLab Inc. (NASDAQ:GTLB) stands against other under-the-radar stocks.
Investing in under-the-radar stocks can be a savvy move for those looking to diversify their portfolios and potentially reap significant rewards. These lesser-known companies often fly under the radar of mainstream investors, which can result in undervalued stock prices. Under-the-radar stocks can be found in various sectors, from emerging technologies to niche industries, and are often characterized by their small market capitalization, limited analyst coverage, and low trading volumes.
According to Business Insider, several lesser-known hedge funds have outperformed the market, Glen Kacher’s Light Street and David Rogers’ Castle Hook, for instance, returned 60% last year, outpacing many of their more prominent peers. Jason Mudrick’s firm also had a strong year, with returns of over 31%. Meanwhile, the largest hedge funds in the world, such as Citadel, D.E. Shaw, and Millennium, had good years, although most failed to match the S&P 500’s 23% gain.
The impressive returns achieved by lesser-known hedge funds can be attributed to their bold investment strategies, which included a focus on under-the-radar stocks. By investing in these hidden gems, these funds were able to capitalize on undervalued opportunities and reap significant rewards. As a result, these under-the-radar stocks proved to be a key factor in the funds’ success.
Read Also: 12 Cheapest Stocks with Biggest Upside Potential and Top 10 Undervalued Tech Stocks to Buy According to Hedge Funds.
In an interview with Bloomberg on January 18, David Kostin, Chief US Equity Strategist at Goldman Sachs, shared his outlook for US equities, forecasting an 11% upside for the S&P 500 index, based on the expectation that earnings per share will grow around 11% in calendar 2025 and 7% in calendar 2026. Kostin emphasized that equity investors are already looking ahead, with the fourth-quarter earnings season about to kick off, Kostin noted that earnings growth for the quarter is expected to be around 8%, but the strong dollar may lead to fewer positive surprises than in previous years.
Kostin highlighted that the US stock market is trading at a high multiple, around 22-23 times forward earnings, which is historically high. As a result, earnings will be the primary driver of the market, rather than multiple expansion. He expects the S&P 500 index to rise to around 6,500, driven by earnings growth. Kostin also cautioned that a higher bond yield environment is a concern, as it has been a headwind for equities in the past. However, Kostin expects that inflation will come down slowly, and bond yields will fall to around 4.25% over the rest of the year.
Kostin suggested that portfolio managers should focus on owning US companies with domestically driven revenues, rather than those with high export exposure. This is because companies with high domestic sales are less likely to be affected by retaliatory tariffs. Kostin also mentioned that the Magnificent Seven companies have significant sales outside the US, and may face potential risks due to their high export exposure.
Kostin acknowledged that the Magnificent Seven companies have had fantastic stock performances in 2023 and 2024. However, he expects their premium earnings growth to narrow substantially in 2025 and 2026, leading to a narrowing excess return. As a result, Kostin favors mid-cap stocks, which trade at lower multiples and have similar growth rates to large-cap stocks. He believes that mid-cap US equities, with a market capitalization of between $5 billion to $20 billion, offer a better risk-reward profile.
Lesser-known, under-the-radar companies are often overlooked by mainstream investors, but present a unique potential for growth, particularly in sectors poised for innovation and transformation.
A team of software engineers working together in an open office, developing innovative solutions.
Our Methodology
To compile our list of the 10 under-the-radar stocks with massive upside for 2025, we sifted through internet rankings to find 30 under-the-radar stocks. From that list, we narrowed our choices to the 10 stocks that analysts see the most upside to. The list is sorted in ascending order of analysts’ average upside potential, as of January 17. We also included their stock price as of January 17 and their hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 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).
GitLab Inc. (NASDAQ:GTLB)
Upside Potential: 25.79%
Stock Price as of January 18: $63.67
Number of Hedge Fund Investors: 40
GitLab Inc. (NASDAQ:GTLB) is a leading DevOps platform that provides end-to-end software development solutions for enterprises and developers. The company’s products help streamline project planning, source code management, and application monitoring. GitLab Inc. (NASDAQ:GTLB) generates revenue through subscriptions and by offering premium features tailored for large-scale teams.
GitLab Inc. (NASDAQ:GTLB) is at the forefront of integrating AI into its DevSecOps platform, with the introduction of GitLab Duo Pro and GitLab Duo Enterprise. These AI-powered tools are designed to enhance developer productivity by automating repetitive tasks and providing real-time code assistance. One of the key innovations is the development of agentic AI, which aims to create autonomous agents that can proactively manage the entire software development lifecycle. This agentic AI, known as GitLab Duo Workflow, is expected to revolutionize the industry by reducing the time developers spend on mundane tasks and allowing them to focus more on strategic, value-added work.
GitLab Inc. (NASDAQ:GTLB) is actively forming strategic partnerships with hyperscalers such as AWS and system integrators. These partnerships are crucial for expanding the company’s reach and ensuring that customers can leverage the company’s platform in conjunction with other leading technologies. The company recently announced a partnership with AWS to offer a bundled solution with Amazon Q and GitLab Duo to help developers create and deploy high-quality, secure code faster on the AWS cloud. Additionally, GitLab Inc. (NASDAQ:GTLB) is working with system integrators to help customers fully utilize the extensive features of the GitLab platform, ensuring that they achieve maximum return on investment.
Overall GTLB ranks 10th on our list of the under-the-radar stocks. While we acknowledge the potential of GTLB as an investment, 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 GTLB 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 is originally published at Insider Monkey.
