We recently compiled a list of the 12 Best Growth Stocks Under $25 to Buy Now. In this article, we are going to take a look at where Centessa Pharmaceuticals plc (NASDAQ:CNTA) stands against the other growth stocks.
AI is the Most Defining Theme of 2025, Says Expert
Most experts agree that the AI wave is not over yet. On January 8, Wendy Sheehan Donnell, Editor-in-Chief at PCMag, joined Yahoo Finance from CES 2025 to share her take on trending innovations and the increasing role of artificial intelligence in revolutionizing industries.
Donnell unveiled some of the groundbreaking innovations spearheaded by companies from across the globe and emphasized that “AI is the prevailing theme” across all these new products and services. She highlighted the incidence of AI-powered home devices such as smart microwaves and fridges to help people live smarter and tech-immersed lives. She also shed light on the growing role of AI in healthcare and biotechnology, which will contribute to the well-being of people.
A Glance at the Tech Sector in 2025
The market close on Tuesday reiterated a similar pattern where tech stocks continued to shine, however, some analysts expect the market to broaden over the course of 2025. On January 7, Joe Mazzola, head trading and derivatives strategist at Charles Schwab, joined Yahoo Finance, to discuss his market thesis for the tech sector especially.
Mazzola suggested that the market breadth was of importance in the earnings season, and pointed towards the strengthening of the US dollar and how it may impact the earnings of tech names. He added that the market needs the other “493 names” in the S&P 500 to catch up. Mazolla also emphasized that while 2025 can be a win for Big Tech like 2024, a broadening would help the overall market immensely in terms of earnings.
He added that the financials sector would supposedly catalyze the broadening of the market, because of favorable economic and market conditions. He then discussed the tailwinds for financials and how the same factors serve as headwinds to Big Tech, emphasizing that the bullishness on tech has been slower than it was at the end of 2024.
Our Methodology
We used Finviz to look for companies operating in growth sectors such as technology, financials (fintech), biotech, and communication services. We only focused on companies with a market cap of at least $2 billion and that gained more than 50% over the past 2 quarters. We then examined the hedge fund sentiment surrounding 25 stocks and picked the 12 stocks that were the most widely held by hedge funds.
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).
Lab technicians in safety glasses and lab coats conducting a clinical trial of a new pharmaceutical.
Centessa Pharmaceuticals plc (NASDAQ:CNTA)
Number of Hedge Fund Holders: 34
Share Price as of January 8, 2024: $17.32
Centessa Pharmaceuticals plc (NASDAQ:CNTA) ranks second on our list of the best growth stocks under $25 to buy now. The biotechnology company is currently conducting trials of drugs for patients with neurological, neurodegenerative, and psychiatric disorders. In the third quarter of 2024, the company made quite some progress with its trials by announcing interim data from a phase 1 trial for its novel orexin receptor 2 (OX2R) and initiated phase 2 trials for its ORX750 drug.
The company believes its strength lies in its OX2R agonist program, offering treatment for a wide range of disorders. In addition to its revolutionary drug, Centessa Pharmaceuticals plc (NASDAQ:CNTA) also halted the global clinical development of its SerpinPC drug, resulting in nearly $200 million in net savings. These savings will be allocated to its OX2R drug franchise. The company spent nearly $33.9 million in research and development in Q3 2024, up from $28.2 million during the same period in 2023, and had $518.4 million in cash and cash equivalents at the end of the quarter.
Centessa Pharmaceuticals plc (NASDAQ:CNTA) expects to use their long and short-term cash resources to fund their operations into mid-2027 before they start reporting a profit. Investors are bullish on the stock because of its future growth potential and the current pace of its operations is contributing to that.
Overall CNTA ranks 2nd on our list of the best growth stocks under $25 to buy now. While we acknowledge the potential of CNTA as an investment, our conviction lies in the belief that certain 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 CNTA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
