We recently published a list of 12 Most Promising Growth Stocks According to Wall Street Analysts. In this article, we are going to take a look at where Coupang, Inc. (NYSE:CPNG) stands against other most promising growth stocks according to Wall Street analysts.
Strategist Believes the Street is Underestimating the Tech Sector
The new regulatory environment has the technology sector eyeing prominent growth opportunities in 2025 and beyond. Big Tech is set to release earnings next week and investors are excited to see how the group performed in the last quarter. On January 24, Dan Ives, managing director and global head of technology research at Wedbush Securities, appeared in an interview on Morning Brief at Yahoo Finance to share his 2025 outlook for the tech sector.
Ives suggested that the Street is underestimating the potential of Big Tech and advises investors to “grab popcorn” for the earnings week ahead. He also shared his optimism towards the billion-dollar investments made by the group before 2025 and claimed that the “fourth industrial revolution” has just begun. He also suggested that AI spending by companies heavily depends on the use cases for the company, and emphasized the unique selling point for each of the names in mega-cap tech names. Ives stated that the ability to monetize stall bases has been the crucial factor driving the growth among tech names, which happens to mimic what the hyperscalers have done.
Ives emphasized that investments in artificial intelligence are now going to play out on the consumer side and remained confident that Big Tech is a step ahead in terms of the AI journey to monetization. He believes that seeing the return on investment play out, the Street is underestimating the growth in the tech sector, not just for the earnings next week but for 2025 as a whole.
He also suggested that the regulatory environment is drastically changing especially in favor of the autonomous vehicles market and expects a massive year ahead for the segment and stocks associated with self-driving technologies and autonomous vehicle driving.
The year ahead looks super solid for companies in the growth sector, namely artificial intelligence, autonomous vehicles, biotechnology, fintech, and software. While most of it is because of the efforts made by these names over the past year, the promising regulatory environment is going to boost the position of these stocks significantly.
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. We then examined the analyst upside surrounding 25 stocks and picked the 12 stocks with the highest upside as of January 23, 2025. We have also included the hedge fund sentiment around each stock.
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).
A woman holding a laptop, wearing a graphic t-shirt, casually checking her e-commerce order.
Coupang, Inc. (NYSE:CPNG)
Analyst Upside as of January 23, 2025: 41%
Number of Hedge Fund Holders: 56
Coupang, Inc. (NYSE:CPNG) is a technology company that provides retail, restaurant delivery, video streaming, and fintech services to customers around the world under the brands Coupang, Coupang Eats, and Coupang Play, to name a few. The company leverages technology to predict unexpected spikes in demand, allowing it to meet customer demand no matter the conditions. In addition to that, Coupang’s (NYSE:CPNG) proprietary robots can manage and sort orders in seconds, without having to carry and lift items.
In the third quarter of 2024, CPNG generated $7.9 billion in net revenues, up by 27% year-over-year. In addition to that, net income was worth $64 million and gross profit was up by 45% year-over-year. Its product commerce revenue made up most of the revenue, reaching $6.9 billion, up by 16% year-over-year. Similarly, active customers for its product commerce segment hit 22.5 million, up by 11% from the same period in 2023.
Through its innovations, CPNG has managed to deliver cost savings, reduce wastage, and predict demand. This explains why analysts are bullish on the stock with their median price target representing an upside of 41% from current levels.
Appalaches Capital stated the following regarding Coupang, Inc. (NYSE:CPNG) in its Q3 2024 investor letter:
“A new core holding of the portfolio that may appear confusing is Coupang, Inc. (NYSE:CPNG). Coupang mainly provides a first-party marketplace in South Korea and Taiwan that is similar to Amazon here in the U.S. Coupang additionally has other digital services such as Coupang Play (streaming), Coupang Eats (food delivery), and Coupang Pay (payments). Coupang has a dominant position in South Korean e-commerce, with nearly half of the population represented as an active customer on the platform. At first glance, the company appears marginally profitable and very expensive against current earnings, so it certainly appears to be an outlier against the rest of the portfolio.”
Overall, CPNG ranks 8th on our list of most promising growth stocks according to Wall Street analysts. While we acknowledge the potential of CPNG to grow, 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 CPNG 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.
