We recently published a list of 12 Best Young Stocks To Buy and Hold For 10 Years. In this article, we are going to take a look at where Nextracker Inc. (NASDAQ:NXT) stands against other best young stocks to buy and hold for 10 years.
On January 29, Martín Escobari, the co-president and head of global growth equity at General Atlantic, joined CNBC’s ‘Fast Money’ to discuss the dealmaking and IPO outlook for 2025. He stated that they have been without an IPO market for three and a half years, the longest drought this century. The second longest was 18 months starting in March 2000 after the dotcom bubble. Martín Escobari mentioned that about 3000 companies are waiting to go public, which will create opportunities for growth equity due to pricing for private companies ready to go public but unable to access capital. Historically, he noted that three things are needed for the IPO market to open: at least 18 months of positive market performance, two years remaining, a low and relatively stable VIX, and a handful of IPOs to pop. He said that they bet that it will happen and the IPO market will be back roaring in 2025.
Regarding investor appetite, he expressed excitement about recent AI news and its impact. He noted that all of General Atlantic’s portfolio companies are using AI to cut costs and drive productivity, with a visible ROI. He believes that the next generation of AI is the application layer, with companies creating new services using AI models, proprietary data, and better software after five years of venture bets. He said that General Atlantic just made three major investments in AI and anticipates the next 2 or 3 years to be very exciting on the application layer. When asked about key metrics for companies going public, Escobari emphasized profitability as a key metric. He stated that they want companies going after vast markets, that are profitable, and whose profitability is defensible with a true competitive advantage, not just temporary profits from being a first mover. He believes investors want large markets and the defensibility of profits in addition to profits.
Methodology
We first used the Finviz stock screener to compile a list of the top stocks that went public in the last 3 years and had a 3-year compound annual growth rate of over 15%. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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).
An empty shelf of bifacial PV modules ready to be installed in a large-scale solar project.
Nextracker Inc. (NASDAQ:NXT)
3-Year CAGR as of February 11: 27.96%
Number of Hedge Fund Holders: 32
Nextracker Inc. (NASDAQ:NXT) provides solar tracker and software solutions for utility-scale and distributed generation solar projects globally. Its offerings include the NX Horizon and NX Horizon-XTR tracking solutions, the TrueCapture control system for optimizing energy production, and the NX Navigator platform for monitoring and controlling solar projects.
Its core business is providing tracker systems for large solar power plants. These systems help solar panels track the sun and maximize energy production. In FQ3 2025, the company generated $679 million in revenue from these tracker systems. In these first nine months of the fiscal year, the company earned $2 billion, which is a 15% increase compared to last year. The demand for Nextracker Inc.’s (NASDAQ:NXT) systems is very strong, with a record backlog of over $4.5 billion in orders. This backlog has more than doubled since its IPO two years ago.
Nextracker Inc. (NASDAQ:NXT) offers a range of innovative products, including the NX Horizon tracker, specialized foundations, Hail Pro systems for storm protection, and the XTR tracker for uneven terrain. They also have software called TrueCapture that helps optimize energy production. The company emphasizes customer service, product innovation, and efficient operations.
Overall, NXT ranks 5th on our list of best young stocks to buy and hold for 10 years. While we acknowledge the growth potential of NXT, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NXT 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.
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