We recently published a list of 12 Stocks to Buy with Exponential Growth in 2025. In this article, we are going to take a look at where Robinhood Markets, Inc. (NASDAQ:HOOD) stands against other stocks to buy with exponential growth in 2025.
With the Trump administration implementing the tariff agenda, global markets continue to feel the impact, with sell-offs taking place as investors are on their toes due to the implications of a dynamic trade landscape. Morgan Stanley believes that stocks in sectors having increased foreign revenue exposure, including technology, materials and energy, can be more vulnerable to tariff uncertainties. If tariffs remain long-lasting, there is a possibility that defensive stocks in sectors like health care and utilities might outperform cyclicals, including consumer discretionary companies.
Resilient Sectors Amidst Uncertainties
The technology, energy, materials and industrials sectors, having foreign revenue exposure as high as 57%, are especially exposed to tariffs, says Morgan Stanley. For instance, the tariffs targeting aluminum and steel can impact the materials sector, while tariffs specific to China or retaliation efforts can have secondary impacts for broader technology space. If the tariff regime escalates, the firm opines that the utilities and healthcare sectors are expected to outperform because of their defensive nature and lower tariff exposure.
If the long-lasting tariff regime comes into action, the defensive US stocks can outperform cyclical sectors such as industrials or consumer discretionary. This is because cyclical sectors are more vulnerable to higher import costs as well as a reduction in international trade. Furthermore, the consumer discretionary companies that have higher reliance on revenues garnered from lower-income consumers can witness the most pressure.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Amidst Tariffs, What Lies Ahead for US Economy?
The strong consumer spending has been driving the economy, and Dr. David Kelly (Chief Global Strategist at J.P. Morgan Asset Management) anticipates another year of 2% GDP growth. One critical impact of Trump’s immigration policies can be less job growth. Another important focus of the Trump administration revolves around deregulation, which is expected to have positive impacts on investing. Kelly believes that deregulation or lack of additional regulation is expected to help some areas, mainly for financial markets.
There could be an increase in bank lending and private credit. Kelly believes that private equity markets and cryptocurrencies are expected to gain the most from deregulation. The outlook on corporate profitability this year remains significantly good. Kelly opines that there has been a broadening out of profits. Earlier, there were technology companies and the Mag Seven and the like who were making money. Now, in Q4 2024, 9 out of 11 S&P 500 sectors witnessed a gain.
Our Methodology
To list the 12 Stocks to Buy with Exponential Growth in 2025, we used a screener to shortlist the companies that analysts see significant upside to. The stocks were ranked in ascending order of their average upside potential, as of March 14. We also mentioned the hedge fund sentiments around each stock, as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A successful business person confidently managing their finances on a mobile device.
Robinhood Markets, Inc. (NASDAQ:HOOD)
Average Upside Potential: ~78.3%
Number of Hedge Fund Holders: 79
Robinhood Markets, Inc. (NASDAQ:HOOD) operates a financial services platform in the US. Deutsche Bank analyst Brian Bedell believes that the company is a good buying opportunity, and has maintained a “Buy” rating on the stock. Robinhood Markets, Inc. (NASDAQ:HOOD) continues to demonstrate encouraging growth and resilience, mainly in its trading volumes and new product offerings. As per the analyst, the company has been witnessing robust trading momentum, mainly in equities and options. The crypto notional volumes rose over 400% YoY, touching $71 billion in Q4 2024. The company’s newer products, which include futures trading, have been picking up steam faster than anticipated.
Elsewhere, BofA Securities remains optimistic about Robinhood Markets, Inc. (NASDAQ:HOOD)’s stock, maintaining a “Buy” rating and a price objective of $65.00. The firm’s analyst noted the platform’s higher retail engagement and strong organic growth. The company possesses strong growth potential in the self-directed retail as well as cryptocurrency sectors globally. Furthermore, an expanded cryptocurrency offering is expected, enhancing Robinhood Markets, Inc. (NASDAQ:HOOD)’s appeal to crypto traders and investors.
Artisan Partners, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“During the quarter, we initiated new GardenSM positions in US Foods, Pure Storage and Robinhood Markets, Inc. (NASDAQ:HOOD). Robinhood has emerged as the go-to-trading platform for millennials, boasting approximately 25 million accounts (versus Charles Schwab’s 34 million). The company’s user base skews younger, with deposits growing significantly faster than the broader industry due to several drivers, including the rise of self-directed trading, the generational wealth transfer to millennials and increasing market share. As Robinhood’s customer base matures and accumulates wealth, we believe the company is well positioned to expand its product offerings to meet evolving financial needs. Furthermore, management’s focus on profitable growth and a 90% fixed cost structure suggests meaningful margin expansion potential.”
Overall, HOOD ranks 3rd on our list of stocks to buy with exponential growth in 2025. While we acknowledge the potential of HOOD as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than HOOD 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 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
