We recently published a list of Top 10 Stocks to Watch as Investors Brace for Recession. In this article, we are going to take a look at where Powell Industries, Inc. (NASDAQ:POWL) stands against other top stocks to watch as investors brace for recession.
Despite some optimism in the market after President Donald Trump’s indication of possible talks with China, Wall Street analysts are warning about recession risks due to the impending impact of tariffs and an overall decline in consumer sentiment.
Adam Parker, Trivariate Research CEO, said in a recent interview with CNBC that it’s “hard” to be bullish in this market because the impact of tariffs is yet to be reflected in companies’ earnings.
Parker thinks that in the coming days, earnings reports of many companies will begin to show that we are indeed facing an economic slowdown:
“You know there’s a difference between a growth scare and and then an actual growth slowdown I think in this case it is a growth slowdown I don’t know how much of it is yet and that’s where I think the challenge is but you can’t just say oh it’s an irrational growth scare that everyone has and it’s like an uncertain I think if you have a business with pricing power if you have a business that you know you can be okay. But there’s a lot of economically sensitive businesses we’re going to hear from next week and the week after if you think about how earning season typically unfolds where we may get guidance that isn’t quite as peachy as we’ve seen from you know the original guys in the banks and then some of the higher quality tech companies have reported.”
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
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Powell Industries, Inc. (NASDAQ:POWL)
Number of Hedge Fund Investors: 26
Jim Cramer in a latest program on CNBC was asked about Powell Industries, Inc. (NASDAQ:POWL). Cramer said he’s bearish on the stock amid a broader slowdown in the data center industry:
“I know Powell Industries and it was in favor, kind of like an Emerson not that long ago, and suddenly it’s out of favor. If you’re willing to hold on for the next cycle, it’s fine. But I’ve got to tell you, it’s considered to be a data center play, and people think that data centers are slowing down. And that’s the case with Powell Industries too. I’m sorry, I wish I could be more positive. It’s a very inexpensive stock.”
Diamond Hill Capital Long-Short Fund stated the following regarding Powell Industries, Inc. (NASDAQ:POWL) in its first quarter 2024 investor letter:
“As valuations have risen, it has become increasingly challenging to find high-quality companies trading at interesting valuations. Accordingly, we didn’t initiate any new long positions during the quarter. However, we did introduce three new short positions, including Powell Industries, Inc. (NASDAQ:POWL), Royal Caribbean Group and YETI Holdings.
Powell Industries designs, manufactures and services complex electrical systems for several industries. While recent fundamentals have been solid, we believe the valuation has become stretched for what has historically been a highly cyclical business and accordingly initiated a new short position in Q1.”
Overall, POWL ranks 10th on our list of top stocks to watch as investors brace for recession. While we acknowledge the potential of POWL as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than POWL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
