We recently published a list of 15 Hot Tech Stocks to Buy Right Now. In this article, we are going to take a look at where Lyft, Inc. (NASDAQ:LYFT) stands against other hot tech stocks to buy right now.
In 2024, the S&P 500 IT Sector Index outperformed the broader S&P 500 Index, rising approximately 36% compared to a 23% increase in the latter. This performance was underpinned by emerging trends and innovations, particularly generative AI (GenAI) and the huge investments that went into creating the infrastructure to support the growth of such technologies.
According to Gartner, the year 2025 might see a further uptick in investments. In its January 21, 2025 report, Gartner forecasts Worldwide IT spending to grow 9.8% year-over-year in 2025 to total $5.61 trillion. Among the segments, data center systems, devices, and software are projected to see double-digit growth in 2025 primarily due to GenAI hardware upgrades.
While increasing investment is a positive sign, John-David Lovelock, distinguished VP Analyst at Gartner, shared the complex intricacies of these investments in the report:
“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending. This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.
IT services companies and hyperscalers account for over 70% of spending in 2025. By 2028, hyperscalers will operate $1 trillion dollars’ worth of AI optimized servers, but not within their traditional business model or IaaS Market. Hyperscalers are pivoting to be part of the oligopoly AI model market.”
As indicated by these forecasts, technology continues to remain an exciting space in 2025.
Our Methodology
To shortlist the 15 hot tech stocks to buy, we screened companies with a market capitalization of at least $2 billion, more than 20% share price gains in the last 6 months and a potential upside of at least 20%. The stocks were then arranged in ascending order of their potential upside to arrive at the final list. We also included the number of hedge fund holders for each company based on hedge fund data from Insider Monkey’s database.
Note: All pricing data is as of market close on February 4.
At Insider Monkey we are obsessed with 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 ridesharing passenger and driver in a car, looking out the window in anticipation of their destination.
Lyft, Inc. (NASDAQ:LYFT)
Upside Potential: 35%
Number of Hedge Funds: 51
Lyft, Inc. (NASDAQ:LYFT) operates a ride-sharing platform in cities across the United States and select cities in Canada, offering multimodal transportation services through its mobile app. The company connects drivers with riders, providing a variety of services, including standard rides, shared rides, and Lyft XL for larger groups.
Lyft, Inc. (NASDAQ:LYFT) has established a strong brand presence, focusing on affordability, safety, reliability, efficiency, and community engagement. The company is also investing in autonomous vehicle technology and expanding its bike and scooter sharing services. Lyft is well-positioned to benefit from the ongoing shift towards shared mobility as consumers increasingly seek convenient and cost-effective transportation solutions. Its strategic partnerships with various businesses to promote sustainable transportation options, such as electric vehicles, present significant growth opportunities. In November, the company announced plans to partner with Mobileye, May Mobility, and Nexar for multiple autonomous vehicle (AV) partnerships to connect the Lyft community with future AV rides. On these plans, David Risher, CEO of Lyft, stated:
“Lyft’s aim is to connect AVs, drivers, riders, and partners to create new opportunities for all. Our rideshare network will continue to evolve as millions of people will have the opportunity to earn billions of dollars whether they choose to drive, put their AVs into service, or both.”
Overall, LYFT ranks 6th on our list of hot tech stocks to buy right now. While we acknowledge the potential of LYFT to grow, our conviction lies in the belief that 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 LYFT 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 was originally published at Insider Monkey.
