We recently published a list of 10 Best Stocks to Buy For Long Term Growth. In this article, we are going to take a look at where Uber Technologies, Inc. (NYSE:UBER) stands against other best stocks to buy for long term growth.
Strategist Expects S&P 500 to reach 6,600
Some investors consider 2024 as a transition year, while others debate that this year was just the beginning of the level of volatility awaiting financial markets in 2025. It is not an exaggeration to say that 2024 has been rough for markets given that crucial events like the commencement of an easing cycle followed by the US elections remained a major influence on the overall environment. Amid all these awaited events, the tech sector has not been an investor favorite, however, that may change sooner than we think.
On November 26, Venu Krishna, head of US equity strategy at Barclays, joined Yahoo Finance to share his opinion on the stock market, particularly the tech sector. Krishna raised his S&P 500 price target for 2025 to 6,600 and shed light on why he believes such is possible.
He shared that the economy is pretty constructive from a macro perspective given that the virtuous cycle between income and employment remains solid. He added that consumer balances are going up and believes that the overall economic conditions of the country have been positive. All these reasons combined explain the price target of 6,600 for the S&P 500.
Speaking of the technology sector, Krishna agreed that the “market is, on a consistent basis, underestimating the earnings power of tech, especially big tech.” He added that at the same time, the market is also overestimating the earnings power of the other non-tech names in the S&P 500. He shared that the market expected Big Tech to post earnings up by 19% year-over-year and have “flat revisions” in the third quarter. Non-tech stocks on the other hand were marked down by 2%.
However, Krishna revealed that as the earnings period of Q3 2024 comes to a close, Big Tech actually delivered 31% of earnings growth during the quarter. He added that non-tech stocks have moved in the same direction but only incrementally. He explained that, for example, non-tech stocks were originally marked down, but instead, they expanded by 2%, accelerating at a very slow pace.
He also emphasized that the rate at which the market expects Big Tech earnings to slow down is in reality much lower than the actual deceleration rate. Overall, Krishna expects the market to converge but highlighted that it may not be as close as we expect it to be, probably not sooner than Q1 2026.
While turmoil and uncertainty remain a key element in the market, some stocks are revolutionary enough that they are bound to offer great opportunities in the coming years, if not now. That said, let’s take a look at the 10 best stocks to buy for long term growth.
Our Methodology
To come up with the best stocks to buy for long term growth we sifted through multiple rankings on the internet. We then examined the hedge fund sentiment of each stock and ranked them in ascending order of the hedge fund sentiment as of Q3 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close up view of a hand holding a smartphone, using a ride sharing app.
Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 136
Ride-hailing company Uber Technologies, Inc. (NYSE:UBER) is working to improve the overall customer experience. During the quarter, the company launched all-electric Uber Green, an EV-only ride option in 40 cities globally with an EV preference feature in other markets. Other than that, the company recently introduced new features to make holiday customers happy with the service. UberXXL, a new feature, was launched by Uber on November 20 to facilitate incoming holiday travelers on Thanksgiving by offering extra trunk space and rides to and from nearly 60 airports across the globe.
The company is not just trying to satisfy customers. For drivers, Uber (NYSE:UBER) introduced an AI assistant that helps answer EV-related questions supported by an EV mentorship program. More recently, on October 3, Uber (NYSE:UBER) formed a partnership with ENSO, The Earthshot Prize Finalist, to launch a range of low-emission electric vehicle tires across the United Kingdom and the United States.
Uber Technologies, Inc. (NYSE:UBER) is making strides in electric and autonomous vehicles, while also maintaining its position as a leading ride-hailing cab service. Analysts are also bullish on the stock, and their 1-year median price target of $90 points to a 25% upside from current levels.
Overall, UBER ranks 7th on our list of best stocks to buy for long term growth. While we acknowledge the potential of UBER 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 UBER 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.