We recently compiled a list of the 10 Stocks That Will Make You Rich In 2025. In this article, we are going to take a look at where Viking Therapeutics, Inc. (NASDAQ:VKTX) stands against the other stocks that will make you rich in 2025.
What to Expect from the Stock Market in 2025
Jurrien Timmer, Director of Global Macro at Fidelity Management & Research Company, recently shared his outlook for the stock market in 2025. His analysis reflects cautious optimism, emphasizing potential growth and significant risks. Timmer described 2024 as a “Goldilocks” year for U.S. stock returns, characterized by robust earnings growth and rising valuations. The S&P 500 Index experienced a substantial increase, concluding the year with a gain of approximately 28% as it reached new all-time highs. This performance was driven by strong earnings from major companies, particularly the so-called “Magnificent Seven” stocks whose growth has significantly influenced the overall market dynamics.
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Looking ahead to 2025, Timmer maintained a bullish stance on stocks but cautioned that investors should not expect returns to match the spectacular gains of the previous two years. He noted that while earnings forecasts remain strong, especially for the mega-cap stocks, valuations are stretched, currently sitting in the 90th percentile historically. This suggests that significant further expansion in price-to-earnings (PE) ratios could lead to a bubble scenario, which he believes is unlikely. He expects continued earnings growth to support stock prices in 2025. However, valuations may limit future growth. Timmer suggests that earnings must drive performance rather than further valuation expansion to avoid a bubble scenario.
With the bull market entering its third year, Timmer describes it as being in “later innings,” indicating increased caution regarding future performance. He also suggested several risks that could potentially impact the market in 2025. For instance, heavy reliance on a few mega-cap stocks poses a risk; if these stocks falter, it could drag down overall market performance despite broader participation from other stocks. Secondly, although he does not foresee a return to the high inflation rates of the past decades, he warns that rising inflation could lead to higher interest rates, which would negatively affect the stock market.
Our Methodology
To compile the list of 10 stocks that will make you rich in 2025, we conducted a consensus. We sifted through various internet rankings to get an initial list of stocks expected to explode in 2025. Next, we sourced analyst sentiment for each stock from CNN and ranked our list in ascending order of the analysts’ projected upside potential for the next twelve months. Please note that the data was recorded on Friday, December 20, 2024.
Why do we care about what hedge funds do? 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).
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Viking Therapeutics, Inc. (NASDAQ:VKTX)
Analysts Upside Potential: 160.36%
Viking Therapeutics, Inc. (NASDAQ:VKTX) is a biopharmaceutical company that is currently in the clinical stage of developing new treatments for metabolic and endocrine disorders. The company is currently developing a promising weight management drug called VK2735, which targets the same receptors as Eli Lilly’s successful drug, Tirzepatide. VK2735 is a dual agonist that activates both GLP-1 and GIP receptors, which are involved in regulating appetite and glucose metabolism, making it a candidate for treating obesity.
Tirzepatide by Eli Lilly was approved by the FDA for diabetes treatment in 2022 and later for weight management in 2023. It generated substantial sales, reaching $11 billion in the first nine months of 2024, indicating a strong market demand for effective weight management solutions. The drug under development by Viking Therapeutics, Inc. (NASDAQ:VKTX) has shown promising results with Phase 1 trial patients taking the highest dose (100 mg) losing an average of 8.2% of their body weight after four weeks, which was significantly better than the placebo group (6.8% reduction).
The positive results from VK2735’s clinical trials have led to a significant increase in the company’s stock value, reflecting investor confidence in its potential to capture a large share of the market for dual receptor agonists. Alger Mid Cap Focus Fund in its second quarter investor letter stated that one-third of the US adults suffer from obesity and they believe that Viking Therapeutics, Inc.’s (NASDAQ:VKTX) upcoming drug has the potential to address a large market. Moreover, researchers at Goldman Sachs predict that the market for these drugs may reach $130 billion by 2030. It is the top stock that can make you rich in 2025.
Alger Mid Cap Focus Fund stated the following regarding Viking Therapeutics, Inc. (NASDAQ:VKTX) in its Q2 2024 investor letter:
“Viking Therapeutics, Inc. (NASDAQ:VKTX) is a clinical-stage biopharmaceutical company focused on developing novel therapies for patients suffering from metabolic and endocrine disorders. Their lead drug VK2809, a beta-selective thyroid hormone receptor agonist, is in development for nonalcoholic steatohepatitis and nonalcoholic fatty liver disease. Their VK2735 drug is a GLP-1 dual agonist being developed for patients with obesity. During the quarter, the company’s shares were negatively impacted by several factors: 1) a challenging environment for biotechnology stocks, exacerbated by Fed policy decisions to maintain elevated interest rates, 2) increased competition in the obesity treatment landscape, 3) manufacturability and scalability concerns regarding Viking’s obesity drug and 4) the absence of strategic partnerships from large pharmaceutical companies. Despite the challenging quarter, we continue to believe that the company’s GLP-1 drug has the potential to be a best-in-class obesity drug given its favorable efficacy and safety profile. Further, with approximately one-third of U.S. adults suffering from obesity, we believe the company’s GLP[1]1 drug has the potential to address a large market once approved.”
Overall VKTX ranks 1st on our list of the stocks that will make you rich in 2025. While we acknowledge the potential of VKTX as an investment, 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 VKTX 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.