3 stocks to buy to make a profit in 2025 News ad

When it comes to heading into 2025 on the right foot, investors may be wondering where the best place to place their capital is. While some may advise holding cryptocurrency or a mix of cash and bonds, this view is often too open-ended and vague to get investors where they need to be by the end of the first quarter of 2025.

With this in mind, a more specific list of stocks could be more useful, compiled based on real fundamental trends and data, so that the odds shift in their portfolios’ favor in the coming months. After reading Goldman Sachs’ 2025 forecast, it’s clear that short-term fundamentals favor a few specific companies and industries.

Overseas stocks could benefit from a potential dollar fall, and this is where companies such as Alibaba Group New York Stock Exchange: BABY come into play not only for retail investors but also for mega investors. Then domestic defense companies in the consumer goods sector could benefit greatly from economic fluctuations such as discounted stocks PepsiCo. NASDAQ: PEPor net exporters in the manufacturing sector such as Caterpillar Inc. New York Stock Exchange: CAT.

Double-digit growth potential for Alibaba shares: a must

When it comes to overseas equities, China appears to be the hardest-hit market, despite its bullish credit market fundamentals and recent government stimulus measures. This should signal to investors that the discounts on Chinese stocks are driven more by fear than by actual trends.

And this is where value investors like David Tepper and Michael Burry, who have made Alibaba shares their largest portfolio position over the past few quarters, are really worried. This level of conviction and focus should signal to investors that there are potential opportunities in the stock, of which there are many.

Not only is today’s entry at 72% of its 52-week high quite attractive, but Wall Street analysts believe a fair valuation for Alibaba stock should be much higher than it is today. Most notably, Macquarie decided to reiterate its Overweight rating on Alibaba shares, this time along with a $145 per share valuation.

This rating, assigned in October 2024, has remained unchanged despite increased stock volatility since then. This means investors can still expect a net upside of as much as 72% from today’s share price.

Pepsi discount won’t last long here

The thing about large-cap stocks, especially defensive ones, is that they have low beta. This means that they are not as susceptible to downward movements in the market and therefore offer greater protection to investors. The fact that Pepsi shares are trading at 78% of their 52-week high makes this a rare opportunity for value investors. advantage.

Typically, Wall Street analysts will refrain from making a bullish call on stocks that are trading at such low levels because their reputations could be affected by recommending stocks that have recently begun bearish momentum. However, Pepsi’s position in the beverage industry is so strong that it made sense to take advantage of this low-hanging fruit.

While the MarketBeat analyst consensus rating is a Hold, Deutsche Bank analysts led the way by maintaining a Buy rating on Pepsi shares back in December 2024, although this time they raised their price targets to $184 per share. To prove this new estimate correct, these analysts explicitly imply that Pepsi shares have room to rise up to 26.5% from today’s levels.

Moreover, there are representatives of the institutional side who have also decided to take matters into their own hands, for example, representatives of Geode Capital Management. The firm increased its stake in Pepsi shares by 1.8% in the latest quarter, bringing its net position to $5.2 billion, or 2.2% ownership in the company.

Net exporters could take off, including Caterpillar

That 2025 report made clear that manufacturing stocks that export more than they sell domestically are likely to do well. With a significant international presence, Caterpillar could potentially be a great buy in the coming months.

In fact, analysts at Truist Financial decided to end the year with a bang. They reiterated their Buy recommendation on Caterpillar shares and significantly increased their valuation. Having previously priced the stock at $454 per share, they now feel comfortable raising their targets to $471 per share, implying a net upside of 29.6%.

But the optimism for this stock doesn’t end there. Even bearish traders decided to abandon their short positions last month in the face of Goldman Sachs’ new view. Investors can see this theme in the 2.5% decline in short interest in Caterpillar shares over this period, signaling bearish capitulation and confirming bullish trends for 2025.

However, it’s worth noting that MarketBeat’s consensus rating for Caterpillar is a Hold, reflecting a balanced view among analysts. This suggests that while some are cautious, there is still significant upside potential, especially given recent rating upgrades and lower short interest rates. Investors may find this a good time to consider Caterpillar as a strong contender for growth in 2025.

Before you consider Caterpillar, you should hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts were quietly telling their clients to buy now, before the broader market caught on… and Caterpillar wasn’t on the list.

Although analysts currently rate Caterpillar a Hold, the top-rated analysts think these five stocks are Strong Buys.

View five stocks here

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