Finding the right stocks in today’s market isn’t easy. With so many options, it’s tough to know which ones are worth your attention. But when you get it right, the payoff can be huge. That’s why we do the heavy lifting for you, sorting through the noise to bring you stocks that are set to move.
Each week, we dig into the data, look at market trends, and identify stocks with real potential. Our focus is on opportunities that aren’t just good for a quick win but have the strength to deliver ongoing growth.
This week, we’ve highlighted three stocks that stand out from the pack. Backed by solid analysis, these picks are positioned for a strong run in both the short and long term.
Spotify (NYSE: SPOT) – Growth Catalysts Set to Boost Margins
Spotify has had an impressive run in 2024, with shares surging nearly 34% this year and almost 18% in the past three months alone. Despite this strong performance, we believe there’s still plenty of upside ahead. Wells Fargo recently named Spotify a top pick, raising its price target by $50 to $470, which implies an additional 24% upside from Friday’s close.
One of the key reasons for this bullish outlook is Spotify’s evolving product mix and improving relationships with record labels. Analyst Steven Cahall sees incremental margins driven by price increases, its growing audiobook and bundle offerings, and new monetization strategies with labels. In fact, Cahall notes that about a third of record companies’ revenue comes from Spotify, a figure that’s expected to grow as both parties explore new avenues for revenue, including super fan engagement and potentially charging subscription fees to ad-supported users in mature markets.
Spotify’s focus on improving efficiency and managing overhead costs also positions the company as a premium growth stock. As the product mix shifts and Spotify’s partnership with labels deepens, we expect the company’s gross and operating margins to expand significantly over the next few years. Cahall is projecting operating margins to reach over 14% by Q2 of 2026, and climb to about 18% by the end of the decade.
With strong momentum and a clear path to margin expansion, SPOT is worth considering as a long-term growth play in the streaming space.
NuScale Power (NYSE: SMR) – Positioned for the Next Generation of Nuclear Energy
NuScale Power is emerging as a leader in the small modular reactor (SMR) space, offering investors a unique opportunity to get in on the ground floor of what could be a multidecade megatrend in energy. While traditional utilities have been slow to adopt SMR technology due to high upfront costs, tech giants like Google and Amazon are now stepping up to invest in advanced nuclear reactors. This shift is driven by the tech sector’s insatiable demand for reliable, carbon-free electricity to power AI data centers.
NuScale, with a market value of $4.7 billion, has already seen its stock jump 54% over the past month, signaling growing interest in this emerging sector. Although NuScale isn’t directly linked to the recent deals with Google or Amazon, its 5+ year regulatory head start and growing customer pipeline make it well-positioned to benefit from broader adoption of SMRs in the future.
Craig-Hallum recently raised its price target on NuScale Power to $21, up from $16, citing the accelerating momentum in nuclear power. The firm believes NuScale is primed to lead the charge as the world looks for sustainable energy solutions that can meet the increasing demand for baseload power while also helping to decarbonize the grid.
For investors with a higher risk tolerance, NuScale offers an exciting way to gain exposure to the future of nuclear energy. While the technology is still in its early stages, the growing commitment from tech companies to invest in SMRs suggests that the demand for this innovative solution could be far greater than previously appreciated.
Builders FirstSource (NYSE: BLDR) – Positioned for Strong Growth in a Tight Housing Market
Builders FirstSource is shaping up to be a top pick for investors looking to capitalize on long-term growth in the U.S. housing market. With the market still “structurally underbuilt,” this homebuilding supplier is uniquely positioned to benefit from rising demand, especially as headwinds in the multi-family market start to ease by 2025.
Of the 16 analysts covering the stock, 11 hold a strong buy or buy rating, and none are recommending a sell. With a projected compound annual growth rate of at least 7% in core organic sales through 2027, and earnings expected to grow by roughly 16% annually, Builders FirstSource is set for solid growth over the next few years. The company’s scale advantage, digital platform rollout, and its ability to grow with homebuilder customers are key factors driving this bullish outlook.
While the market may be cautious about ongoing softness in the multi-family space and uncertainties in building material costs, we see Builders FirstSource as being well-prepared to weather these short-term concerns. The stock has already gained nearly 9% in 2024, and with analysts forecasting a 12.5% price increase to an average target of $206.87, this is a stock worth considering for your portfolio.
With demand for housing expected to stay strong and BLDR’s growth initiatives kicking into high gear, this is a company with serious long-term potential.