Tech stocks dominated the market in 2024, with the “Magnificent Seven” (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla) leading the way. While these giants remain strong contenders for 2025, the tech sector offers plenty of opportunities beyond these household names.
This week, we’re diving into three tech stocks that stand out for their innovation and growth potential. These companies span sectors like artificial intelligence, quantum computing, and defense technology—areas that are expected to see substantial growth this year. Let’s explore why these stocks are catching our attention.
Kratos Defense and Security Systems (NASDAQ: KTOS) – A Leader in Military Drones
Kratos Defense and Security Systems specializes in high-performance drones designed for military and defense applications. With growing global demand for advanced defense technologies, Kratos has carved out a strong niche.
The stock has gained roughly 55% over the last 12 months, reflecting investor confidence in its growth potential. Of the 13 analysts covering the stock, eight rate it a buy or overweight, while the average price target sits at $30.17, offering 2.7% potential upside. Kratos’ focus on cutting-edge technology and its ability to secure high-value defense contracts position it well for continued growth in 2025.
For investors looking to capitalize on advancements in defense and aerospace, Kratos provides an innovative play in a sector with long-term demand.
International Business Machines (NYSE: IBM) – Leading the Quantum Computing Revolution
IBM is making waves in quantum computing, an area that’s poised to redefine industries from healthcare to finance. The company has made significant strides in both hardware, with its quantum processors, and software, such as its open-source quantum computing platform Qiskit.
Over the past year, IBM shares have risen 32.5%, and the stock still has room to grow. Analysts have mixed views, with 43% giving it a buy or overweight rating, and an average price target of $229.69, implying a 4.5% upside. IBM’s commitment to bringing quantum computing into mainstream use makes it an exciting option for investors seeking exposure to groundbreaking innovation.
As quantum computing continues to move from theoretical to practical applications, IBM’s leadership in this field could offer significant rewards.
Salesforce (NYSE: CRM) – Driving AI Integration in Business
Salesforce has become a major player in the AI space, seamlessly integrating AI into its customer relationship management (CRM) tools. The company’s flagship AI product, Salesforce Einstein, is a generative AI tool that enhances productivity and automates tasks for businesses. Additionally, Tableau and MuleSoft provide powerful solutions for data visualization and software integration, making Salesforce a comprehensive platform for businesses embracing AI.
The stock has gained nearly 17% in the last year, and analysts are bullish, with 42 out of 55 giving it a buy or overweight rating. The average price target of $401.36 suggests 26.3% upside potential, while some, like Michele Schneider, see the potential for Salesforce to hit $500, depending on broader market conditions.
For investors who want to ride the AI wave while focusing on a company with an established customer base and cutting-edge tools, Salesforce offers both stability and growth potential.