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.
U.S. Cellular (NYSE: USM): Positioned for Growth Amid Regulatory Changes
U.S. Cellular is emerging as an intriguing investment opportunity following President-elect Donald Trump’s victory. This win could signal a more favorable regulatory environment, which may pave the way for T-Mobile’s $4.4 billion acquisition of most of U.S. Cellular. The deal is expected to close by mid-2025, and this shift in regulatory dynamics could create a more straightforward path for approval.
As analysts have noted, there’s significant upside potential for both U.S. Cellular and T-Mobile shares due to the ongoing strategic review and asset sales at U.S. Cellular. Importantly, the risks associated with the acquisition appear to be diminishing, allowing for more confidence in the stock’s future performance. With a gain of nearly 57% this year and an impressive 78% surge over the past six months, U.S. Cellular is already showing strong momentum.
Looking ahead, U.S. Cellular is on track to evolve into a stand-alone tower company, which could lead to a surge in valuation. Currently, the stock has received mixed recommendations from analysts— 50% suggest a buy while 50% recommend holding. There are no sell recommendations, indicating a positive sentiment among experts. The median 12-month price target stands at $85, representing a 33% upside from its current trading price.
Given these factors, U.S. Cellular presents a compelling opportunity for investors seeking growth potential in the telecommunications sector. The combination of a favorable regulatory outlook, ongoing strategic initiatives, and strong historical performance makes this stock a worthy addition to any watchlist.
Penguin Solutions (NASDAQ: PENG) – Positioned for AI-Driven Growth
Penguin Solutions, formerly SMART Global Holdings, is gaining attention as a promising player in the growing enterprise AI market. Goldman Sachs recently initiated coverage on Penguin with a buy rating and a $21 price target, which represents an upside of nearly 40% from its recent closing price of $15.05. After a rough start to 2024, with shares down over 20%, Penguin is already showing signs of recovery, up 5.5% in early trading.
Penguin’s strength lies in its well-established presence in enterprise solutions across high-growth areas like computing, memory, and LED lighting. But it’s the company’s advanced computing segment—specifically its Penguin Computing unit—that has the most potential for significant AI-driven expansion. With over 25 years of experience in high-performance computing, Penguin is well positioned to meet rising demand in the enterprise AI space, where demand for robust, scalable solutions continues to grow.
Goldman Sachs analyst Michael Ng sees the company’s exposure to enterprise AI as a crucial driver of long-term growth. Despite the more cyclical nature of its memory and LED segments, Penguin’s AI potential is expected to offset any volatility, with a projected 13% compound annual growth rate (CAGR) in revenue over the next five years, driven by enterprise compute demand and recovery in cyclical markets.
With its strong foothold in AI-related computing and an anticipated operating margin expansion, Penguin Solutions is an intriguing pick for investors looking to capitalize on the accelerating demand in enterprise AI.
Exxon Mobil (XOM) – Primed for a Breakout
Exxon Mobil (XOM) has been in a consolidation phase for several months, but it’s looking ready to reawaken. After a strong climb from $33 at the March 2020 Covid low to $117 in March 2023—a gain of 250%—the stock has been trading within a tight range. This range-bound behavior suggests the stock is “resting,” but if it breaks out, we could see it moving up to the $128 mark.
Exxon Mobil’s appeal extends beyond price action. Known for its stability, Exxon is a top defensive stock with a long history of delivering reliable income. The company has paid an annual dividend for 46 consecutive years, making it a go-to for income-focused investors. While it did maintain its dividend in 2020 without an increase, Exxon has otherwise raised its payout each year, reflecting a strong commitment to shareholders. Right now, XOM yields 3.39%, significantly above the S&P 500’s 1.29% average yield, making it an attractive income play.
In a market that values both income and defensive positioning, Exxon’s blend of reliability and potential upside creates a compelling case for buyers. Given the setup, we’re buyers here as Exxon stands poised to break out from its current range.