In the ever-shifting landscape of the stock market, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.
This is where we step in. Every week, we comb through the market’s labyrinth, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.
This week, we’ve zeroed in on three standout stocks. These aren’t your run-of-the-mill picks; they are the culmination of rigorous analysis and strategic foresight. We’re talking about stocks that not only show promise in the immediate term but also hold the potential for sustained growth.
Block (NYSE: SQ)
“A Fintech Powerhouse with Strong Growth Potential”
Block, the parent company of Square, Cash App, and Afterpay, is shaping up to be a strong contender for 2025. The stock has already gained 21.2% this year, and there are compelling reasons to believe it’s just getting started.
Square, Block’s flagship point-of-sale system, is expected to see its gross payment value rise from 2% to 3% next year, driven by continued momentum in the small and medium-sized business segment. Meanwhile, Cash App and Afterpay are positioned for growth as regulatory pressures ease. Initiatives like increasing direct deposit penetration and integrating Afterpay into the Cash App ecosystem are expected to deliver mid-teens gross profit growth, with EBITDA growth projected at an impressive 30% as the company improves efficiency.
There’s also buzz around the potential for Block’s inclusion in the S&P 500, which could bring increased visibility and attract institutional investors. Analyst Harshita Rawat recently raised her price target on the stock to $120, representing a 35% upside from its recent close.
With its diversified business model and significant growth opportunities in both payment processing and digital finance, Block is a fintech stock worth considering for the long term.
Merck (NYSE: MRK)
“A Value Opportunity with a Strong Drug Pipeline”
Merck may not have had a standout year—its stock is down over 5% in 2024—but this pharmaceutical giant is quietly positioning itself for a rebound. After underperforming the broader market, Merck now trades at an attractive valuation, making it a compelling buy for long-term investors.
One area of concern has been slowing sales of its HPV vaccine Gardasil in China. However, Merck’s broader drug portfolio remains a key strength, with blockbuster treatments like Keytruda driving growth. The company is exploring extensions to the Keytruda franchise, which could unlock additional revenue streams in the years ahead.
Merck’s leadership also inspires confidence. CEO Rob Davis has been praised for his deep understanding of both the science and finance sides of the business, which has helped steer the company through challenging markets. Management’s disciplined approach to capital allocation was evident earlier this year when the company refrained from buying back shares until the stock dropped over the summer, improving its valuation.
While its recent performance has been lackluster, Merck’s strong portfolio, promising pipeline, and improved valuation present a solid entry point for investors looking to add a durable, defensive name to their portfolios.
Robinhood (NASDAQ: HOOD)
“Positioned for Growth with Big Ambitions”
Robinhood has been making waves this year, with its stock soaring over 200% year-to-date. The company’s recent first-ever investor day provided further clarity on its growth strategy, which includes expanding its crypto exchange business and a goal to become the top active trading platform within the next two years. These ambitious plans signal that Robinhood is ready to evolve beyond its roots as a fast-growing brokerage for younger investors.
What’s particularly compelling is Robinhood’s transition into what analysts are calling a “best-in-class” platform for sustainable asset and revenue growth. The company is also eyeing opportunities in international markets and wealth management, both of which could significantly expand its total addressable market. With robust operating leverage and improving profitability metrics, Robinhood appears well-positioned to capitalize on its momentum.
Goldman Sachs recently upgraded the stock to a buy with a price target of $46, implying an 18% upside from its current levels. The potential for deregulation in the financial and crypto sectors, coupled with Robinhood’s strong user base and ambitious growth outlook, makes this a stock worth watching for 2025. For investors seeking exposure to an innovative player in the fintech space, Robinhood offers a promising blend of near-term potential and long-term opportunity.
