Three Strong Conviction Buys for the Week Ahead

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.

HubSpot (HUBS) – A Software Winner in the DeepSeek Shake-Up

While much of the tech sector was rattled by the DeepSeek revelation last week, software stocks have emerged as a surprising bright spot. As AI spending shifts from an arms race in hardware to a focus on efficiency and application, companies like HubSpot could be well-positioned to benefit from the evolving narrative.

HubSpot has been on a tear in 2025, already up 12% this year after gaining 20% in 2024. Unlike companies directly tied to AI infrastructure spending, HubSpot is in a prime position to capitalize on the increasing need for AI-driven automation, CRM tools, and marketing software. Analysts at Canaccord Genuity and BMO Capital Markets have pointed out that greater competition and diversification in AI models could lower costs and drive broader adoption of AI-powered software solutions—exactly where HubSpot thrives.

With strong fundamentals, continued revenue growth, and a strategic position in the AI-driven software space, HubSpot looks like one of the tech names that could sidestep the volatility affecting other corners of the market. If AI investment trends shift toward application rather than just infrastructure, HubSpot stands to benefit in a big way.

Union Pacific (UNP) – A Dividend Powerhouse with Long-Term Growth Potential

Union Pacific has once again proven why it’s a top-tier dividend stock, surging last week following a strong Q4 earnings report and an optimistic 2025 outlook. As one of the dominant railroad operators west of the Mississippi River, Union Pacific benefits from limited competition, extensive infrastructure, and steady demand for freight transportation. These competitive advantages allow the company to grow earnings consistently while rewarding shareholders with dividends and stock buybacks.

Operational efficiency has been a major driver of Union Pacific’s recent success. The company managed to transport 5% more freight in 2024 while reducing its workforce by 3%, leading to higher margins and profitability. Despite only a modest 1% revenue increase, operating income rose by 7%, and net income jumped 6%. With an operating margin of 40% and a profit margin nearing 28%, Union Pacific continues to demonstrate why railroads remain some of the most capital-efficient businesses.

The company also boasts a highly diversified revenue stream, moving everything from agricultural products to industrial goods. While coal shipments declined 23% in 2024, growth in other categories helped offset the weakness. Looking ahead, management is optimistic about new opportunities in renewable diesel feedstocks and petrochemicals, helping position the business for long-term stability even as traditional energy sources like coal decline.

Beyond its operational strengths, Union Pacific is an income investor’s dream. The company has paid dividends for 125 consecutive years and has increased payouts annually since 2008. Over the past decade, the dividend has climbed 144%, while aggressive share buybacks have reduced the share count by 31%. Even after last week’s stock surge, Union Pacific trades at a reasonable 22.9 times earnings, with a forward P/E of 20.6. Given its strong balance sheet, consistent cash flow, and commitment to shareholder returns, Union Pacific remains a high-quality dividend stock worth owning for years to come. 

Vera Therapeutics (VERA) – A High-Potential Biotech at a Discount

Biotech stocks can be volatile, but when the long-term potential outweighs short-term price swings, investors should take notice. Vera Therapeutics is one of those opportunities. The stock has taken a hit in early 2025, falling more than 17% since the start of the year, but this pullback looks like a buying opportunity rather than a reason for concern.

The company’s lead drug candidate, atacicept, is showing strong promise as a treatment for autoimmune kidney diseases. Analysts see a clear path to commercialization beginning next year, with Vera having a substantial lead in its category. The potential market opportunity is significant, and atacicept’s differentiation from competitors could give it a lasting edge. If all goes as expected, sales could accelerate meaningfully in the latter half of the decade.

Beyond its strong clinical pipeline, Vera is also an intriguing takeover target. Recent biotech acquisitions suggest that large pharmaceutical companies are actively looking for promising drug developers, and Vera’s competitive positioning makes it an appealing candidate. With a price target of $58—implying a 56% upside from current levels—analysts see considerable room for the stock to run. For investors looking for an under-the-radar biotech with strong catalysts ahead, Vera Therapeutics could be worth a closer look.



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