Navigating the stock market can be a high-stakes game. Choose incorrectly, and your portfolio might suffer. But the right choices? They could be your ticket to financial triumph. With thousands of stocks to choose from, pinpointing those poised for success is no small feat. It’s a daunting task, requiring hours of market analysis and company research – time that many people simply don’t have.
That’s where we come in. Each week, we delve deep into the market’s vast array of options, sifting through countless possibilities to bring you a select few. These are not just any stocks; they are carefully chosen based on solid research, current market trends, and potential for noteworthy growth.
This week, we’ve honed in on three stocks that stand out from the crowd. Our picks go beyond the mainstream; they’re strategic selections, crafted for significant impact in both the immediate future and over the long haul.
Read on and discover the full watchlist and unveil these exceptional stock picks.
IBM (IBM): Positioned for Growth in Hybrid Cloud and Software
IBM is worth a close look as it heads into its quarterly earnings report on January 29 and its investor day on February 4. The company has been strategically focusing on expanding its hybrid cloud and infrastructure software portfolio, particularly targeting large enterprise customers. This focus positions IBM to capitalize on a lucrative market, especially as businesses continue transitioning to hybrid cloud environments.
One key factor to watch is IBM’s ability to drive sustained growth in its software segment. Software now represents a larger portion of IBM’s business mix, and the company’s success in accelerating this segment could lead to a meaningful re-rating of the stock. As the software mix improves and IBM demonstrates consistent financial performance, the potential for long-term growth becomes increasingly attractive.
IBM’s shares are already up more than 2% this year, but there’s more room for upside if management can clearly articulate a strategy to sustain growth in software revenues. The company’s ongoing focus on software M&A to strengthen its hybrid cloud offerings further underscores its commitment to this growth path.
For investors looking for a mix of stability and growth, IBM’s combination of software expansion, improving financials, and upcoming catalysts makes it a compelling addition to a watchlist. With earnings and investor day announcements just around the corner, now is a great time to keep this stock on your radar.
Levi Strauss (LEVI): Poised for Growth in 2025
Levi Strauss (LEVI), the iconic denim brand, could be set for a strong 2025, with several growth opportunities that make it a standout addition to your watchlist. Despite some challenges, including macroeconomic pressures like tariffs and currency fluctuations, the company’s strategic initiatives suggest significant potential for long-term gains.
One of the most promising aspects of Levi Strauss’ strategy is its focus on addressing share loss in the men’s bottoms category while driving growth in the women’s segment, which is poised to become a significant catalyst for sales. Additionally, the company’s direct-to-consumer investments and optimization of its product assortment should help improve both margins and operational efficiency. Barclays has highlighted these moves as key factors underpinning their $24 price target, implying an impressive 36% upside from recent levels.
Wholesale normalization is also expected to contribute to top-line growth, alongside streamlining efforts that could further boost productivity. Levi Strauss’ sales-to-inventory growth over the past four quarters underscores its operational improvements and ability to navigate inventory challenges.
With shares already up about 9% over the past year, Levi Strauss has shown resilience in a tough retail environment. For investors looking for a company with strong brand recognition, strategic growth plans, and meaningful upside potential, Levi Strauss is worth serious consideration.
Amazon (AMZN): A Dominant Force in E-Commerce and Cloud Computing
Amazon (AMZN) is well-known for its e-commerce dominance, holding an impressive 40% share of the U.S. market, far outpacing Walmart’s 7%. In its most recent quarter, Amazon’s North American sales grew 9% to $95.5 billion, showcasing the strength of its retail business. However, the real growth engine for Amazon is its cloud computing arm, Amazon Web Services (AWS).
AWS delivered an operating income of $10.4 billion in Q3 2024, a nearly 50% increase year-over-year. This makes AWS not only Amazon’s most profitable segment but also a critical driver of future growth. With the global cloud computing market projected to hit $2 trillion by 2030, Amazon’s 31% market share positions it as the clear leader in the space.
The rise of AI is further fueling demand for cloud infrastructure, and Amazon is set to benefit from this trend. With a forward P/E ratio of 35, Amazon is only slightly more expensive than Microsoft (P/E 32), making it an attractive option for investors seeking exposure to cloud computing’s explosive growth potential.
For those looking to invest in a company with proven leadership in two massive industries—e-commerce and cloud computing—Amazon remains a solid choice for long-term growth. Now could be an excellent time to consider adding this powerhouse to your portfolio.
