As the Federal Reserve maintains its benchmark interest rate, investors’ focus sharpens on stocks with upside potential.
With limited room for movement in any direction, the stable rate sets the stage for a significant announcement later this week. It will reveal the Federal Reserve’s outlook for possible rate cuts later this year. This moment provides an excellent chance for investors to strategically set up their portfolios to capitalize on companies expected to thrive during these times.
Meanwhile, the U.S. labor market remains robust. Although the unemployment rate ticked up to 4%, the slight increase does not detract from its overall strength. This, coupled with continued job gains, adds to overall market stability. As we break down these economic indicators, understanding their interplay becomes critical for identifying investment possibilities with robust growth potential.
Thus, these top three stocks with upside potential should be your go-to investments any day of the week.
Stocks With Upside Potential: Alibaba (BABA)
Alibaba (NYSE:BABA) is one of China’s largest and most valuable companies. It is a leader in e-commerce and digital payments. Despite a tumultuous economic climate and a prolonged crackdown by Beijing authorities on digital enterprises, Alibaba has shown extraordinary resilience and managed to keep its footing.
Furthermore, Alibaba’s administration of China’s key eCommerce sites, Tmall and Taobao, has been critical to expanding its market reach and cementing its supremacy. The firm posted solid quarterly performance, with Taobao and Tmall seeing a double-digit bump in Gross Merchandise Volume (GMV). Additionally, its foreign commerce revenue skyrocketed by 45%, while cloud revenue increased significantly, owing mostly to a triple-digit increase in AI-related sales.
Yet, with such compelling financial performance, shares of BABA currently trade at just 9.53 times forward earnings, a valuation that underscores the stock’s potential for a comeback. This sentiment is echoed by TipRanks analysts, assigning Alibaba a Strong Buy rating with a remarkable 32% upside from its current value.
ACM Research (ACMR)
Semiconductor companies have been bustling since generative AI took the world by storm in 2023. Among these, ACM Research (NASDAQ:ACMR) stole the spotlight. Specializing in supplying advanced equipment for chip manufacturing, ACMR has achieved notable breakthroughs. Particularly, its Frame Wafer Cleaning Tool worked wonders to enhance efficiency and remove contaminants. This growing influence of ACMR has led its stock to surge by 106% over the past year.
Financially, ACMR performed exceptionally in its first quarter. The company reported a whopping 105% revenue increase, reaching $152.19 million, and operating income also jumped to $25.2 million from $8.9 million. That marks the eighth straight quarter ACMR has exceeded estimates, highlighting its strategic strength and operational excellence.
Looking ahead, ACMR is gearing up for more expansion. It’s recently planning to start production at its new facility in Lingang, Shanghai. Additionally, ACMR invests in its U.S. and Korean operations to tap into global opportunities.
These superb advancements and growth led TipRanks analysts to assign it a Strong Buy rating with a mind-boggling 69.17% upside.
Bitfarms (BITF)
Bitcoin (BTC-USD), the linchpin of the crypto market, has shown resilience, with price oscillating around the $70,000 mark recently. Though there has been choppiness in the crypto market lately, the bullish sentiment surrounding Bitcoin remains firmly intact.
Following these trends, Bitfarms (NASDAQ:BITF), a Bitcoin mining upstart, positions itself to capitalize on the underlying market dynamics.
It’s not just its price, though, as Bitfarms has considerably raised its hashrate, demonstrating its dedication to growing its mining operation. In Q1 2024, Bitfarms achieved a 7.6% rise in its hashrate, reaching 7.0 EH/s from 6.5 EH/s sequentially. Furthermore, it’s moving towards bigger goals, with the company intending to treble its hashrate to 21 EH/s by the end of 2024. This expansion points to a massive increase in mining activity in the upcoming quarters.
Furthermore, with zero debt and $124 million in liquidity, Bitfarms is an excellent vehicle to ride the crypto market. TipRanks analysts reinforce this outlook by assigning Bitfarms a Strong Buy rating and predicting a staggering 66.7% upside potential.
On the date of publication, Nabeel Bukhari did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.