The Nasdaq Composite is a tech-centric index that tracks the performance of more than 3,000 stocks listed on the exchange. Just this week, the Nasdaq, the S&P 500, and the Dow Jones Industrial Average all climbed to record heights, the latest in a long line of all-time highs hit this year. The ongoing rally has a great many stocks at or near new record highs, leaving some investors to wonder whether there's still upside ahead.
Those concerns are unfounded, according to Wall Street, which remains remarkably bullish. As we close out the year, forecasts for 2025 continue to ratchet higher. While these targets are focused on the broader S&P 500, they can be instructive.
Analysts at Goldman Sachs predict the S&P 500 will hit 6,500 in December 2025, representing gains of roughly 7% compared to Thursday's closing price. Not to be outdone, Bank of America issued a year-end price target of 6,666 for 2025, or upside of 10% from its current level. Just this week, Wells Fargo issued the most bullish forecast yet, calling for the benchmark index to hit 7,007 next year, representing potential gains of about 15%.
Despite the recent run-up, opportunities abound. Let's take a look at two Nasdaq stocks with additional upside of up to 115%, according to certain Wall Street analysts.
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Sirius XM Holdings: Implied upside of 59%
The first Nasdaq stock with significant potential upside is Sirius XM Holdings (SIRI -1.32%). The company dominates satellite radio services in North America, with 34 million paying subscribers. Its customer base jumps to 150 million when you include its ad-supported Pandora music streaming service, so its audience is unmatched.
However, the recent economic downturn and a complicated merger took a toll. Decades-high inflation forced cash-strapped consumers to make difficult choices with their limited disposable income. Some, understandably, chose to let their SiriusXM subscription lapse.
There was also a fundamental misunderstanding of its recent merger, the reverse stock split, and the resulting complicated accounting transactions, which weighed on its results. These combined to drag the stock down 51% so far this year -- but things aren't as bad as they might seem at first glance.
In the third quarter, Sirius' revenue slipped 4% year over year to $2.17 billion while reporting a loss per share of $8.74, compared to diluted EPS of $0.82 in the prior year quarter -- but that needs context. The company took a one-time, non-cash impairment charge of $3.36 billion to goodwill related to its acquisition of Liberty Sirius XM tracking stock. Had it not been for that one-time charge, Sirius would have delivered EPS of roughly $1.17, an increase of 43%.
At the same time, paid subscribers increased by 14,000, resulting from lower churn. Paid promotional subscribers, which declined by 114,000 as automakers transitioned to shorter or unpaid plans, further weighed on the results.
Some on Wall Street believe the selling has simply gone too far. Included among their ranks is Benchmark analyst Matthew Harrigan. He maintains a buy rating on Sirius XM, with a price target of $43. That represents upside potential of 59% compared to Thursday's closing price. The analyst cites an investor disconnect surrounding the recent merger. He also believes that management's "strategic initiatives" will take hold.
Furthermore, the lower stock price represents a compelling opportunity for savvy investors, including Warren Buffett, who has been loading up on the stock. Sirius XM is currently selling for roughly 8 times earnings, with almost no future growth baked into the stock price -- and therein lies the opportunity.
I believe that, given the steadily improving economic conditions, churn will continue to slow, and subscriber growth will gradually return, which would be just the spark needed to send Sirius XM stock higher.
Symbotic: Implied upside of 115%
One consequence of the rise of online retail has been a rush to bring warehouse automation into the 21st century. That's where Symbotic (SYM -2.98%) comes in.
The company created artificial intelligence (AI) solutions to automate the processing of individual cases and full pallets to use every inch of available warehouse space. Symbotic developed advanced algorithms that control a legion of smart robots that work in concert to stock pallets, load and unload trucks, and isolate and handle individual crates. In doing so, the company can squeeze more inventory into less space, saving customers money.
By increasing efficiency, reducing labor costs, and slashing operating and delivery expenses, Symbotic's systems pay for themselves in short order. The company estimates that each "module" can pay for itself several times over during its useful life, saving companies tens or even hundreds of millions of dollars.
The results speak for themselves. In its fiscal 2024 fourth quarter (ended Sep. 28), Symbotic generated revenue that grew 47% year over year to $577 million while delivering EPS of $0.05, swinging from a sizable loss in the prior-year quarter. After announcing a restatement of earlier 2024 quarterly financial reports, management noted these resulted from timing differences with "no impact to full-year fiscal year 2024 results." On Thursday, Symbotic filed its annual report with no additional changes, removing the final overhang from the stock.
In the wake of the company's quarterly results, Cantor Fitzgerald analyst Derek Soderberg reiterated his overweight (buy) rating and $60 price target on the stock, which represents potential upside of 115% compared to Thursday's closing price. The bullish take came after the analyst quizzed management about its recent international expansion agreement with Walmex and the state of its warehouse-as-a-service joint venture.
Similar to many early-stage, high-growth stocks, Symbotic stock carries a bit of additional risk, so any position should be sized accordingly. On the bright side, after its recent sell-off, Symbotic is selling for a song at just 1.5 times sales. I would suggest that's an attractive price to pay for a leader in an emerging AI-fueled industry.
