Investors are currently navigating a tempestuous economic landscape, largely shaped by the unpredictable tariff policies of the Trump administration. This week, the major stock indices experienced significant fluctuations, culminating in a Friday rally that, while temporarily uplifting, still left most stocks in the red for the week. Such conditions compel investors to exercise prudence and diligence in refining their portfolios, especially by focusing on companies that promise resilience and growth potential despite prevailing market headwinds. For those looking to get the upper hand, international market sentiment and the influences of global trade can create both challenges and opportunities.
Amid this backdrop, savvy investors can turn to Wall Street’s brightest analysts to uncover hidden gems—stocks that not only withstand short-term pressures but also exhibit the capacity for robust long-term returns. Today, we delve into three stocks that have collected the endorsement of financial analysts renowned for their acute market insights.
Zscaler: A Cybersecurity Powerhouse on the Rise
Leading the charge is a prominent player in the cybersecurity arena—Zscaler (ZS). This firm has garnered attention for its innovative Zero Trust Exchange platform, which competently safeguards users, devices, and applications from a growing onslaught of cyber threats. With the second-quarter results for fiscal 2025 exceeding market expectations, the company has reaffirmed its status as a cutting-edge solution provider. Analysts, such as Shaul Eyal from TD Cowen, are increasingly bullish, assigning a buy rating and projecting a price target of $270 per share.
The catalyst for this optimism can be traced to several strategic advancements within the company, particularly its focus on artificial intelligence (AI) and a revamped sales approach. Eyal highlights the increasing adoption rates and enhanced sales productivity, which appear to be setting Zscaler on a trajectory towards achieving $3 billion in annual recurring revenue by the end of fiscal 2025. Such an impressive projection does not come without its risks, particularly the looming specter of regulatory hurdles that could affect the tech industry at large. However, Zscaler’s formidable capture of the federal market—including servicing 14 of the 15 U.S. cabinet agencies—positions it strongly for future growth.
Costco: A Retail Giant Maintaining Stability Amid Challenges
Next on this list is Costco Wholesale (COST), a membership-based retailer that, despite facing challenges, has demonstrated remarkable resilience. Recent earnings reports revealed mixed results for the second quarter of fiscal 2025, highlighting higher revenues but falling short on earnings estimates. Even so, analyst Corey Tarlowe from Jefferies maintains a positive outlook, attributing the earnings miss to unavoidable external factors such as forex fluctuations.
What notably stands out about Costco is its ability to thrive when many competitors flounder. Despite a shrinking retail environment and ongoing supply chain disruptions, Costco reported a robust 8.3% rise in adjusted comparable sales, driven primarily by growth in non-food categories. While many retailers are reeling under tariff pressures, Costco’s diverse sourcing strategies—less than half its U.S. sales are subjected to recent tariffs—afford it a notable competitive advantage. Tarlowe remains optimistic, reiterating a buy rating with a price target projection increase to $1,180, which speaks volumes about Costco’s curated strategy in an uncertain market.
Karman Holdings: A New Player in Defense Systems Poised for Growth
The final entry on this compelling list is Karman Holdings (KRMN), a defense and space systems company that recently went public. Its diverse range of products—from payloads to missile defense systems—positions Karman to benefit significantly from increasing U.S. military spending and defense initiatives. Evercore analyst Amit Daryanani has initiated coverage with a buy rating and a price target of $38, fueled by strong indicators pointing towards sustained growth.
Given the geopolitical environment and the heightened focus on national security, Karman’s potential appears promising. Daryanani underscores the demand for missile defense technologies, reflecting a multi-year restocking initiative from the U.S. and NATO partners. The projected fiscal growth of 18% year over year to $409 million for fiscal 2025, coupled with a forecast for earnings per share approaching 36 cents, illustrates that Karman is not merely chasing trends but strategically ingraining itself into a burgeoning industry.
In this turbulent market, the emphasis on long-term value is paramount. The companies showcased here not only present substantial upside potential but also reflect a strategic savvy that is crucial amidst external pressures. Investing wisely in these sectors could well be the ticket to weathering the storm of market volatility.