Over the past decade, investors have closely watched the performance of “FAANG” stocks, as they have been among the most popular and best-performing technology companies in the United States.
FAANG, of course, is an acronym for five of the best-performing tech-oriented stocks over the past several years: Facebook (now Meta), Amazon, Apple, Netflix and Google (now Alphabet.)
But for those looking for the highest upside potential moving forward, it’s important to look for those companies that will emerge as the “next FAANG” stocks.
In other words, what companies stand poised to dominate their industries and potentially change the way we live as the original FAANG companies have done?
Below is a list of five companies that appear well-positioned to potentially lead their industries and take the leap forward to becoming the “next FAANG” stocks in the months and years ahead.
As always, be sure to do your own due diligence before investing in any stock to make sure it’s right for your financial situation and that it is consistent with your acceptable level of risk.
- Evolv Technologies Holdings, Inc. (Nasdaq: EVLV)
Evolv Technologies Holdings, Inc. (Nasdaq: EVLV) provides artificial intelligence (AI)-based weapons detection for security screening in the United States and internationally.
Its products include Evolv Express, a touchless security screening system designed to detect firearms, improvised explosive devices, and tactical knives; and Evolv Insights that provides self-serve access, insights regarding visitor flow and arrival curves, location specific performance, system detection performance, and alarm statistics.
With the security screening industry valued at $7.14 billion in 2023 and projected to grow to $9.81 billion by 2028, Evolv is in a prime position to continue its growth as an industry leader.[i]The company’s track record of innovation – including leading the way in the deployment of AI technology in its industry – could help fuel a significant growth in market cap in the coming years.
Analysts are bullish on the company as well, having established a consensus target price of $5.75 per share. This represents a forecast upside of 64.8% from its current price of $3.65 per share.[ii]
- Block, Inc. (NYSE: SQ)
Block, Inc. (NYSE: SQ) (formerly Square, Inc.) is a parent company to a host of digital financial solutions including Square, Cash App, TIDAL, and TBD. The company builds ecosystems focused on commerce and financial products and services in the United States and internationally.
The company was founded in 2009 by Twitter founder Jack Dorsey to provide payment and POS solutions that include hardware and software. With Dorsey no longer running Twitter, he has announced that he will working on Block full-time, which could lead to higher growth and more innovation moving forward.
During the company’s Q1 2024 earnings call, management stated, “We continue to focus on initiatives that improve our product velocity. These include several upcoming launches that further our strategies for Cash App and Square, most notably testing and rolling out Afterpay on Cash App Card. And for Square, completing the orders migration this summer and conversion to a single app by year-end. These initiatives remain on track, and we expect them to benefit our growth into 2025 and beyond. For profitability in 2024, we are now expecting at least $1.3 billion in adjusted operating income or 15% margins on gross profit.”[iii]
The majority of Wall Street analysts maintain a “Moderate Buy” rating on the stock, with a consensus price target of $86.20, which represents a 34.6% upside from the current share price of $64.29.[iv]
- Coinbase Global, Inc. (Nasdaq: COIN)
Coinbase Global, Inc. (Nasdaq: COIN) is among the world’s largest and foremost cryptocurrency exchanges. The company provides financial infrastructure and technology for the cryptocurrency economy in the United States and internationally.
The company offers the primary financial account in the crypto economy for consumers; and a marketplace with a pool of liquidity for transacting in crypto assets for institutions. It also provides technology and services that enable developers to build crypto products and securely accept crypto assets as payment.
As the popularity and acceptance of cryptocurrencies continues to grow, Coinbase offers an opportunity to invest in this megatrend without investing in any specific currency.
Because it lists more than 50 top cryptocurrencies, this investment is potentially more robust than investing in any single coin. So as the cryptocurrency market continues to grow, the potential for Coinbase should grow along with it.
Analysts have established a consensus target price of $248.38 per share. This represents a forecast upside of 23.0% from its current price of $203.15 per share.[v]
- Uber Technologies, Inc. (NYSE: UBER)
Uber Technologies Inc. (NYSE: UBER) is a San Francisco-based company providing mobility, food and package delivery services and freight transport. Uber operates in approximately 10,500 cities in 72 countries.
The company recently reported its financial results for the second quarter 2024 and the market was pleased, as Uber beat Wall Street estimates for both revenue and earnings per share. The company’s Q2 gross bookings grew 19% year-over-year to $40 billion.[vi]In addition to the positive earnings news, the company also demonstrated that it has become more fiscally responsible, with operating expenses increasing at a much lower rate than Uber’s sales gain.
The company’s shares have soared more than 165% since the beginning of 2023 and the market remains enthusiastic about the future for Uber. The company continues to invest in new products and markets as it looks to grow its leadership position.
Analysts have established a consensus price target of $87.47 per share for Uber, which represents a forecast upside of 19.9% from its current share price of $73.25.[vii]
- Snowflake Inc. (NYSE: SNOW)
Snowflake Inc. (NYSE: SNOW) provides a cloud-based data platform for various organizations in the United States and internationally.
Its platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data and data products, as well as applies artificial intelligence (AI) for solving business problems.
Snowflake offers significant upside potential because it can not only store data and systems in its cloud-based system, but it can also provide such a broad range of data analysis services as well.
The continuing shift of workloads to the cloud should provide a strong tailwind for Snowflake moving forward.
Additionally, the company’s suite of AI-enabling products (including Cortex and Arctic) along with its push for partnerships and acquisitions to further bolster its AI capabilities should position it as a leader in the AI space as well.
Analysts have given the company’s shares a consensus rating of “Moderate Buy” with 24 buy ratings, 9 hold ratings and 2 sell ratings. The consensus price target of $197.97 per share represents a forecast upside of 55.2% from the current price of $127.76.[viii]
[i] https://finance.yahoo.com/news/security-screening-market-projected-reach-145100605.html
[ii] https://www.marketbeat.com/stocks/NASDAQ/EVLV/
[iii] https://finance.yahoo.com/news/block-inc-nyse-sq-q1-164156744.html
[iv] https://www.marketbeat.com/stocks/NYSE/SQ/
[v] https://www.marketbeat.com/stocks/NASDAQ/COIN/
[vi] https://investor.uber.com/news-events/news/press-release-details/2024/Uber-Announces-Results-for-Second-Quarter-2024/default.aspx
[vii] https://www.marketbeat.com/stocks/NYSE/UBER/
[viii] https://www.marketbeat.com/stocks/NYSE/SNOW/
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