Now that the first quarter of 2025 is done and in the books, the stage is set for the rest of the year regarding where the market might deliver some excess results. With this in mind, investors now have a glimpse of some of the best names that could make for excellent buy-and-hold candidates at today’s prices and moving forward for the rest of the year, which is where today’s list comes into play.
Investors with a short-term focus should be cautioned, as this list highlights companies best suited for long-term holding, given their strong fundamentals and current undervalued prices. Some may view these prices as bargains, and the reasons supporting that view will soon become evident to investors.
Before diving deeper into these opportunities, the exposure and focus lie in the technology sector for the United States in shares of Alphabet Inc. (NASDAQ: GOOGL) as well as a powerhouse company across the world in China, where Baidu Inc. (NASDAQ: BIDU) comes into play for some additional upside. Lastly, an underrated name in the retail sector could become a clear wealth compounder in the years to come, and that is the importance of Ulta Beauty Inc. (NASDAQ: ULTA) in this list.
The Upside in Alphabet Is Clear
[content-module:Forecast|NASDAQ: GOOGL]When a giant like Alphabet, Google's parent company, sees its stock price drop, aggressive trading typically snaps up any chances to buy at a discount. This might explain why GOOGL's trading volume spiked to 36.6 million shares, compared to its usual daily average of 25.8 million.
Assuming that this rise in volume is due to buyers, it doesn’t have to remain a guess or assumption, as investors can examine a couple of gauges to determine where this new volume is coming from. Over the past quarter, up to $55 billion of institutional capital made its way into Alphabet stock to show a true commitment to buying the dip on this industry leader.
Now that the stock trades at 78% of its 52-week high, it makes sense to see institutional investors willing to invest in this stock, taking advantage of today’s prices. However, the bullishness and optimism don’t stop there, as a new Wall Street rating comes to reiterate this view further.
Analysts from Roth Mkm decided to reiterate their Buy rating on Alphabet stock as of March 2025, but that’s not all; these analysts also kept a valuation of up to $220 per share for the stock. This price target not only means a new 52-week high for the company but also a net upside of as much as 34.2% from today’s low prices.
China Flows Could Create Upside for Baidu Stock
[content-module:Forecast|NASDAQ: BIDU]Over the past month, increased volatility in the S&P 500 index has created a massive rotation to other markets, as they not only seem cheaper today but also fit a broader macro perspective. Some of this capital rotation has found its way to Chinese stocks, and that is the foundation of Baidu, which is becoming a potential opportunity today.
Investors can see this through price action as an indicator. The past quarter has shown Baidu outperforming the broader S&P 500 index by just over 10%, a significant factor to consider as momentum and value investors might start to see Baidu as an accretive addition to their portfolios.
Seeing this risk-to-reward setup as favorable for buyers might have led analysts from Benchmark to pick up on this potential easy win for their reputations. As of February 2025, these analysts kept their Buy rating on the stock and their $130 per share valuation.
Just like Google, this technology stock in China has the potential to make a new 52-week high through this new target and promises the potential for a rally of as much as 37.5% from where it trades today.
A Discount With High Returns in Ulta Stock
[content-module:Forecast|NASDAQ: ULTA]Now that this company has fallen to 66% of its 52-week high level, its discount status must still be justified as a potential buy today. Two things clearly point in that direction: the fact that skincare and makeup are some of the most recession-proof products in the economy and Ulta's underlying return on capital profile.
Knowing that people will likely always make room in their budgets for these products, no matter what the economy is doing, creates a somewhat predictable and stable set of cash flows for Ulta management to keep reinvesting efficiently into the growth of the business.
The result is a return on invested capital (ROIC) rate of up to 26.8% over the past 12 months, which matters because annual stock price performance typically matches the long-term ROIC rate. Ulta is a potential compounder in the coming years and a buy-and-hold candidate at today’s discounts.
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