We recently compiled a list of 7 Best Russell 2000 Stocks to Buy According to Analysts. In this article, we will look at where Amprius Technologies, Inc. (NYSE:AMPX) ranks among the best Russell 2000 Stocks to Buy According to Analysts.
The investor sentiment remains bullish toward the market, especially since the Fed’s recent decision to cut interest rates by half a percentage point, which is seen as a move to sustain economic health rather than a response to economic distress.
Moreover, the recent inflation report also showed positivity. After the first rate cut since March 2020, the August inflation report showed that the Personal Consumption Expenditures (PCE) price index rose 2.2%, the lowest level since early 2021. Core PCE, which excludes food and energy, also rose 0.1% for the month and recorded a 12-month increase of 2.7%.
While the market is reacting positively to the news, some experts are slightly worried about the market trends.
Bernstein’s Insights on Market Trends
Richard Bernstein, CEO of Richard Bernstein Advisors, joined CNBC ‘The Exchange’ on September 23 to discuss what’s happening in the market. He mentioned that stocks of small companies are not doing as well as riskier investments like cryptocurrencies. He is worried that the Federal Reserve is putting too much money into the economy, and it is not being spent wisely.
However, Bernstein believes that small and mid-sized companies will grow a lot by the end of the year, especially compared to the slower growth of big tech companies, such as the “Magnificent Seven.” Bernstein is also concerned that the Fed is lowering interest rates even though the profits are getting better, which might make the situation worse.
When asked if it’s time to focus on big tech stocks, Bernstein said many investors are doing that because of the current market trends. He thinks smaller companies offer better value and growth in the long run. He criticized risky investments like cryptocurrencies, saying they take money away from important areas like infrastructure, which could harm the economy. He warned that financial bubbles, where prices go too high too fast, can be just as harmful as regular inflation.
The bullish sentiment around small-cap stocks is also shared by Greg Tuorto, a portfolio manager at Goldman Sachs Asset Management, as we discussed his interview with Yahoo Finance in our article, 7 Cheap Small-Cap Stocks To Buy Now. Here is an excerpt from it:
“He [Greg Tuorto] highlighted several supportive factors for small caps, including a stable U.S. economy and opportunities in sectors like technology, healthcare, and consumer industries. Despite recent underperformance, he believes small caps are positioned for a rebound, driven by strong earnings growth rather than multiple expansions.
Tuorto also emphasized the potential for small caps to outperform large caps in 2025, given that their earnings outlook appears more favorable.”
Our Methodology
For this article, we made a list of the 35 biggest best weekly performers of the small-cap index in the week ending September 27. Next, we narrowed our list of 7 stocks with the highest average analyst price target upside. The stocks are listed in ascending order of their price target upside. We also added the hedge fund sentiment around each stock, which was taken from Insider Monkey’s database of over 900 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Amprius Technologies, Inc. (NYSE:AMPX)
Average Price Target Upside: 395.50%
Number of Hedge Fund Holders: 5
Amprius Technologies, Inc. (NYSE:AMPX), established in 2008, is solidifying its position in the energy storage sector with its advanced lithium-ion batteries. The company offers cutting-edge silicon anode technology, which significantly improves battery performance compared to conventional alternatives.
It is especially essential for aviation applications, including unmanned aerial systems (UAS) and electric vertical take-off and landing (eVTOL) aircraft. The company’s latest offerings, the SiCore and SiMaxx battery platforms, achieve impressive energy densities of up to 500 Wh/kg and 1,300 Wh/L, which makes them highly suitable for demanding electric mobility uses.
As per the coverage of 7 analysts, the stock has a consensus Buy rating. As of September 27, the average price target of $5.50 has a 395.50% upside from the present levels. It tops our list of the best Russell 2000 stocks to buy according to analysts.
Amprius Technologies (NYSE:AMPX) was part of 5 funds’ portfolios tracked by Insider Monkey and the total stake value was $840,000 in the second quarter.
In 2023, the company unveiled plans for a state-of-the-art gigawatt-scale manufacturing facility in Brighton, Colorado. The expansive 775,000-square-foot site is designed to meet surging customer demand for high-performance batteries.
The factory is said to begin operations in 2025, starting with an initial capacity of 500 megawatt-hours (MWh) and a potential to ramp up to 5 gigawatt-hours (GWh) within its initial footprint. The significant boost in manufacturing capability marks a crucial step in the company’s growth strategy.
In September 2023, the Brighton City Council approved an ordinance that allows Amprius Technologies (NYSE:AMPX) to utilize a substantial 103-acre site, which includes a large existing facility.
The approval is an important part of the company’s expansion, as it sets the stage for the production of next-generation lithium-ion batteries. The company is also focused on its existing facilities, with plans at Amprius Labs to advance production capacity by tenfold. The expansion will support current customers and aid in qualifying new customers, which could minimize risks as the company looks to capitalize on growth opportunities beginning in 2025.
As the aviation sector rapidly evolves, it is estimated that battery demand will surpass $49 billion by 2025. The company’s innovative products are well-positioned to capture a significant share of this market. By investing in advanced manufacturing capabilities and focusing on high-energy density solutions, it is making efforts to advance in a rapidly expanding industry.
Overall AMPX ranks 1st on our list of best Russell 2000 stocks to buy according to analysts. While we acknowledge the potential of AMPX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMPX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure. None. This article is originally published on Insider Monkey.