3 Must-Hold Stocks With Double-Digit Upside for 2025

Key Points

• Now that 2025 is around the corner, investors should align their portfolios with the best risk-to-reward setups in the market.
• These stocks offer double-digit upside potential with very little downside risk.
• Wall Street analysts and institutional investors agree with these setups and have been buying the dips in these stocks.

Now that 2024 has come to an end, investors may be looking for the best opportunities to place their bets on 2025. That is why aligning portfolios with stocks that carry double-digit upside is so important in today’s market. However, there is a big difference between picking a stock only because of its upside and choosing one that has said upside but also offers very little downside risk.

In today’s list of winning stocks, that is exactly what investors will be taking away for the new year, stocks with double-digit upside potential, but that, due to their low prices right now, also offer very little risk to the downside. Loading up a portfolio with these risk-to-reward profiles is the foundation everyone would need for a winning year. With that strategy in mind, here are the stocks investors should watch for 2025.

Starting with what some could call a titan on its knees, there is Intel Co. NASDAQ: INTC, a technology stock that now trades at only 40% of its 52-week high to offer the low downside aspect that investors should carry. Then, there is the consumer discretionary giant and one of China’s best propositions for 2025, Alibaba Group NYSE: BABA, trading at 72% of its 52-week high. Finally, to cover the consumer staples sector at 45% of its 52-week high, Dollar General Co. NYSE: DG takes the podium.

Institutions Bought The Bottom of Intel Stock

Based on a volume analysis, there are reasons to believe that Intel stock has attracted many new buyers within its recent $18.50 to $20.0 a share range. Investors can reiterate their suspicions of new buyers when they examine the recent institutional buying activity for Intel stock.

Leading the pack, as of November 2024, were those from State Street, who decided to boost their holdings in Intel stock by as much as 2.8%. While this may not sound like much in percentage terms, it did bring the group’s net holdings to a high of $4.6 billion today, or 4.6% ownership in the company.

One reason to buy this much Intel stock is the future upside potential. Wall Street analysts forecast up to $0.29 earnings per share (EPS) in the next 12 months, a significant jump from today’s net loss of $0.46 a share. To justify this swing into profitability, investors can consider the fact that the government has granted Intel most of the capital within the CHIPS and Science Act.

With institutions and the government betting on Intel to guard and build the domestic semiconductor production supply chain, it shouldn’t come as a surprise for investors to see price targets from Wall Street analysts land on a consensus $30 a share, which translates to a net 48% upside potential from today’s low price.

Mega Investors Like Alibaba for 2025

Some names from the fund management world made headlines in 2024 and will likely continue to do so in 2025. Michael Burry, David Tepper, Ray Dalio, and even George Soros are all bullish on Chinese stocks. Not only were their opinions bullish on China, but their actions also spoke for themselves.

Both Tepper and Burry have now made Alibaba stock the largest stock position in their respective portfolios, and it makes all the sense in the world. The Chinese government is loading up a bazooka of stimulus measures to rescue not only China’s economy but also its stock market, an effect that will bring major rallies once it trickles down.

This is why bearish traders have been running out of Alibaba and their short positions, something investors can note from the 12.8% collapse in the company’s short interest over the past month alone. That might have led some analysts on Wall Street to start boosting the company’s valuation in recent weeks.

Particularly those from Barclays, who now see Alibaba as an overweight-rated stock and want to see it at a $130 a share valuation based on these ratings. To prove them right, Alibaba would have to rally by as much as 52.8% from where it trades today, offering minimal downside risk considering how close to its 52-week low it trades right now.

Why Dollar General Stock Attracted Buyers

As of November 2024, those at State Street also justified buying stock in Dollar General on top of their Intel stock purchase. For Dollar General, an 8.3% boost would mean a net position of $842.2 million today, or 4.5% ownership in this stock as well.

Because of the way that the United States economy is going today, a risk of inflation coming back could get investors chasing the value proposition in the way that Dollar General makes everyday shopping affordable for its consumer base. Knowing this, it would make sense to see analysts from Goldman Sachs boost the stock the way they did recently.

As of December 2024, a buy rating came alongside a price target of up to $104 a share for Dollar General stock, implying a potential rally of 37% from where it trades today. Moreover, even if the rally takes a bit longer than expected, investors have an added bonus to this trade.

A payout of $2.36 a share would offer a dividend yield of up to 3.1% today, outpacing inflation rates and keeping the stock position attractive while this double-digit upside is realized in 2025.