The financial realm is currently engrossed in turmoil, thanks largely to the unpredictable tariff strategies coming from the Trump administration. As analysts and investors rapidly adjust their strategies to manage risk, the resultant volatility in stock prices offers both challenges and unique opportunities. In such a chaotic landscape, discerning investors can thrive by identifying stocks that not only weather short-term pressures but also possess robust long-term growth potential.
With this in mind, it’s imperative to analyze which stocks are currently favored by respected analysts on Wall Street. This week presents a trio of compelling picks, especially for those inclined to invest in companies resilient enough to advance amidst these economic headwinds. While certain stocks have stumbled in this tumultuous environment, others have rallied, suggesting an intriguing bifurcation in market performance.
Zscaler: A Beacon in Cybersecurity
First on the agenda is Zscaler (ZS), a cloud-based cybersecurity firm making significant waves with its innovative Zero Trust Exchange platform. This platform is lauded for its ability to seamlessly protect users, devices, and applications from the growing tide of cyberattacks. Zscaler’s recently reported fiscal Q2 results have sent ripples through the market, showcasing resilience against the backdrop of uncertainty—an essential trait for today’s challenging investing landscape.
Analyst Shaul Eyal from TD Cowen emphasizes that Zscaler’s success stems from multiple factors, including its revamped go-to-market strategies and enhancements in sales productivity. The company’s focus on artificial intelligence also bodes well for its future, as their annual contract value from AI-enabled services has reportedly nearly doubled. With projections aiming for $3 billion in annual recurring revenue by the end of fiscal 2025, it’s clear that Zscaler is not just riding the wave of current trends but actively shaping its own future. Serving a substantial portion of U.S. government entities, Zscaler stands poised to benefit from essential government efficiency initiatives—a clear indicator that both public and private sectors are increasingly recognizing its value.
Analysts are placing heightened confidence in Zscaler, and rightly so. The firm operates in an industry that is only expected to expand as the digital world becomes more complex and dangerous. Therefore, Zscaler appears to be a solid investment for those hunting for stability in an increasingly insecure market.
Costco: Resilience in Retail
Contrasting the tech-heavy landscape, we turn to Costco Wholesale (COST), a retail juggernaut that has recently shown that resilience in sales can still lead to investor disappointment. Their second-quarter earnings report highlighted solid revenue growth, yet earnings fell short of expectations, a stark reminder that even giants face market headwinds. Nonetheless, it’s Costco’s strategic position in the arena of low-cost retail that makes it worthy of further examination.
Analyst Corey Tarlowe of Jefferies credits Costco for its impressive adjusted comparable sales growth of 8.3%, riding the strength of non-food sales categories. This is a commendable achievement, especially as many retailers experience hardship due to inflation and shifting consumer behaviors. Additionally, Tarlowe asserts that Costco’s relatively low dependency on imported goods will help it avoid some of the negative repercussions from the Trump administration’s tariffs.
Investors should take note of Costco’s strategic growth plan. With its capacity to further expand warehouse locations and continue driving customer loyalty through membership fees, the company’s economic outlook remains largely positive. For those seeking investments that combine stability with growth potential, Costco offers a compelling case.
Karman Holdings: The Future of Defense and Space
Rounding out our selections this week is Karman Holdings (KRMN), a newly public player in the defense and aerospace markets. While many stocks are impacted by macroeconomic factors, Karman thrives in an environment characterized by increasing defense budgets and a burgeoning focus on national security. Analyst Amit Daryanani’s initiation of coverage on KRMN reflects a broader optimism in the defense sector, particularly as the U.S. and NATO allies initiate significant restocking of missile inventories.
Daryanani forecasts Karman’s sales growth at a striking 18% year-over-year for fiscal 2025, and he sees potential for substantial margin expansion due to robust demand in missile defense and hypersonics. Karman’s unique offerings and strategic positioning allow it to excel in a fast-evolving marketplace where military priorities are continually shifting, making it a wise investment for those willing to embrace the risks inherent in a fluctuating economy.
As tariffs and tumult continue to shape the market landscape, investors would do well to consider these three stocks: Zscaler, Costco, and Karman Holdings. Each offers a distinct avenue for growth while demonstrating resilience typical of stocks poised for long-term success amidst chaos.