This S&P 500 stock could rise 57% in 2025, according to Goldman Sachs

Shares in this well-known S&P 500 tech company can currently be snapped up for $61. Analysts at Goldman Sachs reckon the share price could hit $96 in 2025.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Having some portfolio exposure to S&P 500 stocks has really paid off this year. Over in the US, a lot of stocks have soared in 2024.

In 2025, it’s highly likely that the US stock market will throw up more opportunities for investors. With that in mind, here’s a look at a S&P 500 stock that Goldman Sachs believes could rise nearly 60% next year.

A well-known name

The stock I’m going to zoom in on today is Uber Technologies (NYSE: UBER). It’s a major global transportation and food delivery company.

Should you invest £1,000 in Uber Technologies right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Uber Technologies made the list?

See the 6 stocks

Its share price has been volatile in 2024. In October, it surged to $86, however, recently it has pulled back to $61 on the back of concerns about competition from Tesla.

Created with Highcharts 11.4.3Uber Technologies PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Goldman Sachs says Buy

Goldman’s analysts see this weakness as a major buying opportunity.

It has a Buy rating on the stock and a $96 price target – roughly 57% above the current share price. It has also named it as a top internet stock pick for 2025, stating that it has an attractive risk-reward skew.

Goldman’s number crunchers expect Uber’s gross bookings and adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) to grow at compound annual growth rates (CAGRs) of 16% and 39%, respectively, from 2023 to 2026. In other words, they see significant growth in the years ahead.

I’m buying

I like this call from Goldman Sachs. I’ve held Uber stock for a while now and I bought more shares last week near the $60 level. There are a number of reasons I’m bullish.

One is that I see plenty of growth potential. This is a company that’s continually expanding into new areas of travel (train rides, boat rides, car rental, bike/scooter rental, alcohol delivery, etc) and I reckon it will do well as the travel industry grows. I see the company’s instantly recognisable name as a major competitive advantage. When people need to get from A to B, Uber is usually the first name that comes to mind.

Another is that earnings are rising rapidly. This year, earnings per share (EPS) are projected to rise 98%. For 2025, analysts forecast EPS growth of 28%. That’s a higher level than most ‘Magnificent 7’ companies are forecast to generate.

Then there’s the valuation. Currently, the price-to-earnings (P/E) ratio here is only 26. I think that’s a steal given the company’s brand power, market dominance, and growth potential.

My view on the risk from Tesla

Now, there are risks here, of course.

The big one that a lot of investors are concerned about right now is competition from Tesla. Many investors seem to believe that Tesla’s self-driving taxis (which probably won’t be on the road for a few years) are going to disrupt Uber’s business model.

Personally, I think this risk has been overblown. Looking ahead, I believe that many automotive companies will have self-driving taxis, and I reckon Uber will be the platform that connects these companies with consumers.

So, while Tesla’s goals do add some uncertainty, I continue to see a lot of potential in this stock and believe it’s worth considering.

Investing in AI: 3 Stocks with Huge Potential!

🤖 Are you fascinated by the potential of AI? 🤖

Imagine investing in cutting-edge technology just once, then watching as it evolves and grows, transforming industries and potentially even yielding substantial returns.

If the idea of being part of the AI revolution excites you, along with the prospect of significant potential gains on your initial investment…

Then you won't want to miss this special report inside Motley Fool Share Advisor – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And today, we're giving you exclusive access to ONE of these top AI stock picks, absolutely free!

Get your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon has positions in Uber Technologies. The Motley Fool UK has recommended Tesla and Uber Technologies. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on US Stock

Investing Articles

I was wrong about the Tesla stock price!

Tesla stock's been affected more than most by ‘Liberation Day’. But our writer has other concerns about Elon Musk’s company.

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

£10,000 invested in Apple shares last week is now worth…

Apple shares are down 18% over the past week. It’s a truly phenomenal downward movement, but investors may want to…

Read more »

Investing Articles

2 defensive US growth stocks to consider even as the S&P 500 slides

With trade tariffs causing global market mayhem, risk-averse investors may want to consider shifting into defensive US growth stocks.

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

Growth stocks are crashing! Here’s what I’m doing now

Our writer shares his thoughts as growth stocks get crushed, as well as a favourite from the Nasdaq that he…

Read more »

Investing Articles

What’s going on with the Nvidia share price now?

The Nvidia share price is tanking. Once the most valuable listed company, Nvidia has seen more than $1trn wiped off…

Read more »

Investing Articles

As vehicle sales slump, should I buy Tesla stock on the dip?

Andrew Mackie assesses whether Elon Musk’s political leanings are destroying the Tesla brand or is now the time to be…

Read more »

US Stock

Apple stock is close to 52-week lows. Should I snap it up now?

Jon Smith discusses the double-digit percentage fall in Apple stock last week and weighs up whether now's the time to…

Read more »

Investing Articles

2 ‘safe-haven’ defensive shares to consider buying as tariffs hammer the stock market

Inflation fears are sending the prices of shares down, creating potential buying opportunities for investors. But which ones are likely…

Read more »