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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

A Hidden Winner in Manufacturing and Energy Set for a Breakout

3d printer printing - stock image

The new year is starting, and investors have a much bigger incentive to find the best plays in the stock market before the first quarter of 2025 is done. This way, they can ensure that a good and hot quarter leaves them with confidence as well as capital leeway to take on “riskier” growth plays in the quarters to follow. As this chase for returns takes off, it is essential to remember what stocks analysts are starting to recommend.

As it turns out, those at Goldman Sachs decided to lead investors into the manufacturing and energy sectors, as they see a potential upside for oil, which is being singled out in the commodity space today. With this new 2025 macro outlook in mind, other Wall Street analysts must have started digging into these sectors to find the best.

They found the perfect mix of manufacturing and energy through shares of Xometry Inc. (NASDAQ: XMTR). This company offers manufacturing services to a variety of industries. Still, most of its clients are centered around the energy space, so success in both the Industrial Select Sector SPDR Fund (NYSEARCA: XLI) and the Energy Select Sector SPDR Fund (NYSEARCA: XLE) will translate into success for Xometry moving forward.

The Market’s Take on Xometry

Out of all the peers analysts could have picked for this theme, Xometry offered the most favorable risk-to-reward setup. Now that the stock trades at 73% of its 52-week high, the upside potential versus the perceived downside makes it a must-have for analysts today.

That is why, from December 2024 to January 2025, bullish analysts from J.P. Morgan Chase, Wedbush, and the Royal Bank of Canada decided to boost this stock. Wedbush analysts came in with the boldest targets through a tier outperform rating.

For Xometry stock, these analysts see a fair valuation as high as $48 a share, calling for as much as 44.5% upside from where it trades today. However bullish this view may be, analysts aren’t the only ones willing to share their optimism for this company.

Institutional buyers from Geode Capital Management decided to boost their holdings in Xometry stock by 4.3% as of November 2024, bringing their net position to a high of $18.3 million today. They were followed by Barclays and Franklin Resources shortly after, who accumulated a stake of $1.3 million and $731,000.

There must also be a reason why the market is willing to pay a forward price-to-earnings (P/E) ratio of up to 48.9x for this stock, compared to the rest of the industrial sector’s average of 20.1x. Some may call this expensive, but others will understand that the market will always pay a premium for stocks it believes will outperform in the coming months.

Due to recent bullish crude oil breakouts, Xometry shareholders are only getting ready for this double-digit upside to be realized even sooner.

Energy Stocks: A Sounding Board for Xometry

From here, investors can zoom out a bit to understand what is happening in the rest of the energy sector and get a sounding board and support for Xometry stock’s bull case. First and foremost, Warren Buffett has chosen to keep accumulating into Occidental Petroleum Co. (NYSE: OXY), which should tell investors volumes.

Then there is the fact that hedge funds have been piling onto crude oil futures to start the year, a second round of “institutional” and “smart money” buyers headed into the sector. Even Paul Tudor Jones, another hedge fund manager, said oil is unbelievably undervalued in a recent CNBC interview.

Here are two stocks investors can check individually for more sentiment gauges in the energy space. Starting with Chevron Co. (NYSE: CVX) as the international player leading the pack at over 93% of its 52-week high, analysts at the UBS Group now see a valuation at $195 a share, or 20.7% upside from where it trades today.

The price action and the Wall Street views are bullish for this one. Regarding the drilling space, higher up in the value chain, Transocean Ltd. (NYSE: RIG) shows investors that the oil demand curve might be shifting to the right.

There is an obvious bull case for this company to deliver up to 100% upside in the coming quarters, a fact that analysts and institutional buyers agree with. All told the stage is set for Xometry to prove these analysts right and bring investors the strong first quarter they are looking for.

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