We recently compiled a list of the 12 Best Growth Stocks Under $25 to Buy Now. In this article, we are going to take a look at where Remitly Global, Inc. (NASDAQ:RELY) stands against the other growth stocks.
AI is the Most Defining Theme of 2025, Says Expert
Most experts agree that the AI wave is not over yet. On January 8, Wendy Sheehan Donnell, Editor-in-Chief at PCMag, joined Yahoo Finance from CES 2025 to share her take on trending innovations and the increasing role of artificial intelligence in revolutionizing industries.
Donnell unveiled some of the groundbreaking innovations spearheaded by companies from across the globe and emphasized that “AI is the prevailing theme” across all these new products and services. She highlighted the incidence of AI-powered home devices such as smart microwaves and fridges to help people live smarter and tech-immersed lives. She also shed light on the growing role of AI in healthcare and biotechnology, which will contribute to the well-being of people.
A Glance at the Tech Sector in 2025
The market close on Tuesday reiterated a similar pattern where tech stocks continued to shine, however, some analysts expect the market to broaden over the course of 2025. On January 7, Joe Mazzola, head trading and derivatives strategist at Charles Schwab, joined Yahoo Finance, to discuss his market thesis for the tech sector especially.
Mazzola suggested that the market breadth was of importance in the earnings season, and pointed towards the strengthening of the US dollar and how it may impact the earnings of tech names. He added that the market needs the other “493 names” in the S&P 500 to catch up. Mazolla also emphasized that while 2025 can be a win for Big Tech like 2024, a broadening would help the overall market immensely in terms of earnings.
He added that the financials sector would supposedly catalyze the broadening of the market, because of favorable economic and market conditions. He then discussed the tailwinds for financials and how the same factors serve as headwinds to Big Tech, emphasizing that the bullishness on tech has been slower than it was at the end of 2024.
Our Methodology
We used Finviz to look for companies operating in growth sectors such as technology, financials (fintech), biotech, and communication services. We only focused on companies with a market cap of at least $2 billion and that gained more than 50% over the past 2 quarters. We then examined the hedge fund sentiment surrounding 25 stocks and picked the 12 stocks that were the most widely held by 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).
A senior banker shaking hands with migrant customers in a corporate boardroom.
Remitly Global, Inc. (NASDAQ:RELY)
Number of Hedge Fund Holders: 29
Share Price as of January 8, 2024: $23.21
Remitly Global, Inc. (NASDAQ:RELY) is a financial services company that allows people to send and receive money online from the United States. The company has a motive to help immigrants in the United States support their families back home, enhancing the sentimental value associated with the brand. In addition to that, the company also funds charities and programs to enhance the financial and social position of immigrants in the United States and their families. Over the years, the company has expanded to Europe, partnered with prominent names, and urged state organizations to enhance the financial and social inclusion of immigrants.
Aligning with its goals, Remitly Global, Inc. (NASDAQ:RELY) is leveraging machine learning to prevent fraud and minimize interventions. The company uses ML models to assess and detect thousands of transactions every hour, allowing them to prevent identity theft and credit card fraud with precision. In 2023, the company has been able to reduce the rate of fraud by more than 25% compared to 2022. At the same time, the company saw a 30% decline in its rate of transaction loss. Similarly, on December 10, the company launched a Trust and Safety Center in partnership with Get Safe Online to educate users on fraud and scams online.
Investors are bullish on the stock because of its fundamentals, expanding market share, and a solid growth trajectory. Night Watch Investment Management stated the following regarding Remitly Global, Inc. (NASDAQ:RELY) in its Q4 2024 investor letter:
“The US consumer has been in a 2-year affordability crisis. As a result, there are many quality consumer businesses available at very attractive prices. However, we don’t currently see a reason why US consumer spending should rebound from its current depressed level. We will therefore limit ourselves to companies with company-specific growth drivers. An example is Remitly Global, Inc. (NASDAQ:RELY) which we acquired around $13 after the stock sold off excessively on an earnings miss in Q1, despite the 30% growth on the back of market share gains. Valuation is very attractive when considering that marketing expenses are a discretionary reinvestment into the business.”
Overall RELY ranks 6th on our list of the best growth stocks under $25 to buy now. While we acknowledge the potential of RELY as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RELY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.