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The markets have been rattled this year by fears that President Donald Trump’s tariff-induced trade war could lead to a potential recession.
Amid this uncertainty, growth stocks are less favored, as they typically take longer to reach their full potential and are often seen as risky investments. However, savvy investors with a long-term investment horizon may want to take a closer look at these two tech stocks, which Wall Street currently rates as “Strong Buys.”
Stock #1: Powerfleet
New Jersey-based PowerFleet (AIOT) is a tech company that provides Internet of Things (IoT) and artificial intelligence (AI)-powered solutions for fleet management, asset tracking, and vehicle safety. The company uses telematics, AI, and data analytics to help businesses monitor and optimize their trucks, trailers, forklifts, and other industrial equipment. Valued at $750 million, PowerFleet’s stock has fallen 12.4% year-to-date, compared to a 5.1% drop in the S&P 500 Index ($SPX).
PowerFleet’s AI-powered fleet management technology assists businesses in lowering costs, increasing efficiency, and improving safety. Its revenue rose from $81.9 million in 2019 to $133.7 million in 2023. Its strategic acquisitions, which include a merger with MiX Telematics in 2023 and Fleet Complete in 2024, have set the company up for significant growth. In the most recent third quarter of fiscal 2025, total revenue increased by 45% to $106.4 million, driven by a 45% increase in service revenue and a 42% increase in product revenue. The company ended the quarter with 2.6 million recurring revenue subscribers.
However, it is not profitable yet, with adjusted net losses in the quarter down to $0.01 per share, from $0.03 per share in the prior year. Adjusted EBITDA increased 77% to $22.5 million, driven by the Fleet Complete acquisition, organic growth, and cost synergies. The company has achieved $15 million in annualized savings through its cost synergy program and expects to reach $16 million by the end of fiscal 2025.
PowerFleet has raised its financial outlook for 2025. It now expects annual revenue to exceed $362.5 million, up $10 million from its previous estimate of $352.5 million. Adjusted EBITDA could exceed $75 million, up from previous guidance of $72.5 million. Both figures include $5 million in guaranteed annual run-rate synergies. Analysts covering AIOT stock anticipate a 27.4% revenue increase in fiscal 2025, followed by another 22% increase in fiscal 2026. In fiscal 2026, the company could report a full-year profit of $0.13.
On Wall Street, PowerFleet stock is a “Strong Buy.” Out of the seven analysts covering the stock, six rate it a “Strong Buy” and one says it is a “Moderate Buy.” The average target price of $11.50 suggests the stock can rally as much as 93% over current levels. Plus, the high target price of $15 suggests an upside potential of 151% over the next 12 months.
PowerFleet appears to be a promising opportunity, given its growth potential and the expanding market for IoT and AI-powered fleet management solutions. However, because the company is in its early stages of development, it is also risky.
Stock #2: Adyen
Adyen (ADYEY) is a Dutch global payments company that offers end-to-end payment solutions to businesses. It is a fintech company that allows merchants to accept online, in-store, and mobile payments on a single platform. Adyen powers payments for some of the world’s largest companies, including Uber (UBER), eBay (EBAY), Meta Platforms (META), H&M, Microsoft (MSFT), and KFC. So far this year, Ayden’s stock is up nearly 11%.
Besides offering payment processing and point-of-sale solutions, Adyen’s AI-powered tools also help detect and prevent fraudulent transactions. For the half year ended Dec. 31, net revenue grew 22% year-over-year to 1.08 billion euros. For the full year 2024, revenue grew 23% to 1.9 billion euros. Processed volume increased by 33% while point-of-sale volumes rose 46% over the last year. This expansion is due to a rising demand for global payment solutions and strengthened partnerships with existing clients. EBITDA increased by 34% year on year to 992.3 million euros.
Adyen’s strategic initiatives, strong financial performance, and resilience in a competitive market position the company for long-term growth. Nonetheless, the payments industry is fiercely competitive, with companies like PayPal constantly innovating to gain market share. Adyen’s strategy of diversifying its merchant base and improving platform capabilities will be critical to maintaining its competitive advantage.
In the shareholder letter, management highlighted that Adyen launched Adyen Uplift in 2024, an AI-powered technology designed to optimize the payments funnel. Uplift is designed to improve conversion rates, reduce risk, and lower costs. According to data obtained, Uplift has helped businesses achieve a 6% increase in payment conversion rates compared to traditional systems in 2024.
Furthermore, the company is expanding into new industries while strengthening its position in traditional sectors. In 2024, it formed partnerships with insurance and healthcare providers. Even the U.S.-based fintech company Intuit (INTU) has chosen Adyen to improve its payment operations in the United Kingdom.
Analysts expect rapid growth in the next two years. In 2025, revenue could increase by 29.7% to $2.7 billion, followed by earnings growth of 22.9%. Revenue and earnings could further increase by 25.2% and 25.4%, respectively, in 2026.
On Wall Street, Adyen stock is a “Strong Buy.” Out of the 18 analysts covering the stock, 15 rate it a “Strong Buy,” one says it is a “Moderate Buy,” and two rate it a “Hold.” The average target price of $22 suggests the stock can rally as much as 35% over current levels.
