In the midst of economic tumult and erratic stock performances driven by evolving trade policies, savvy investors are seeking stability. The most recent volatility—triggered by the Trump administration’s aggressive tariff rhetoric—has left the market unsettled, yet there are undercurrents of opportunity for discerning investors. Analysts are closely scrutinizing the market and presenting stock picks that offer both resilience amidst current pressures and potential for substantial, long-term returns. Here’s an analysis of three stock selections that stand out.
Zscaler: The Cybersecurity Beacon in Uncertain Times
First on the radar is Zscaler (ZS), a cloud-based cybersecurity powerhouse that has recently garnered attention for its innovative Zero Trust Exchange platform. The ongoing digital transformation has made security paramount, and Zscaler is not just responding; it’s thriving. With reported earnings for fiscal 2025 that exceeded expectations, driven by a robust demand for its cybersecurity solutions, Zscaler’s performance highlights a vital trend—AI is now a key driver of growth in cybersecurity.
TD Cowen analyst Shaul Eyal’s reiteration of a buy rating, alongside a price target of $270, encapsulates the market’s confidence in Zscaler. His insights touch on the essentials: a revamped marketing strategy and improved sales productivity are not merely transient successes but indicative of a well-managed company poised for further growth. The noteworthy increase in annual contract value from their AI Analytics portfolio showcases how Zscaler adapts to meet evolving market demands, doubling year-over-year—a sign of a company that is investing wisely in the future.
Moreover, serving 14 of the 15 U.S. cabinet agencies positions Zscaler effectively to benefit from governmental pressures for efficiency amid rising cybersecurity threats. The projected $3 billion in annual recurring revenue by the end of fiscal 2025 isn’t just a target; it reflects Zscaler’s strategic foresight in expanding its market reach. For investors eyeing a blend of stability and growth, Zscaler comes across as a fortressed investment against the backdrop of current economic unpredictability.
Costco: Warehouse Resilience Amid Challenges
Shifting gears to retail, Costco Wholesale (COST) holds a steadfast position amidst retail chaos. Though the company faced mixed results in their fiscal 2025 second-quarter report—higher revenues offset by lower earnings—this reflects a larger trend in retail that necessitates a discerning perspective. Analyst Corey Tarlowe from Jefferies notes that despite external pressures such as foreign exchange fluctuations, Costco demonstrated significant adjusted comparable sales growth of 8.3%.
This resilience in sales, especially in non-food categories amidst a backdrop of other retailers floundering, sets Costco apart. Tarlowe’s optimism regarding Costco’s growth potential is further emphasized by the company’s minimal exposure to the current tariff dilemmas. With an extensive import network, approximately one-third of its U.S. sales stem from non-tariff heavy regions, showcasing Costco’s strategic advantage in navigating these storms.
Tarlowe’s recommendation, supported by a raised price target from $1,145 to $1,180, underlines Costco’s long-term potential. The combination of successful membership growth and traffic increases means that the company is likely to weather any economic storms while positioning itself to seize future growth opportunities. Investors inclined towards defensive yet promising positions would find Costco’s large-scale operations an appealing bastion against volatility.
Karman Holdings: Defense Production for the Future
Finally, Karman Holdings (KRMN), a relatively new entrant in the defense and space systems market, is capturing attention from analysts eager to explore emerging growth areas. Analyst Amit Daryanani from Evercore emphasizes Karman’s favorable positioning in a sector that is expected to see sustainable growth driven by, among other trends, increasing defense expenditures and a surge in U.S. orbital launch volumes.
Daryanani’s projection of 18% year-over-year sales growth for fiscal 2025 reflects a robust belief in the company’s growth potential, buoyed by U.S. initiatives focusing on missile defense—a sector witnessing renewed funding and restocking efforts from NATO allies. Such government-led initiatives are poised to provide Karman with a solid foundation for sustained growth.
His bullish price target of $38 is not just a speculative figure; it aligns with Karman’s comprehensive offering across critical national security spaces, ensuring it is well-positioned for broader participation in booming military markets. For investors looking for exposure to innovative sectors within defense, Karman presents a compelling option.
Investors navigating this turbulent landscape must leverage such insights, focusing not just on immediate market fluctuations but rather on resilient stocks that promise growth even in adversity. The combination of cybersecurity, retail stability, and defense innovation paints a picture of strategic investment for those unafraid to look beyond the turmoil.