These three stocks have game-changing megatrends behind them, which aren’t always immediately apparent when first looking at the stocks. Here’s the hidden growth potential in machine-vision company Cognex Corporation (NASDAQ: CGNX), positioning and workflow-technology company Trimble (NASDAQ: TRMB), and Delta Air Lines (NYSE: DAL), and why all three are great stocks to buy for 2025.
It’s not easy when customers in your three major end markets are all under pressure, but that happened to Cognex over the last couple of years. The company’s machine-vision technology helps manufacturing companies control and monitor assembly line production (key end markets include automotives and consumer electronics), and logistics companies (e-fulfillment) improve throughput efficiency in their centers.
Unfortunately, relatively high interest rates have curtailed automotive sales, causing automakers to scale back production plans and capital investment. Similarly, consumer electronics companies have pared back investment in developing new products and assembly lines. Meanwhile, logistics companies have been affected by a combination of slowing spending and a retraction from previous years’ boom in investment caused by the pandemic.
It’s added up to a miserable period of sales for the company.
But here’s the thing: History suggests these cyclical issues will all correct in time. Automakers and consumer electronics companies can’t forestall investment in new vehicles/products, or they will fall behind their competition. Similarly, no one disputes the long-term trend of e-commerce spending: E-fulfillment warehouse spending will grow again when companies need more capacity.
Furthermore, machine-vision secular-growth drivers (increasing adoption of automation to cut costs and improve productivity, and growth in artificial intelligence and Internet of Things (IoT) technologies that will amplify the value of data captured by machine vision) will only strengthen in the coming years. As such, this will likely prove a trough year for an exciting growth stock.
The company’s roots are in precise positioning hardware, but its future lies in integrating software into that technology to become an ever more prominent part of its customers’ workflow. This can easily be seen in the infrastructure and construction industries where Trimble’s solutions help project managers, engineers, architects, and building owners design and precisely monitor and manage their projects. This results in reduced waste, significant construction and procurement savings, and enhanced cost estimation — all common challenges in the infrastructure industry.
