The Best Penny Stocks to Invest in According to Media: NIO Inc.’s Performance
Small-Cap Stocks Outlook for 2025
As we begin a new year, investors are looking for opportunities to grow their portfolios. One of the most promising areas of investment is small-cap stocks. In this article, we will take a closer look at where NIO Inc. (NYSE:NIO) stands among the best penny stocks to buy according to media outlets.
A Promising Outlook for Small-Cap Stocks
In December 2024, Global Advisors’ managing partner, Tom Lee, shared his thoughts on the potential of small and mid-cap stocks in 2025. According to Lee, 2025 is expected to be a good year for small and mid-cap stocks. The interest rate cuts and the incoming administration will lead companies to feel more confident about mergers and expansions.
Lee also pointed out that small-cap stocks are trading at a discount with a medium P/E multiple of 10. In an interview with CNBC, Lee said: "I think small caps could in the next couple of years outperform by more than 100%."
New Street Advisors CEO Delano Saporu has similar thoughts and believes that small-cap stocks are well-positioned to outperform in 2025. The economy has shown resilience in 2024, especially the recovery in the last quarter has signaled a promising outlook for businesses.
Donald Trump’s win has already driven significant gains in small-cap stocks amid the growing enthusiasm around the potential easing of regulations on businesses. Small-cap stocks are conventionally focused on the domestic market, with less exposure to international trade compared to large-cap counterparts.
Therefore, Trump’s tariff policies will not have a major impact on small-cap stocks compared to large-cap stocks.
The US Stock Market Outlook for 2025
Heading into 2025, the US stock market is expected to deliver another year of impressive gains. The S&P 500 index surged more than 25% in 2024, while the tech-heavy Nasdaq 100 jumped up to 28%. The Russell 2000 index, which covers small-cap companies, soared more than 15% over the last year.
Torsten Slok, economist at Apollo Global Management (APO), released his 2025 economic outlook for the US. According to Slok, the US economy will deliver strong results with no signs of major slowing in 2025.
Slok added that interest rates will likely stay ‘higher for longer’ despite the Fed’s current interest rate-cutting cycle. The US economy is expected to register GDP growth of 2.2% in 2025, signaling a modest growth, driven by less restrictive monetary policy, resilient consumer spending, and a steadying labor market.
Why NIO Inc. (NYSE:NIO) Is Among the Best Penny Stocks To Invest In According to Media
NIO Inc. (NYSE:NIO) is one of the leading Chinese EV makers. The company specializes in premium smart EVs and is known for its battery-swapping technology and Battery-as-a-service (BaaS) model.
The company’s well-known EV models sold in the market include ES8, ES6, EC6, and ET7. NIO Inc.’s financial performance is improving, with a vehicle margin of 13.1% in Q3 2024, up from 11% in Q3 2023.
During the third quarter, NIO achieved a quarterly record with 61,855 vehicle deliveries, marking an 11.6% growth year-over-year. The NIO brand alone accounted for 61,023 deliveries, maintaining its battery electric vehicle market share of 48%.
NIO recently launched its mass-market brand ONVO, which has begun selling vehicles and targets the mainstream family market.
A Promising Future Ahead
NIO Inc.’s improved financial outcomes and focus on profitability make it a promising EV stock. To learn more about small-cap EV stocks, you can visit our article on 11 Small-Cap EV Stocks to Invest In.
Overall, NIO ranks 7th on our list of Best Penny Stocks To Invest In According to Media. While we acknowledge the potential of NIO to grow, our conviction lies in the belief that 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 NIO but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Conclusion
In conclusion, small-cap stocks offer a promising outlook for investors in 2025. With interest rate cuts and an incoming administration leading to increased confidence in mergers and expansions, small-cap stocks are expected to perform well.
NIO Inc. (NYSE:NIO) is among the best penny stocks to invest in according to media outlets, with its improved financial outcomes and focus on profitability making it a promising EV stock. However, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame.
Recommended Reading
- 8 Best Wide Moat Stocks to Buy Now
- 30 Most Important AI Stocks According to BlackRock
Disclosure
None. This article is originally published at Insider Monkey.
