3 Small-to-Mid-cap Stocks to Buy and Hold for 2025

Group 1: Market Outlook - 2025 is expected to be a favorable year for stocks, particularly for smaller companies like Braze, LightPath Technologies, and Guidewire, driven by anticipated interest rate reductions and a shift in AI focus from infrastructure to application [1] - The expansion of AI-driven services is projected to surpass the AI infrastructure boom, creating significant investment opportunities [1] Group 2: LightPath Technologies (LPTH) - LightPath Technologies is positioned to benefit from AI's impact on the IoT, producing optical sensors and devices essential for generating actionable data [2] - Revenue growth for LightPath is forecasted to accelerate to nearly 20% in 2025, following sluggish growth in 2024 [3] - Analysts have a bullish outlook on LPTH, with a consensus price target suggesting a potential upside of 150% [4] Group 3: Braze (BRZE) - Braze operates a customer engagement platform, with growth rates in the high 20% range expected to be sustained into 2025 [7] - The company has achieved a 114% net retention rate, indicating existing clients are generating 15% more revenue compared to the previous year [8] - Analysts maintain a Moderate Buy rating for Braze, with price targets implying a potential upside of 40% to over 70% [9] Group 4: Guidewire Software (GWRE) - Guidewire Software provides platforms for the insurance industry, utilizing AI to enhance operational efficiency [11] - Revenue growth for Guidewire is anticipated to accelerate, with margins expected to widen in 2025 [11] - Analysts have noted a 75% increase in the consensus target for GWRE over the past 12 months, indicating strong market support [12]