Taiwan Semiconductor Manufacturing Company (TSMC)

TSMC, a global leader in semiconductor manufacturing, has been added to Wedbush’s Best Ideas List due to its robust growth in AI demand and process leadership. The company posted Q4 revenues of NT\$868.5 billion, marking a 39% YoY growth, driven by its advanced 3nm and 5nm technologies. Management forecasts a ~20% YoY revenue growth in USD for 2025, significantly outpacing the broader foundry industry’s growth of ~10%.

AI-related revenues are expected to double by 2025, contributing to a remarkable ~45% 5-year CAGR in AI sales. Advanced nodes remain the backbone of TSMC’s success, with N2 production commencing in the second half of 2025 and N2P ramping up in the second half of 2026. Gross margins of 59% in Q4 exceeded estimates, and management projects high-50% levels for 2025 despite the challenges posed by overseas fab ramps and rising costs. The company increased its 2025 capex guidance to \$38-42 billion, emphasizing its commitment to capacity and technology leadership.

Wedbush has assigned a 12-month target price of NT\$1,300, up from the current price of NT\$1,105. With projected 2025 EPS of NT\$60.04 and revenues of NT\$3,697.3 billion, TSMC is well-positioned for sustained growth.

Netflix (NFLX)

Netflix continues to dominate the streaming industry, with its ad-supported tier being a major growth driver. Launched in 2022, the ad tier has converted over 30 million accounts within six months. Strategic investments in live events, targeted advertising solutions, and diverse global content are expected to sustain Netflix’s expansion. The company is projected to achieve a 28% operating margin in 2025, with plans to reinvest in live events, games, and in-house advertising technology.

Enhanced CPMs from live events and a broader advertising mix are expected to double ad revenue by 2025. Netflix’s 2025 content slate, reflecting recovery from the 2023 SAG-AFTRA strikes, is anticipated to fuel further subscriber growth. With its ability to invest in premium content backed by strong free cash flow, Netflix solidifies its leadership in the streaming space. Wedbush has reaffirmed an “Outperform” rating with a 12-month price target of \$950, up from the current price of \$828.40.

Papa John’s International, Inc. (PZZA)

Papa John’s reported mixed Q4 results, with North American same-store sales (SSS) declining by 4.0%, slightly below consensus, while international SSS grew by 2.0%, exceeding expectations. The company reported strong unit growth, adding 60 net new locations in North America and 62 internationally. Despite challenges with Q4 margins due to lower-than-expected company-owned sales, international trends, particularly in Latin America and the Middle East, showed positive momentum.

The company remains focused on improving digital engagement, loyalty programs, and marketing strategies. Management is optimistic about long-term growth and has set a 12-month price target of \$60, up from the current price of \$37.72, with plans for sustained expansion through enhanced customer engagement and targeted growth initiatives.

Verint Systems (VRNT)

Verint Systems specializes in automating customer experience (CX) workflows, addressing the growing demand for CX automation while reducing operational costs. The company’s open platform features over 50 AI-powered bots designed for micro-workflows, driving ROI without disrupting existing operations. Verint reaffirmed its FY25 guidance, projecting FY26 ARR of \$760 million, representing 8% YoY growth, with double-digit ARR growth expected beyond FY26.

With 80% of its revenue derived from subscriptions and increasing SaaS adoption, Verint anticipates strong cash flow growth and operational efficiencies. Positioned within a \$2 trillion CX market, Verint aims to capitalize on the AI revolution by integrating AI seamlessly into CX processes. Wedbush has reaffirmed an “Outperform” rating, with a 12-month price target of \$38, up from the current price of \$25.08.

D.R. Horton (DHI)

D.R. Horton faces challenges ahead of its F1Q25 earnings release. Wedbush has assigned a “Neutral” rating with a 12-month price target of \$180, based on a 1.9x multiple of its FY25 estimated tangible book value. The company expects F1Q25 EPS of \$2.24, below consensus estimates of \$2.44, with a 22.5% gross margin, also below the consensus of 23.9%. Revenue is forecasted to decline 8% YoY to \$7.1 billion, with a 3% increase in orders.

Concerns about volatile mortgage rates and gross margins remain a focal point. D.R. Horton is adopting a cautious approach to land underwriting, reflecting a shift from aggressive growth strategies. This conservative stance, coupled with mortgage rate volatility, could slow the company’s expansion pace.

UMH Properties, Inc. (UMH)

UMH Properties continues to experience growth in its low-income manufactured housing (MH) business. The company reported a 4% increase in gross home sales revenue to \$32.6 million and an 88% occupancy rate for Q4 2024. UMH’s rental home model, combined with a 5% annual rent growth track record, supports projections for revenue exceeding \$300 million in the coming years.

UMH is uniquely positioned among REITs due to its focus on affordable housing. Potential changes in government policy, including at the CFPB and HUD, could allow UMH to transition some rented homes into sales, creating new growth opportunities. The potential IPO of Yes! Communities could further elevate the profile of the MH sector. Wedbush has assigned a “Neutral” rating with a 12-month price target of \$20, up from the current price of \$17.59.

Pet Retail: Chewy (CHWY) and Petco (WOOF)

Pet retail is projected to grow by ~4% in 2025, slightly accelerating from 2024’s 3% growth rate. Chewy is expected to benefit from its high-margin sponsored ads and CRM initiatives, while Petco focuses on differentiating through services and operational improvements. Though both companies face competition from larger retailers and online platforms, Chewy and Petco are positioned for continued growth in 2025, supported by operational efficiencies and solid consumer trends.

Chewy’s focus on premium food and health spending remains a long-term growth driver, while Petco is expected to maintain profitability through strategic investments. Both companies are poised to benefit from modest category inflation and improving consumer spending.