QXO (QXO) Climbs as Investors Buy into $50-Billion Revenue Potential

We recently published 10 Power Stocks Crushing Wall Street — 7 at All-Time Highs. QXO, Inc. (NYSE:QXO) is one of the best performers on Tuesday.

QXO Inc. bounced back by 4.97 percent on Tuesday to close at $21.13 apiece as investors cheered an investment firm’s bullish rating and higher price target on expectations that it could grow into a $50-billion revenue company.

In a market note, Morgan Stanley assigned an “overweight” rating and a price target of $35 on shares of QXO, Inc. (NYSE:QXO), saying that the latter, as an emerging building products distributor, could bolster its way beyond $50 billion in terms of revenues amid rosy prospects for the US industrial distribution sector, thanks to a highly fragmented industry where no player has a dominant market share.

According to Morgan Stanley, the industrial distribution sector is a highly fragmented industry where no player currently holds a significant market share. With many small players incapable of investing in technology-driven solutions, this could spark opportunities for larger players such as QXO, Inc. (NYSE:QXO) to scale up and become more efficient.

“Investments in efficiency not only lower the distributor’s cost to serve but these solutions also improve customer profitability which then pushes more wallet share back to said distributor—this is the flywheel,” it said.

In other developments, QXO, Inc. (NYSE:QXO) could also benefit from a widely expected interest rate cut by making loans for home-buying much cheaper.

While we acknowledge the potential of QXO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.