Is Okta, Inc. (OKTA) the Unstoppable Growth Stock to Invest in Now?

We recently published a list of 11 Unstoppable Growth Stocks to Invest in Now. In this article, we are going to take a look at where Okta, Inc. (NASDAQ:OKTA) stands against other unstoppable growth stocks to invest in now.

BlackRock highlighted that the trade conflict between the US and China continues to cause major economic disruptions. However, the expectations of a supply-driven contraction in the US are very different from a typical business cycle recession. The hard economic rules binding on policy are expected to limit the damage. Furthermore, the AI mega force has been keeping the firm overweight on the US stocks and positive on developed market stocks, despite the expectations of volatility.

Focus Areas Amidst Tariff Worries

BlackRock believes that some of the sectors are more exposed to tariffs as compared to others, with sectoral differences already at play in the earnings releases for Q1 2025. The companies that are at the forefront of the AI mega force continued to keep fueling the US equity strength, while policy uncertainty significantly impacts the broader market. The leading technology companies managed to exceed the Q1 earnings expectations, highlighted the increasing AI-driven demand, and announced plans to raise investments focused on AI.

Such trends strengthen the fact that how AI mega force continues to persist despite the supply-driven disruptions. As a result, BlackRock has remained positive on developed market (DM) stocks, primarily the US. On the other hand, automakers have been tagged by the firm as the ones most exposed to key supply inputs from China. Furthermore, some of the automakers have highlighted the impact of tariffs in their respective expectations for full-year earnings.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Franklin Templeton believes that it is of utmost importance to remember that tough economic and/or market phases are finite. Investors who tend to see most of the profits during the recovery are the ones staying the course during the stormy weather. The investment firm continues to see increased potential for a sustained period of small-cap leadership. Considering its metric of choice to gauge index valuations, EV/EBIT, the Russell 2000 is far more attractively valued as compared to the Russell 1000, says Franklin Templeton.

As per the investment manager, the valuation situation becomes even more attractive when consensus earnings growth is included. Notably, growth stocks are the ones capable of increasing their earnings faster as compared to an average business in the respective industry or broader market. At 2024 end, the Russell 2000 was expected to see stronger earnings growth in 2025 as compared to the Russell 1000, based on EPS, added the investment firm.

Our Methodology

To list the 11 Unstoppable Growth Stocks to Invest in Now, we used a screener to shortlist the companies catering to the growth sectors that have 3-year revenue growth of at least ~25%, and that have appreciated significantly on a YTD basis. We also mentioned hedge fund sentiments around each stock, as of Q4 2024. Finally, the stocks were arranged in ascending order of their hedge fund sentiment.

Note: The data was recorded on May 9.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Okta, Inc. (NASDAQ:OKTA)

Number of Hedge Fund Holders: 72

3-Year Revenue Growth: ~26.1%

% Increase on a YTD Basis: ~51.5%

Okta, Inc. (NASDAQ:OKTA) operates as an identity partner in the US and internationally. Analyst Shrenik Kothari of Robert W. Baird maintained a “Buy” rating on the company’s stock, retaining the price objective of $130.00. As per the analyst, Okta, Inc. (NASDAQ:OKTA)’s financial results exhibited healthy growth and improving profitability, cementing its position in the mid-cap segment. The company’s valuation is attractive, and Kothari believes that its multiples remain lower than the median for high-growth SaaS companies, highlighting the potential for expansion.

In FY 2025, the company’s total revenue came in at $2.610 billion, reflecting an increase of 15% YoY. The subscription revenue sat at $2.556 billion, a rise of 16% YoY. GAAP net income amounted to $28 million as compared to a GAAP net loss of $355 million for FY 2024. Amidst a rapidly evolving IT and security landscape, companies are preferring Okta, Inc. (NASDAQ:OKTA) as their identity partner for its ability to deliver the broadest array of modern identity security with the flexibility to address the demands. Elsewhere, a report from Loop Capital initiated coverage on the company’s shares with a “Buy” rating and a price objective of $140 per share. The analyst highlighted expectations of higher demand for identity security as GenAI systems are increasing in deployment. White Brook Capital Partners, an investment management firm, published its Q4 2024 investor letter. Here is what the fund said:

“Okta, Inc. (NASDAQ:OKTA) was basically unchanged from where we bought it in 2024, although its had a good start to 2025. Okta’s products are used by customers and consumers to manage and secure identities. I believe we acquired shares at an attractive price and look forward to publishing a write up early this year.”

Overall, OKTA ranks 2nd on our list of unstoppable growth stocks to invest in now. While we acknowledge the potential of OKTA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than OKTA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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