Is Pagaya Technologies (PGY) 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 Pagaya Technologies Ltd. (NASDAQ:PGY) 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).

Pagaya Technologies Ltd. (NASDAQ:PGY)

Number of Hedge Fund Holders: 24

3-Year Revenue Growth: ~25%

% Increase on a YTD Basis: ~51.4%

Pagaya Technologies Ltd. (NASDAQ:PGY) is a financial technology company focused on reshaping the lending marketplace via machine learning, big data analytics, and sophisticated AI-driven credit and analysis technology. Mark Palmer from Benchmark Co. reiterated a “Buy” rating on the company’s stock with a price objective of $25.00. The analyst’s rating comes off the back of factors highlighting Pagaya Technologies Ltd. (NASDAQ:PGY)’s healthy financial performance and strategic achievements. The company entered a new era in 2025, an era of profitability. This milestone, along with a strong YoY revenue increase and lower operating expenses, cements the company’s ability to enhance its profitability and operational consistency, says the analyst.

In FQ1 2025, Pagaya Technologies Ltd. (NASDAQ:PGY)’s GAAP net income attributable to its shareholders came in at $8 million, reflecting a rise of $29 million YoY. This strong growth stemmed mainly from revenue growth and operational efficiencies. The company’s total revenue and other income amounted to $290 million, reflecting 18% growth YoY, thanks to 19% growth in revenue from fees. Pagaya Technologies Ltd. (NASDAQ:PGY)’s adjusted EBITDA amounted to $80 million, reflecting a rise of $40 million as compared to the prior year period, thanks to the growth in FRLPC (revenue from fees less production costs) and operating leverage as the business scales.

Overall, PGY ranks 8th on our list of unstoppable growth stocks to invest in now. While we acknowledge the potential of PGY 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 PGY 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.