The U.S. stock market is on the verge of entering correction territory, with a near 10% decline since its mid-February peak. Investors are increasingly wary of the new administration’s policies, including tariffs, federal job cuts, and reductions in large-scale public projects. These changes have sparked fears of stagflation—a dangerous mix of high inflation, weak growth, and rising unemployment.
Certain sectors, especially those reliant on government contracts such as infrastructure and defense, are experiencing heightened volatility. Even the “Magnificent 8” tech stocks that drove last year’s AI-fueled rally have faced heavy selling pressure. Meanwhile, the energy sector has remained under pressure due to expectations of lower oil prices amid a slowing economy. Amidst this turmoil, the key for investors is identifying multibagger stocks that have maintained their momentum despite the recent downturn.
How We Identified the Top Multibagger Stocks
To find the best-performing stocks, we used Finviz to screen companies that delivered at least 200% returns in the past 12 months. We then cross-referenced these stocks with our proprietary hedge fund ownership database for Q4 2024, selecting the top names with the highest hedge fund backing. Our research shows that imitating the top stock picks of elite hedge funds can significantly outperform the market. Since May 2014, our strategy has returned 373.4%, beating its benchmark by 218 percentage points.
Rigetti Computing (RGTI): A Quantum Leap in Stock Performance
One standout name in our research is Rigetti Computing, Inc. (NASDAQ:RGTI), a quantum computing firm that has delivered an impressive 338% stock price return in the past 12 months. With 17 hedge funds holding positions in the stock, RGTI is among the most sought-after quantum computing plays in 2025.
What Makes Rigetti Computing (RGTI) a Top Pick?
1. Strategic Partnerships & Funding:
- Rigetti has formed a strategic collaboration with Quanta Computer Inc., a Fortune 500 company from Taiwan.
- Both firms are investing over $100 million each over five years to accelerate quantum computing developments.
- Quanta will purchase $35 million in RGTI common stock, pending regulatory approval.
2. Breakthrough Quantum Technology:
- In December 2024, Rigetti launched its 84-qubit Ankaa-3 system.
- Achieved a 99.0% median iSWAP gate fidelity and 99.5% fidelity with fSim gates—a major milestone in quantum computing performance.
- Secured sales for its Novera QPU with Montana State University and the UK government.
3. Strong Financial Position & Future Growth Plans:
- Ended Q4 with $217.2 million in cash, enough to fund operations for at least three more years.
- Plans to scale to 100+ qubits by the end of 2025, with an ambitious 2x reduction in error rates from 2024 levels.
- Management remains confident that superconducting qubits are the best path forward due to their fast speeds and scalability.
Palantir Technologies (PLTR): A Resilient AI and Data Analytics Powerhouse
Palantir Technologies Inc. (NYSE:PLTR) has recently been one of the most searched stocks on Zacks.com, reflecting strong investor interest. However, the stock has declined 32.5% over the past month, underperforming both the S&P 500 (-9.6%) and the Technology Services industry (-25.3%). Investors now question where PLTR could be headed next.
Why PLTR Remains a Strong Contender?
1. Earnings Growth and Positive Analyst Revisions:
- Palantir is expected to post earnings of $0.13 per share for the current quarter, a +62.5% year-over-year increase.
- Over the last 30 days, the Zacks Consensus Estimate has increased by +2.1%.
- Full-year earnings are projected at $0.56 per share (+36.6% YoY), with estimates rising +2.1% in the past month.
- For the next fiscal year, earnings are expected to grow another +25.7%, with estimates climbing +2.2% over the past 30 days.
2. Strong Position in AI and Government Contracts:
- Palantir’s AI-driven software solutions are heavily utilized in defense, intelligence, and commercial applications.
- Despite recent volatility, the company remains one of the most prominent data analytics firms working with U.S. agencies.
- As geopolitical tensions rise, demand for AI-powered defense solutions is expected to remain robust.
3. Long-Term Market Potential:
- Palantir continues expanding its presence in AI-driven enterprise software, competing in a rapidly growing multi-billion-dollar market.
- The company’s strategic government contracts and increasing adoption of AI in commercial sectors make it a compelling long-term play.
Why RGTI and PLTR Stand Out in 2025’s Market Environment
Despite a broader market selloff, Rigetti Computing and Palantir Technologies remain high-momentum stocks attracting institutional and retail investors. While many technology and AI stocks have struggled with valuation concerns, these companies demonstrate strong financials, strategic partnerships, and industry leadership.
For investors looking for multibagger opportunities in a volatile market, Rigetti Computing (RGTI) and Palantir Technologies (PLTR) present compelling cases. With hedge fund interest surging and breakthrough advancements in quantum computing and AI-driven analytics, these stocks remain among the top to watch in 2025.
