Additionally, expectations for M&A activity are rising, driven by renewed investor enthusiasm. Mitch Berlin, vice chairman of strategy and transactions at EY Americas, joined CNBC’s “The Exchange” on November 22 to discuss what he sees for M&A activity in 2025. He noted that while there is general optimism, it is important to differentiate between private equity and corporate growth. Berlin expects a 16% increase in private equity activity and an 8% increase in corporate transactions, largely due to pent-up demand and significant capital reserves for investments. This growth is also influenced by maturing assets that private equity firms are eager to exploit.

Looking ahead, Berlin speculated on possible headline figures for early 2025, predicting larger deals especially in the technology sector, driven by advances in AI. He also highlighted the continued importance of oil and gas in mergers and acquisitions, albeit from a value rather than a volume perspective. Life sciences companies are expected to use their liquid balance sheets to make strategic acquisitions aimed at replenishing their research and development pipelines. Additionally, he expressed optimism that regulatory hurdles from the Federal Trade Commission (FTC) and the Department of Justice (DOJ) would become fewer obstacles, allowing for smoother deal approval.

Berlin addressed concerns about interest rates and assured that the current environment will not hinder doing business. He expects interest rates to fall further in 2025, which could lead to more activity. Many businesses are financed with cash, and personal loans remain an important source of financing. Three quarters of the deals this year will be financed by such loans.

The findings from Berlin reflect a robust outlook for both private equity and corporate M&A activity as companies adapt to changing market conditions. As companies adapt to the changing market, investors should pay attention to new opportunities. With a strong IPO market expected in 2025, this context forms the basis for our upcoming list of the 10 best emerging stocks to buy according to analysts.

methodology

We used the Finviz stock screener to create an initial list of 30 stocks that went public in the last 5 years. We then selected the 10 stocks that analysts say have high upside potential and are also the most popular among elite hedge funds. Stocks are ranked in ascending order of analyst upside potential.

Why do we care about the stocks hedge funds invest in? The reason is simple: Our research shows that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, outperforming its benchmark by 150 percentage points (SFurther details can be found here).

A technician assembles an electric aircraft and presents the company’s manufacturing capabilities.

Average Upside Potential as of November 26: 38.79%

Number of hedge fund owners: 24

Archer Aviation Inc. (NYSE:ACHR) is an urban air mobility company focused on developing electric vertical takeoff and landing (eVTOL) aircraft designed for efficient and sustainable air transportation in urban environments. The company is working on manufacturing and certifying its aircraft and plans to launch air taxi services in several cities by 2026.

The Federal Aviation Administration (FAA) has made significant progress in regulating electric air taxis, paving the way for their commercial introduction in the United States by 2025. This development represents a major step forward for urban air mobility. Archer Aviation Inc. (NYSE: ACHR) is at the forefront of this revolution and is actively working with the FAA to certify its Midnight aircraft, an advanced eVTOL aircraft. The company has completed the initial phases of certification and is now focused on meeting the FAA’s stringent safety standards. Additionally, the company is working with international regulators to expand its global reach.

A strategic partnership with Falcon Aviation and Etihad will facilitate the recruitment and training of pilots, the establishment of maintenance protocols and the organization of the first regional pilot flight exhibitions, expected to launch in 2025. In addition, the company has reached an agreement with Japan Airlines and Sumitomo. The company’s joint venture, Soracle, aims to introduce eVTOL technology to the Japanese market. The goal of this collaboration is to bring midnight planes to crowded cities like Tokyo, offering a more efficient and sustainable means of transportation.

With strong industry partnerships and a relentless commitment to innovation, the future of electric air taxis seems bright. This makes Archer Aviation Inc. (NYSE:ACHR) an attractive investment opportunity.

Total ACHR takes 10th place on our list of the best emerging stocks to buy according to hedge funds. While we recognize ACHR’s potential as an investment, we believe AI stocks show promise when it comes to generating high returns in a shorter period of time. If you’re looking for an AI stock that has more promise than ACHR but trades at less than 5x earnings, check out our report on it cheapest AI stock.

READ MORE: The 8 Best Wide Moat Stocks to Buy Now And The 30 most important AI stocks according to BlackRock.

Disclosure: None. This article was originally published on Insider Monkey.