Amentum (AMTM) Rated Buy on Strong Government Demand

Amentum Holdings Inc. (NYSE:AMTM) ranks among the recent spin-off companies that hedge funds are piling into. On March 12, Truist Securities reiterated its Buy rating for Amentum Holdings Inc. (NYSE:AMTM), with a $42 price target. The firm underlined the company’s long-term growth direction, which is supported by its main revenue streams.

Amentum’s $4 billion growth portfolio, separated into three segments: new nuclear, critical digital infrastructure, and space systems and technologies, accounts for roughly 30% of the company’s revenue.

Truist stated that the company looks to be well protected from possible artificial intelligence risks due to its lack of IT services and emphasis on mission-critical tasks. The firm suggested that investors should largely ignore potential near-term dangers such as the private equity backlog and the Iran war.

In addition, S&P Global Ratings raised Amentum Holdings Inc. (NYSE:AMTM) to ‘BB’ from ‘BB-‘ due to solid operating performance and significant debt repayments, with the forecast remaining steady. Amentum Holdings Inc. (NYSE:AMTM) proactively repaid $750 million of term loan debt in fiscal 2025, thereby accelerating its deleveraging efforts.

Amentum Holdings Inc. (NYSE:AMTM) provides mission-critical, technology-driven services to government and commercial markets.

While we acknowledge the risk and potential of AMTM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMTM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

Disclosure: None. Follow Insider Monkey on Google News.