We recently published a list of 10 Best Low Priced Stocks to Invest in For the Long Term. In this article, we are going to take a look at where Marqeta, Inc. (NASDAQ:MQ) stands against other best low priced stocks to invest in for the long term.
As per AllianceBernstein, tariffs and trade wars have impacted investors of late. While some asset classes were spared, the US small-cap stocks have been hard hit. Over the past 6 months, the Russell 2000 Index has witnessed a decline of over ~10%. That being said, the investment firm opines that equity markets continue to show signs of broadening, which can work in favor of small-caps over time. The small-caps have underperformed in part since they are perceived as being more economically sensitive as compared to their larger-company counterparts.
What Lies Ahead?
The current circumstances are unique, says AllianceBernstein. Trade tensions can have a more significant impact on the broader US economy, but robust companies can still see earnings growth. The small-cap investors can also take a sigh of relief from the broadening market. The investment firm highlighted that, over the previous 30 years, small-cap performance remained particularly robust over the last 2 cycles of unwinding large-cap growth concentration, i.e., when markets start to broaden.
The 10 largest stocks accounted for over half the market capitalization of the Russell 1000 Growth Index by 2024 end, exhibiting a record high in the market concentration. Despite the trend reflecting the signs of unwinding, the concentration remains much higher as compared to the previous peaks. As per AllianceBernstein, small-caps are well-placed to benefit from the declining market concentration.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Amidst Uncertainties, Focus on Quality Companies
AllianceBernstein opines that, while broadening markets have resulted in improved small-cap returns, timing the turn can be a difficult task. Typically, economic recoveries have fueled such transitions. In a bid to capitalize on the broadening market with an uncertain beginning, the firm believes that the best approach is to emphasize higher-quality companies. High-quality stocks tend to see reduced drawdowns when there is a contraction in the economy, and more upside when it sees expansion.
The firm also opines that small-cap stocks trade at extremely depressed valuations as compared to the larger companies, based on P/E ratios. Notably, the geopolitical tensions and macroeconomic worries have impacted the small companies. Without considering the company fundamentals, the investors have discounted potential hazards for such companies. Investing in firms exhibiting resilient business models can benefit along the road to recovery.
Our Methodology
To list the 10 Best Low Priced Stocks to Invest in For the Long Term, we sifted through financial media reports to make a list of 40 potential long term stocks. We focused on companies with a market cap of at least $2 billion with a share price below $10. We further refined our list to include stocks that had bullish analyst sentiment. We also mentioned the hedge fund sentiment around each stock, as of Q4 2024. Finally, the stocks were arranged in ascending order of their hedge fund sentiment.
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).
A financial services team at work reviewing customer data on their digital bank.
Marqeta, Inc. (NASDAQ:MQ)
Stock Price as of May 6: $3.90
Market cap as of May 6: $2.2 billion
Number of Hedge Fund Holders: 37
Marqeta, Inc. (NASDAQ:MQ) is engaged in developing and publishing a commerce payments platform. It saw total processing volume (TPV) of $84 billion, demonstrating a YoY growth of 27%. The company continues to expand its customer portfolio throughout a diverse set of use cases and geographies, demonstrating payments industry leadership. In Q1 2025, Marqeta, Inc. (NASDAQ:MQ)’s gross profit improved by 17% YoY primarily because of its TPV growth. The company continues to see strong growth in Europe, with TPV growth remaining more than 100% in Q1 2025.
Adding program management remains a critical lever for enhancing its offerings to offer a more holistic solution for customers operating in Europe. Furthermore, the acquisition of TransactPay remains on track to close by the end of Q3 2025, and Marqeta, Inc. (NASDAQ:MQ) expects it to be a significant step in delivering its program management offering, which remains comparable to other geographies such as the US and Canada. The transaction continues to drive strong customer interest since it exhibits more control of the entire card offering and seamless geographic expansion. Furthermore, the second migration was Bitpanda, a European crypto platform. Marqeta, Inc. (NASDAQ:MQ) has been powering cards that enable consumers to spend cryptocurrency through a card for several years.
Overall, MQ ranks 5th on our list of best low priced stocks to invest in for the long term. While we acknowledge the potential of MQ 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 MQ 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.
