As major Wall Street firms are bullish on the overall market, these two U.S. stocks are expected to lead the rally

Just last week, the Nasdaq, S&P 500 Index, and Dow Jones Industrial Average all climbed to record highs, marking the latest in a long string of historical highs set this year. Amid the ongoing rally, many stocks are at or near historical highs, leading some investors to question whether there is still room for upward movement in the future.

According to major Wall Street firms, these concerns are unfounded, and Wall Street remains very bullish. As the year comes to a close, forecasts for the year-end target for 2025 continue to rise. Analysts from major Wall Street firms have essentially released their annual predictions, with an average forecast indicating that the S&P 500 Index will rise by about 10%, which aligns with historical averages. After two years of gains above historical averages in the U.S. stock market, most strategists' current general expectations align with historical averages.

Analysts' predictions for the S&P 500 Index range from 6,400 to 7,007 points. This implies an increase of between 5% and 15% from last Friday's closing level of 6,090 points. This range is narrower than last year's target range, with many analysts' expected returns between 8% and 10%.

Among them, Goldman Sachs analysts predict that the S&P 500 Index will reach 6,500 points by December 2025. Bank of America is even more bullish, issuing a year-end target price of 6,666 points for 2025. Just last week, Wells Fargo released the most optimistic forecast to date, predicting that the benchmark index will reach 7,007 points next year, representing a potential increase of nearly 15%.

In this generally bullish environment, some Wall Street analysts point out that there are two stocks in the Nasdaq with additional upside potential of up to 115%.

Sirius XM Holdings (SIRI.US)

The first stock on the Nasdaq with significant upside potential is Sirius XM Holdings. The company dominates satellite broadcasting services in North America, boasting 34 million paying subscribers. When including the ad-supported Pandora music streaming service, its customer base jumps to 150 million, giving it a broad audience.

However, recent economic slowdowns and a complicated merger have taken a toll on the company. Decades of high inflation have forced cash-strapped consumers to make tough choices with their limited disposable income. Understandably, some users have canceled their SiriusXM subscriptions.

There is also a fundamental misunderstanding regarding the company's recent merger, reverse stock split, and the resulting complex accounting transactions, all of which have impacted the company's performance. These factors combined have led to a 51% decline in the stock so far this year, but the situation is not as dire as it may seem at first glance.

In the third quarter of this year, Sirius's revenue fell 4% year-over-year to $2.17 billion, while it reported a loss of $8.74 per share, compared to a diluted earnings per share of $0.82 in the same period last year. The company recorded a one-time non-cash impairment charge of $3.36 billion related to the goodwill from its acquisition of Liberty Sirius XM. Without this one-time charge, Sirius's earnings per share would be approximately $1.17, representing a 43% increase At the same time, due to a decrease in churn rate, the number of paying users increased by 14,000. As automakers shifted to short-term or non-paying plans, paying promotional subscribers decreased by 114,000, further dragging down performance.

Some on Wall Street believe the sell-off has gone too far. Benchmark analyst Matthew Harrigan is one of them. He maintains a "Buy" rating on Sirius XM with a target price of $43. This implies a 53% upside potential compared to the latest closing price. The analyst pointed out that investors are out of sync with the recent merger. He also believes that the management's "strategic initiatives" will take center stage.

Additionally, the lower stock price presents an enticing opportunity for savvy investors, including Warren Buffett, who has been buying the stock in large quantities. Analysts noted that Sirius XM's current price-to-earnings ratio is about 8 times, and the current stock price hardly reflects future growth opportunities, which is where its potential lies; given the steady improvement in economic conditions, user churn will continue to slow, and user growth will gradually recover, which will be the spark needed to drive Sirius XM's stock price higher.

Symbotic (SYM.US)

A bonus industry arising from the rise of online retail is warehouse automation. Symbotic has created artificial intelligence (AI) solutions to automatically handle individual boxes and full pallets to utilize every inch of available warehouse space. Symbotic has developed advanced algorithms that control a large number of intelligent robots that work together to store pallets, load and unload trucks, isolate, and handle individual cartons. This allows the company to compress more inventory into a smaller space, saving costs for customers.

By improving efficiency, reducing labor costs, and cutting operational and delivery expenses, Symbotic's systems can recoup costs in a short period. The company estimates that each "module" can cover several times its cost over its lifetime, saving the company tens of millions or even hundreds of millions of dollars.

As a result, the company's performance has also reflected this. In the fourth quarter of fiscal year 2024 ending September 28, Symbotic's revenue grew by 47% year-over-year to $577 million, with earnings per share of $0.05, reversing the severe losses from the same period last year. After announcing the restatement of previous quarterly financial reports for 2024, management pointed out that these were due to seasonal differences and "had no impact on the full-year performance for 2024." Last Thursday, Symbotic submitted its annual report with no additional changes, eliminating the last threat to the stock.

After the company announced its quarterly results, Cantor Fitzgerald analyst Derek Soderberg reiterated his "Overweight (Buy)" rating on the stock with a target price of $60, implying a potential upside of 114% compared to the latest closing price. He expressed this optimistic view after questioning the company's management about Symbotic's recent international expansion agreement with Walmex and the status of its warehousing-as-a-service joint venture Like many early high-growth stocks, Symbotic shares also carry some additional risks, so any positions should be sized accordingly. On the positive side, after the recent sell-off, Symbotic's price-to-sales ratio is 1.5 times. Analysts point out that this is an attractive price for a leader in an emerging industry powered by artificial intelligence