Spotlight on 5 companies in a volatile market

In a market climate dominated by continuous change, uncertainty, trade tensions, and geopolitical headwinds, behavioral finance should aid well for smart investing. 

In today’s heightened volatility, retail investors might be carried away by emotions, and this is when smart investing is imperative. As predicted in the initial months of this year, 2025 would be a year of volatility which however created a window of opportunities for long-term investors which seek long-term value creation, contrary to rushed and panicked investors which tend to make simple investment mistakes. 

Market overview

Despite market turbulence in the first half of 2025, since Liberation Day markets have rallied strongly, backed by more visibility in terms of the tariff saga.  

Fueled by relentless enthusiasm, AI trade remained the prime focus. This was confirmed by quarter 2 earnings season and more recently in quarter 3 results, showing that hyperscalers remain the key drivers for this trade through massive investments within space. U.S. markets have regained their luster, while emerging markets have also advanced, supported by a softer U.S. dollar. Technology and communication sectors, now virtually synonymous with the “Magnificent Seven”, have spearheaded this surge, leaving traditional value-oriented sectors trailing behind. 

Market dynamics have changed drastically in contrast to the more fundamental traditional approach. The hypersensitive markets today led by the retail segment do create overshoots, ultimately creating selective opportunities. 

Such an environment creates attractive entry points for investors. Nonetheless, fundamental investors are genuinely debating the high valuations and the increasingly narrow market breath, and thus risks remain. While parallels are often drawn to the dot-com era, today’s backdrop is notably different: despite some echoes of past excesses such as vendor-financing dynamics, corporate profitability and cash-generation capacity now operate on an entirely higher level.  

While uncertainty is real, we are entering into a benevolent favorable seasonality period. Statistically, the period from mid-October to the end of the year is traditionally one of the most favorable for equities, with a frequency of gains significantly above average. This tendency is better known as the “Santa Claus rally”.  

How our Spring 2025 Top Picks performed

Last May, we did an analysis of 5 appealing companies thriving amid market volatility.  

Between May and October 2025 global equity markets delivered a notably strong performance with the MSCI All-World Country Index (Net Total Return) advancing by 19.8%. This achievement was particularly impressive given the uninterrupted monthly gains recorded throughout the period. Here’s how these 5 equities performed between May and October. 

Our top pick, Alphabet Inc. initially lagged behind its Magnificent 7 peers, as investor sentiment was dampened by regulatory concerns surrounding its dominant position in internet search. Once the legal outcome turned out to be more favorable than anticipated, the stock rallied sharply. Supported by another exceptional set of third-quarter results, the stock ultimately delivered a remarkable total return of 74.8%, decisively outperforming the broader market.  

The second pick, Alibaba Group Holdings, appreciated in tandem with Chinese equities as investors positioned the Chinese economy as a key beneficiary of progress in US – China trade negotiations. Additionally, the outstanding advances of Alibaba Cloud’s proprietary LLM and multimodal AI suite, Qwen, reinforced the company’s status as a formidable contender in the global AI landscape. The stock recorded an impressive 43.1% total return over the review period.  

While European equities generally underperformed their U.S. counterparts, our selections in the region lagged the benchmark. Adyen, our first European holding, reported top- and bottom-line growth broadly in line with expectations, but disappointed investors with its forward guidance for the remainder of the year. This triggered a market overreaction on the downside, resulting in a modest 5.0% total return for the period. However, in their latest quarter 3 numbers and in the very recent investors’ day, they have given a more benevolent outlook which did push shares notably up by c.8%.  Our second European position, Deutsche Telekom, continued to deliver solid operational results, particularly through its expanding U.S. business, T-Mobile, but in a market environment unfavorable to value-oriented sector, the stock declined by 14.9%. 

Finally, our tactical position in Fiserv proved to be a clear disappointment. The company revised down its long-term growth outlook for its Clover platform and cut its full-year 2025 guidance. In a highly selective market where any reduction in forward guidance is harshly penalized, the stock suffered a markable decline during the period.  

Highlight on 5 thriving companies

Despite turbulent times, some companies are leveraging emerging opportunities to thrive, making them potentially compelling investment options to put on your watchlist. This article puts the spotlight on 5 such companies, derived through the below structured 3-step analysis: 

1. Sectoral screening: A sector-specific screening model is employed, incorporating a range of financial and operational metrics to assess the long-term viability of companies. Firms exhibiting consistently positive trends across these metrics are shortlisted for deeper evaluation. 

2. Financial modelling & common-size analysis: Detailed financial models are developed for selected companies to incorporate historical performance data and include a comprehensive common-size analysis to facilitate cross-sectional and time-series comparisons. 

3. One-year price target estimation: A one-year price target is determined using a Discounted Cash Flow (DCF) approach. The initial Weighted Average Cost of Capital (WACC) used to discount projected free cash flows is tailored for each company. It reflects factors such as the firm’s business model, geographical distribution of sales, functional currency risk-free rate, and outstanding leverage profile. DCF models’ assumptions are regularly benchmarked against the most recent earnings releases from companies.    

BNP Paribas

As a top 5 commercial banking group in the Eurozone, BNP Paribas continues to navigate a complex macroeconomic backdrop marked by persistent monetary policy uncertainty, tightening regulatory requirements, and muted credit demand. Yet beneath these cyclical headwinds, the bank’s diversified business model, anchored by robust corporate and investment banking operations, expanding wealth management, and a solid retail footprint, continues to generate resilient earnings and strong capital returns. Cost efficiency initiatives and disciplined balance sheet management have further strengthened profitability metrics, while capital ratios remain comfortably above regulatory thresholds.  

After a period of valuation compression triggered by heightened uncertainty surrounding the French government crisis, the stock is now trading at a compelling discount relative to its European peers. Supported by a rising dividend stream, an active share buyback program, and a strong capital position, BNP Paribas presents an attractive blend of income resilience and potential for long-term re-rating as the French risk premium gradually normalizes. 

Sector	Banks
Country	France
Price as at 31.10.2025	€67.07
Price target	€84
Upside	25.52%

Spotify Technologies

Spotify Technologies faces a mix of near-term headwinds, including rising content acquisition costs, intensifying competition from Big Tech platforms, and market skepticism over its long-term margin potential. However, beneath these concerns, the company’s core growth engines, premium subscriptions, and its rapidly expanding advertising business continue to perform strongly. Recent pricing adjustments improved operating leverage, and disciplined cost control have materially strengthened profitability metrics.  

The company’s focus on product innovation, personalization, and high-margin verticals such as podcasts and audiobooks is steadily enhancing its ecosystem value. After a period of significant re-rating and technical digestion of recent accelerated growth, the stock now offers a compelling entry point for investors seeking exposure to the global leader in audio streaming. With improving margins, growing free cash flow generation, and untapped monetization potential across its vast user base, Spotify’s long-term growth narrative remains firmly intact. 

Sector	Communications
Country	Sweden
Price as at 31.10.2025	$655.32
Price target	$700
Upside	6.8%

Amazon.com Inc. 

Amazon continues to operate under several near-term headwinds, including regulatory scrutiny, a mixed macro backdrop for consumer spending, and intensifying competition across both retail and cloud services. Notwithstanding, the company’s core growth pillars, Amazon Web Services (AWS) and its advertising segment remain exceptionally strong, driving margin expansion and robust cash generation. The e-commerce business has benefited from renewed cost discipline, logistics optimization, and a structural shift toward higher-margin third-party and subscription services.  

Following a period of multiple compression and cautious investor sentiment, the stock appears attractively valued relative to its long-term earnings potential. With accelerating AI integration across AWS, continued innovation in fulfillment efficiency, an upcoming holiday season typically strong for its e-commerce business and a vast ecosystem that reinforces customer loyalty, Amazon’s fundamentals and long-term growth trajectory remain compelling.  

Sector	Consumer Discretionary
Country	U.S.
Price as at 31.10.2025	$244.22
Price target	$260
Upside	6.5%

Microsoft Corp 

Microsoft Corp. is counting on its key growth engines, Azure, Office 365, and its rapidly expanding AI and cloud infrastructure ecosystem, to deliver exceptional performance. Strategic integration of OpenAI’s models across its product suite is reinforcing Microsoft’s leadership in productivity and enterprise AI adoption. Operating discipline and strong free cash flow generation underpin continued shareholder returns through dividends and buybacks. After a price pullback period driven by expectations of heightened capex spending in the coming years, the stock presents an appealing entry point for investors seeking exposure to one of the most profitable and diversified technology franchises globally. 

Sector	Technology
Country	U.S.
Price as at 31.10.2025	$517.81
Price target	$550
Upside	6.3%

MercadoLibre 

MercadoLibre remains the undisputed leader in Latin America’s e-commerce and digital payments ecosystem, supported by a vertically integrated model spanning logistics, fintech, and credit services. This ecosystem continues to deliver strong user growth, rising monetization, and improving operating efficiency across key markets such as Brazil, Mexico, and Argentina. 

After a period of multiple compression driven by broader emerging-market risk aversion, MercadoLibre trades below historical valuation ranges, offering an attractive entry point relative to its long-term growth profile. The stock has recently consolidated around key support levels near its 200-day moving average, suggesting a potential base formation. Combining strong fundamentals, improving profitability, and a favorable technical setup, MercadoLibre offers a compelling risk-reward profile for investors seeking long-term exposure to the digital transformation of Latin America.  

Sector	Consumer Discretionary
Country	Uruguay
Price as at 31.10.2025	$2,327.26
Price target	$2,700
Upside	16.0%

This analysis was conducted by Cosmin Alexandru Mizof, Investment Manager at Calamatta Cuschieri.

Navigating investments in 2025 

Markets in 2025 are likely to remain dynamic, shaped by policy reversals, inflationary shifts, and sector rotations. Rather than trying to predict every macro turn, focusing on high-quality companies with solid earnings power, scalable models, and undervalued entry points may be the best path forward. 

These five picks represent a strategic mix of resilience, global diversification, and future-facing growth potential. Investors are still encouraged to do their own research or seek guidance from an expert advisor to set up their ideal investment portfolio. 

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This information document is issued by Calamatta Cuschieri Investment Services Ltd (“CCIS”) of Ewropa Business Centre, Triq Dun Karm, Birkirkara, BKR9034, Malta (C13729). CCIS is licensed to conduct Investment Services under the Investment Services Act in Malta by the Malta Financial Services Authority.

The value of the investment may go down as well as up and may be affected by changes in currency. Any performance figures quoted refer to the past and past performance is not a guarantee of future performance nor a reliable guide to future performance. This information is being provided solely for information purposes and should not be deemed or construed as investment advice, advice concerning particular investments, advice concerning investment decisions, tax, legal, or any other ancillary regulatory advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing on this document. No person should act upon any opinion and/or information in this document without first obtaining professional advice.