The economy strongly influences industrial stocks, which have fallen during recent downturns. However, 2025 looks like a key year for this sector, with these companies working in manufacturing, shipping, and aerospace, and investors are now focusing on businesses that adapt quickly to global shifts. The industrial sector grew 26% in 2024, showing strength despite high inflation and weak global demand. Going into 2025, these stocks are getting more attention thanks to new growth drivers and better economic conditions.
Even with possible higher tariffs under Trump’s trade policies, the outlook remains positive. President Trump has proposed a 25% tariff on steel and aluminum from countries like South Korea, Vietnam, and Canada. These tariffs might raise costs and also boost U.S. infrastructure and manufacturing spending; as Canada’s Innovation Minister Francois-Philippe Champagne said,
“Canadian steel and aluminum support key industries in the U.S., from defense, shipbuilding, and auto. We will continue to stand up for Canada, our workers, and our industries.”
All in all, this trade shift could help American industrial companies, especially those bringing supply chains back home.
Moreover, lower interest rates should help the sector by increasing construction and housing projects in 2025. On the other hand, falling mortgage rates will attract more homebuyers, creating demand for building materials and equipment. Ken Fisher said, “Investors are ignoring some of these positive developments,” pointing to an overlooked chance in housing-related businesses.
Aerospace is also making a comeback through airlines’ need to replace aging planes, driving demand for maintenance and parts, which demonstrates significant progress in aerospace-based companies. Meanwhile, only 25% of the $1.9 trillion in planned North American infrastructure projects have started construction, suggesting big growth ahead for equipment providers and construction companies.
In 2025, industrial stocks look promising due to clean technology and automation advancements. As reported in Deloitte’s 2025 Manufacturing Industry Outlook, over $31 billion went into clean-tech manufacturing facilities in 2024, showing a move toward sustainability. With decreasing interest rates and high demand for environmentally friendly tech, these investments are highly probable to drive growth in the industry. Ken Fisher noted made the following comment about the current situation:
“The fear is bigger than the problem can be. Single-period stock market comparisons are always iffy, but it may well be this goes something like the 1998 stock market correction leading to a 26% annual return.”
His view suggests a more positive review of the industrial sector, predicting it will grow despite tariff concerns. With investments in automation, clean tech, and domestic production, these stocks have strong long-term potential even with short-term challenges.
To compile this list, we reviewed Ken Fisher’s SEC Q4 2024 13F filings. We picked 10 stocks with the highest upside potential from their current levels as of time of writing this article. Finally, we ranked the stocks in ascending order based on their highest analyst upside potential while also outlining hedge fund sentiment regarding these stocks, as per Insider Monkey’s database of Q4 2024.
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).
Union Pacific Corporation (UNP): Among Billionaire Ken Fisher’s Industrial Stock Picks with Huge Upside Potential
An intermodal container train winding through a rural landscape.
Number of Hedge Fund Holders: 93
Upside Potential: 20.00%
Union Pacific Corporation (NYSE:UNP) operates as a freight rail company, having a major role in the industrial supply chain of the U.S. It carries agricultural and energy commodities, chemicals, construction materials, and intermodal containers to many major areas, driving sectors like agriculture, manufacturing, and energy. Although the railroad sector was stagnant for the year prior, the company continued to provide its services, positioning it as a top industrial stock for 2025.
For the first quarter ended March 31, 2025, Union Pacific Corporation (NYSE:UNP) posted $2.70 EPS, just falling short of expected results, as revenue stood at $6 million. However, freight revenue was $5.7 billion, an increase of 1% or 4% when excluding lower fuel surcharges. Whereas volume rose 7% YoY, though business instability and a drop of $100 million in fuel surcharge revenue pressured margins. Moreover, net profits stayed at $1.6 billion, with the operating ratio unchanged at 60.7%.
Union Pacific Corporation (NYSE:UNP) hit a record first-quarter performance despite tight margins. Freight cars moved faster at 215 miles daily, terminals processed cars 6% quicker, and the service score rose six points to 93%. Meanwhile, strong bulk and premium shipping, particularly West Coast intermodal traffic, made up for drops in auto and petroleum shipments.
Management is stuck with its yearly forecast, aiming for EPS growth of 7-12%, while Q2 might have weaker intermodal demand, the company expects prices to stay strong. Looking ahead, Union Pacific Corporation (NYSE:UNP) is confident about meeting its three-year targets despite ups and downs in global trade.
Due to the company’s strong positioning with $1.43 billion worth of shares making up around 0.57% of Fisher’s portfolio, Union Pacific is a top candidate for Ken Fisher’s top 10 industrial stock picks.
Overall, UNP ranks 10th on our list of billionaire Ken Fisher’s industrial stock picks with huge upside potential. While we acknowledge the potential of UNP, our conviction lies in the belief that certain 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 an AI stock that is more promising than UNP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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