Is Atlas Energy Solutions (AESI) One of the Oversold Growth Stocks to Buy Now?
We recently published a list of 11 Oversold Growth Stocks to Buy Now. In this article, we are going to take a look at where Atlas Energy Solutions Inc. (NYSE:AESI) stands against other oversold growth stocks to buy now.
The growth stocks, primarily proxied by high and consistent revenue growth, have shown sluggish performance in 2025 so far despite strong gains during the 2023-2024 period. The growth factor has been muted year-to-date due to the Trump-induced turmoil and uncertainty, favoring the safer value stocks instead. This has led to many growth stocks being oversold and trading at attractive valuations. Despite this, investors are still reluctant to buy because the overall market is still in 'fear' territory as proxied by the CNN Fear & Greed Index being at a relatively low value of 36/100. The key question to answer in this article is the following: Will the US stock market finally return to stability and growth?
READ ALSO: 11 Oversold Blue Chip Stocks to Buy According to Hedge Funds
We believe there are some strong indicators that support the hypothesis that the market has bottomed and the outlook will shift bullish very soon. First, the market tends to bottom when there is peak pessimism in the news and among retail investors – this has happened last week as the Fear & Greed Index was in Extreme Fear territory and some notorious news portals like The Economist have published extremely bearish first-page stories suggesting that the dollar might be on the verge of collapse and so might the US stock and bond markets along with the US economy. Mainstream news portals tend to be late to the party and only acknowledge market depression after they have happened. From a contrarian perspective, this would mean that peak pessimism was already priced in sometime at the beginning of the month, and things could only get better from here.
Our hypothesis has already gotten some confirmation as the US stock market is up more than 5% since the beginning of the week, with the VIX index – a notorious proxy of investors volatility expectations – showing a score of 25, which is significantly below the peak of 60 around 'Liberation Day' early this month. The VIX index score is thus close to its long-term moving average, which stands in the high teens, indicating that the market's expectations are already normalizing. More certainty coming to the market is extremely bullish for stock prices and for the entire economy – it unmutes the Roaring 2020s economic tailwinds and gives clarity to CEOs and consumers to start spending again.
Another important indicator suggesting a potential return to growth for the stock market is the high-yield corporate bond spread declining from 461bps a few weeks ago to 348bps, as per Yardeni Research. High-yield bonds are usually related to smaller, high-growth companies, which resonate well with the growth factor we discussed earlier in the article. Declining yields for corporate bonds reflect less expectation of default, which tends to happen in anticipation of economic expansions.
Last but not least, the S&P index trades at a forward P/E of 19.5, which is significantly cheaper than the late 2024 peak of around 22.0. This means that there are more bargain prices to be found now than a few months ago, and if one expects the market to return to growth, then now is the best moment to find bargain deals. Many growth stocks are still in oversold territory from the effect of the tariff uncertainty, inflationary threats, and slowdowns across some industries.
Aerial view of oil rig in the Permian Basin, illustrating the expansive operations in West Texas and New Mexico.
To compile our list of oversold growth stocks, we used a screener to identify stocks with at least 20% revenue CAGR in the last 5 years, which are currently oversold by having an RSI below 40 and have significant average upside estimated by analysts. We rank them in descending order by the RSI value. For each stock, we also include the number of hedge funds that own the stock, 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 ().
Atlas Energy Solutions Inc. (NYSE:AESI) is an energy services company specializing in proppant production and logistics for hydraulic fracturing operations, primarily in West Texas and New Mexico. It operates 14 proppant production facilities and manages its own logistics network. AESI also expanded into power solutions by adding a fleet of natural gas-powered generators to its offerings.
Atlas Energy Solutions Inc. (NYSE:AESI) has demonstrated significant growth since its IPO in March 2023, with its productive capacity increasing nearly 2.5x and now offering the largest wet sand operation in the Permian Basin. The company has successfully launched the Dune Express, making commercial deliveries off the second-longest conveyor ever built, and is pioneering the world's first commercial driverless delivery operation in partnership with Kodiak Robotics.
Looking ahead, 2025 is positioned to be a transformational year for Atlas Energy Solutions Inc. (NYSE:AESI), with the company expecting to sell over 25 million tons compared to around 20 million tons in 2024. The company has closed the acquisition of Moser Energy Systems, providing a new avenue for growth in the rapidly expanding distributed power market. The company is also seeing early signs of healing in the Permian proppant market, with more rational behavior on pricing and expectations of a gradual return to normalcy in sand pricing later in the year. Despite experiencing negative returns due to softening oil prices, AESI is growing its operations at a rapid pace, making it one of the best oversold stocks to consider.
Overall, AESI ranks 9th on our list of oversold growth stocks to buy now. While we acknowledge the potential of AESI to grow, our conviction lies in the belief that 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 AESI 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.
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