Why Gaotu Techedu Inc. (GOTU) is Surging in 2025

We recently published a list of Why These 15 Consumer Defensive Stocks Are Surging in 2025. In this article, we are going to take a look at where Gaotu Techedu Inc. (NYSE:GOTU) stands against other consumer defensive stocks that are surging in 2025.

The stock market has taken a sharp turn after two years of blockbuster gains, and many investors have felt uneasy. These investors are now turning to consumer defensive stocks due to growth stocks sputtering amid a new wave of tariffs rattling global trade.

Consumer defensive stocks provide essential goods and services that people rely on regardless of economic conditions and are more insulated during market downturns. Investors have piled into consumer defensive stocks for that reason, and it’s a good idea to look into the biggest winners in this sector.

Even during bear markets, there are pockets of the market that perform exceptionally well. For example, I identified Why These 15 Healthcare Stocks Are Surging in 2025 in another article.

For this article, I screened the best-performing consumer defensive stocks year-to-date.

I will also mention the number of hedge fund investors in these stocks. 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 line of students working on their computers in an after-school tutoring center.

Number of Hedge Fund Holders In Q4 2024: 15

Gaotu Techedu Inc. (NYSE:GOTU) is a Chinese education technology company offering online tutoring services for K-12 students, along with foreign language, professional, and interest-based courses.

A significant factor in the company’s stock price performance in 2025 is its projected meaningful reduction in non-GAAP operating loss for 2025 compared to 2024, as announced on March 11, 2025.

The broader Chinese market has been responding positively to government announcements about implementing a “moderately loose” monetary policy strategy, which has created interest among investors in Chinese stocks like Gaotu Techedu Inc. (NYSE:GOTU).

The consensus price target of $5.81 implies 89.87% upside.

Gaotu Techedu Inc. (NYSE:GOTU) stock is up 40.18% year-to-date.

Overall, GOTU ranks 7th on our list of consumer defensive stocks that are surging in 2025. While we acknowledge the potential of GOTU as an investment, 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 GOTU but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.