Several regions report stronger than expected domestic demand, even as inflation and energy costs stay in focus. That mix often pushes investors to look more closely at companies where analysts see earnings growth potential and balance sheets that appear solid. This article picks out three stocks from the Healthy high growth potential screener and explains why each one could merit a place on your watchlist right now.

The three stocks highlighted below are just a starting sample from this theme. The full screen surfaced 280 more companies with equally compelling narratives that are not covered here. If you want to go broader and build your own shortlist, head straight into the Healthy high growth potential screener.

Unusual Machines (UMAC)

Unusual Machines is a US commercial drone company that sells small drones and key components to business, government and retail customers, and is working with Lantronix to add edge AI to its flight control systems. The company currently generates about $31.9 million in revenue from its Aerospace & Defense segment, all from the United States. Unusual Machines has a market cap of about $1.7b, which puts it firmly in mid cap territory for investors tracking the commercial drone and defense technology space.

Unusual Machines sits at the intersection of domestic drone production, defense spending and AI hardware, which is why many investors are watching it closely. The company is building out US manufacturing capacity and has landed government orders for defense drone systems. At the same time, the stock is highly volatile, currently unprofitable and heavily reliant on government demand and external funding, which creates execution and valuation risk. If you are interested in exposure to US onshoring and NDAA compliant drone components, this is a story that may warrant a closer look beyond headline forecasts.

Unusual Machines sits at the intersection of US onshoring, defense spending and edge AI, yet the real story may be buried in the details of its contracts, cash runway and growth ambitions in the analysis report for Unusual Machines

Build your own edge AI and defense shortlist

Unusual Machines and the two other stocks in this article all came out of a single Simply Wall St screen, but the real advantage comes when you shape the filters yourself. Use our flexible Screener to mix metrics such as valuation, growth and balance sheet strength, or start from any of our ready made Investing Ideas for a curated path into new ideas.

Cerebras Systems (CBRS)

Cerebras Systems builds wafer scale AI chips and full rack systems for data centers that are designed to run inference and large language models faster than traditional GPU clusters. The company generates all of its roughly $680.7 million in revenue from its Semiconductors segment and has customers ranging from hyperscalers and foundation model labs to enterprises and Sovereign AI projects across the US, Europe, the Middle East and Africa. Cerebras Systems currently has a market cap of about $52.0b, which places it firmly in mega cap territory within AI infrastructure.

Investors looking at Cerebras Systems are weighing a mix of hardware performance, contract visibility and valuation signals. Its wafer scale engine sits at the heart of a reported $25.4b remaining performance obligation backlog, supported by multi year deals with OpenAI and AWS that are feeding core revenue and capacity expansion plans into 2027. At the same time, the stock is highly volatile, is still loss making with a history of rising losses, and relies heavily on external borrowing and a handful of large customers. Analysts currently expect rapid earnings and revenue growth and see upside to the share price, yet recent insider selling and the reliance on rented systems keep the risk side of the story significant.

Cerebras Systems is racing ahead with a $25.4b backlog and mega cap scale, yet its loss making profile and reliance on a few big contracts leave key questions. Get the full context in the 3 key rewards and 2 important warning signs (1 is major!)

Nu Holdings (NU)

Nu Holdings is a Latin American digital bank that bundles everyday banking, credit cards, savings, investing, crypto, insurance and even travel and mobile services into a single app for customers across Brazil, Mexico, Colombia and a few smaller markets. The business now carries a market cap of about US$73.6b, which puts Nu in large global bank territory despite its fully digital model.

Nu Holdings sits at the heart of a shift away from high fee, branch heavy banking toward low cost mobile finance that 139 million customers now use for daily money management. Earnings and revenue growth forecasts remain strong, profitability metrics such as a 42.7% net margin and high expected ROE stand out, and recent quarters included the first US$1b net income quarter and a US$1b buyback. The trade off is credit risk, with bad loans at 8.6%, and a heavier regulatory burden as Nu secures full banking licenses in Brazil and Mexico. For investors who want exposure to this mix of high growth, strong margins and rising oversight, there is more to unpack in the full Nu story.

Nu Holdings blends app led banking, a 42.7% net margin and 139 million customers in a way many investors may still be underestimating. See how the story shifts when you line that up with analyst forecasts for Nu Holdings

Seeking Alternatives Before Momentum Flies

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.