Top Essential Shares to Invest in for 2025's Market
It's that time of year again, folks! I'm not speaking about buying presents or preparing holiday feasts - although those might be on your list as well. It's time to reflect on your portfolio's performance and plan for the year ahead.
The world has been generous to many this year, with all indexes on track for triple-digit gains. With a thoughtful blend of stocks, 2025 could be our year to shine. Above all, remember to look beyond the short term, as substantial gains over a number of years are our ultimate aim - so don't fret if your portfolio didn't perform as expected during any specific year, including this one.
Looking for some fresh investment ideas? Here are my top 10 picks - in no particular order - for the future. Most of these stocks boast a robust earnings history (except for the clinical-stage biotech that hasn't yet generated product revenue yet). And they all promise a bright future.
1. Nvidia
Despite Nvidia (NVDA -2.33%) surging over 160% this year, this tech titan still has room to grow. A major growth driver is currently unfolding: This powerhouse in AI chip design is ramping up production of its Blackwell architecture - and demand is reportedly "explosive," according to the company itself.
Blackwell is projected to add billions of dollars in revenue during its first quarter of commercialization, with a gross margin exceeding 70%. Nvidia's commitment to innovation should give it an edge over competitors, making the stock look fairly valued today at 43x forward earnings estimates.
2. Pfizer
Pfizer (PFE 0.42%) shares have taken a hit as the demand for its blockbuster COVID-19 products has waned. However, Pfizer has shifted its focus towards a plethora of new products - with 19 launches slated within an 18-month period. And its growing oncology division is noteworthy.
Last year, Pfizer acquired Seagen to bolster its oncology presence. And it's aiming high: the company wants to launch at least eight blockbuster cancer medications by 2030, and seeks to double the number of patients taking its cancer drugs.
This sets the stage for potential new growth, making now an opportune time to invest in the stock.
3. Viking Therapeutics
Viking Therapeutics (VKTX 1.18%) is venturing into the lucrative obesity treatments market. The company hasn't commercialized a product yet, but it's on the brink of entering phase 3 trials for VK2735 - a drug that belongs to the same class as blockbuster Zepbound, made by Eli Lilly.
The company has catalysts in the form of clinical trial data reports that could steer the stock in the next year. After a positive report earlier this year, the shares soared approximately 120% in a single trading session. This may not happen every time, but if VK2735 continues to deliver promising results, Viking could surge in 2025.
4. Amazon
Amazon (AMZN -0.86%) is an early leader in the AI realm, leveraging AI to improve its e-commerce operations and sell AI products and services through Amazon Web Services (AWS).
The reason to invest in Amazon now? Its AI strategy is starting to yield fruit. On the e-commerce side, Amazon is optimizing its fulfillment network to lower costs, while AWS revenue is picking up thanks to increasing AI demand. AWS reported a $110 billion annualized revenue run-rate in the recent quarter.
Amazon is already dominating e-commerce and cloud computing, and it's quickly becoming a force in AI as well.
5. Etsy
Etsy (ETSY -1.75%) deals primarily in discretionary items, so it struggled during periods of higher inflation. However, it could stage a comeback as consumers open their wallets during stronger economic times.
What I really like about Etsy is its lean business model. Etsy provides a platform for artisans to sell their wares and shoppers to buy them, but the company doesn't handle inventory or shipping - keeping its capital investments low. This allows Etsy to convert most of its adjusted EBITDA into free cash flow - 90% in the recent quarter.
The stock is currently trading at just 13x forward earnings estimates, making it a prime candidate for investment.
6. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX 0.84%) is a proven leader in the cystic fibrosis (CF) treatment market, reporting blockbuster revenue year after year from its CF drugs.
The company has shown investors that it has the chops to expand into other areas as well. It received approval for a blood disorders treatment last year, and it's now awaiting a regulatory decision on a potential drug that could be game-changing for the company. I'm talking about suzetrigine for moderate-to-severe acute pain.
Vertex sees the potential product as a multibillion-dollar opportunity, considering the limited treatment options currently available. The company anticipates a regulatory decision next month - and a potential launch, with revenue growth to follow - could make Vertex a stand-out in 2025.
CrowdStrike (CRWD dropping by 2.05%) is a renowned cybersecurity firm that encountered a significant obstacle this year. A flawed software update from CrowdStrike resulted in the largest IT breakdown in history.
This mishap is affecting the company's earnings as it offers clients compensation packages. However, these compensation packages are also encouraging clients to expand their contracts with the cybersecurity giant, potentially increasing future revenue for CrowdStrike.
Notably, CrowdStrike's loyal clients have continued their partnership despite the outage, and annual recurring revenue is still surging in double digits. The company anticipates the impact of the outage to decrease significantly by the end of next year, paving the way for further growth.
8. Abbott Laboratories
Abbott Laboratories (ABT gaining 0.28%) might not have a specific trigger imminent, but its diverse businesses and dividend distributions make it a strong contender for any investment portfolio.
I admire Abbott's setup, with operations spanning medical devices, diagnostics, nutrition, and mature pharmaceuticals. This multifaceted portfolio means that if one sector encounters challenges, others can offset the losses. This dynamic has been evident lately -- diagnostic revenue declined as COVID testing sales dwindled, but medical device sales grew impressively.
Abbott has boosted its quarterly dividend payout by 60% since 2020 -- a testament to the company's commitment to rewarding shareholders. Abbott's long-term history of enhancing its dividend suggests this practice will continue.
9. American Express
American Express (AXP dropping slightly by 0.18%) is another top-performing stock this year, with a gain of 60%. The credit card giant generates income through membership fees, interest from customer balances, and transactions at affiliated merchants. Its position in the premium market has proven to be a successful strategy, and its growth among the younger generation suggests this trend may persist.
In the latest quarter, American Express reported that millennial and Gen-Z customers account for 80% of new U.S. Consumer Gold Card accounts -- the fastest-growing segment for American Express in the U.S. During this quarter, the company achieved record revenue of $16.6 billion, with card fee revenue and member spending both increasing.
Consequently, this well-established company seems poised to provide substantial growth, fueled by a new generation of consumers.
10. Palantir Technologies
Some argue that Palantir Technologies (PLTR dipping by 2.01%) appears overpriced at present, trading for around 200x forward earnings estimates after increasing more than 300% this year. However, it's crucial to consider the company's growth trajectory. The AI-driven software company has seen a surge in sales to commercial clients -- even as its traditional government client revenue continues to climb.
In the recent quarter, U.S. commercial revenue rose by 54%, and U.S. government revenue increased by 40%. To top it off, Palantir reported its highest profit ever in the latest quarter. Given that it launched its Artificial Intelligence Platform just a year ago and commercial client growth appears to be in its early stages, this stock may still have substantial room for growth in the future.
As a result, it makes an excellent pick for growth investors looking towards 2025.
Based on the text, here are two sentences that contain the words 'investing', 'finance', and 'money':
- For those interested in investing, the author provides a list of top 10 stock picks for the future, including Nvidia, Pfizer, Viking Therapeutics, Amazon, Etsy, Vertex Pharmaceuticals, CrowdStrike, Abbott Laboratories, American Express, and Palantir Technologies.
- As you consider your finance and investing strategy for the year ahead, remember to look beyond the short term, focusing on substantial gains over a number of years. This approach can help you weather any market volatility and achieve your long-term financial goals.
