Growth Stocks Shine Bright: What to Expect in 2025
2024 has been a promising year for many investors, especially in the realm of growth stocks. As we look ahead, what’s in store for 2025? Analysts are optimistic, pointing to lower corporate taxes and interest rates as potential boosts.
This year has favored stock pickers, and it seems that trend will continue into 2025. Investors are encouraged to be choosy about their stock selections.
Now is a crucial time to consider top-performing stocks. Here are three sector leaders poised for strong returns in 2025.
Meta: A Leader in the AI Revolution
Artificial intelligence (AI) is predicted to be a driving force for growth stocks next year. Still, investors are becoming selective about which AI companies to trust. Many have invested heavily into AI, only to see minimal returns.
Meta Platforms Inc. (NASDAQ: META) stands out with its substantial investments and effective monetization strategies. A critical aspect of this success is its digital advertising. Rather than a broad, scattershot approach, Meta utilizes data analytics and machine learning to deliver targeted ads based on user behavior. The company is also aiming to generate revenue from its AI services and tools.
Recently, Meta announced plans to significantly increase its AI spending. This has led to a slight dip of about 1% in META stock since its last earnings report in October 2024. Concerns linger about past spending on the Metaverse. However, analysts remain positive, raising their price targets based on Meta’s strong market position.
JPMorgan: The Standout in Financial Services
When exploring the top sectors for 2025, finance stocks are a frequent topic of discussion. Anticipated lower interest rates and potential regulatory rollbacks, like the Basel III Endgame, position U.S. banks favorably.
A strong entry point in this sector is JPMorgan Chase & Co. (NYSE: JPM). The stock saw an increase of over 12% in the 30 days ending November 26, which is nearly double the growth of the Financial Select Sector SPDR ETF (NYSE: XLF). This growth contributes to a robust 47% rise for JPM during much of 2024.
Alongside potential stock appreciation, JPMorgan offers a reliable 2% dividend yield, which translates to an annual payment of $5 per share. Notably, the bank has increased its dividend for 14 consecutive years.
Exxon Mobil: Positioned for an Oil Market Upswing
Scott Bessent, a nominee for Treasury Secretary under President-elect Donald Trump, has emphasized a sharp increase in U.S. energy production, aiming for an additional 3 million barrels of oil per day. This suggests an upcoming oil boom.
Thus, investing in oil stocks, especially with a leader like Exxon Mobil Corp. (NYSE: XOM), is worth considering. Critics may note that XOM has performed well under the Biden administration, but significant gains were observed in 2021 and 2022 due to COVID recovery and geopolitical issues rather than policies.
With the anticipated lift in regulatory pressures, oil companies are set to benefit, even as Exxon may find it easier to navigate regulations compared to smaller competitors.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
