Wall Street’s Bright Future: Top Stock Picks for 2025
In less than two weeks, we’ll be closing out what is expected to be another stellar year for Wall Street. As of December 17, the renowned Dow Jones Industrial Average, broad-based S&P 500, and growth-focused Nasdaq Composite have risen by 15%, 27%, and 34%, respectively. While these numbers are impressive, Wall Street’s focus is always on what lies ahead.
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Currently, with the stock market reaching historic highs, I don’t see a straightforward upward trend for equities in 2025. However, I’m not retreating. As a long-term investor, most of the 35 positions I plan to hold into 2025 have been part of my portfolio for over a year.
My investment strategy resembles that of Warren Buffett, emphasizing a few significant ideas requiring considerable capital. My top 10 portfolio holdings for 2025 represent 75% of my invested assets, excluding cash, and I anticipate their performance in what may be a tough market.
Image source: Getty Images.
1. Teva Pharmaceutical Industries
My largest investment is in Teva Pharmaceutical Industries (NYSE: TEVA). The company recently announced impressive phase 2b data for its experimental inflammatory bowel disease drug, duvakitug, alongside Sanofi. Teva’s strategic move from low-margin generic drugs to higher-margin brand-name therapies positions it for solid revenue and profit growth in the coming years.
Additionally, Teva has resolved its major issues, including long-term opioid litigation, and has cut its net debt from over $35 billion after the Actavis buyout in 2016 to approximately $15.7 billion as of September’s end. With a forward price-to-earnings (P/E) ratio of 7.5, Teva appears to be undervalued.
2. SSR Mining
Despite Teva’s success, precious metals miner SSR Mining (NASDAQ: SSRM) faced challenges after the collapse of a heap leach pad at its Copler mine in Turkey, which may lead to $300 million in remediation costs over the next two to three years. However, I believe the company is worth more than its current valuation due to the recent acquisition of the Cripple Creek & Victor gold mine from Newmont Mining and ongoing production from its Marigold and Seabee mines.
SSR Mining has historically maintained a net cash position, providing ample capital to address its difficulties in Turkey.
3. Meta Platforms
While the market buzzes about Meta Platforms’ (NASDAQ: META) ventures into artificial intelligence (AI) and the metaverse, its advertising strength remains impressive. The company attracted 3.29 billion daily active users by the end of September, far surpassing any competitor. With such user engagement, Meta commands strong ad pricing power.
Meta’s robust balance sheet, showing $70.9 billion in cash and equivalent assets, allows for aggressive investments in growth opportunities. Additionally, it’s on track for nearly $85 billion in net cash from operations in 2024. Even close to historic highs, a forward P/E of 24 suggests a reasonable price.
4. Bark
I also favor small-cap stocks, including my fourth-largest holding, pet products provider Bark (NYSE: BARK). The company primarily earns money through direct-to-consumer sales, capitalizing on the fact that pets are seen as family members in many households.
Bark prioritizes cost control and positive cash flow over rapid sales growth, achieving a direct-to-consumer gross margin of nearly 65%. It has the potential to reach profitability in the near future.
5. Lovesac
Another small-cap stock I back is furniture retailer Lovesac (NASDAQ: LOVE), which earns over 91% of its net sales from its modular couches called sactionals. This product innovation differentiates Lovesac in a crowded market.
With a focus on an omnichannel sales strategy, Lovesac minimizes costs through a combination of physical stores, direct-to-consumer sales, and partnerships. Despite navigating some short-term challenges, its long-term growth potential is promising.
6. PayPal Holdings
The sixth-largest holding in my portfolio for 2025 is PayPal Holdings (NASDAQ: PYPL). Although competition in digital payments is increasing, PayPal has managed to grow the average number of payments per active account from 40.9 at the end of 2020 to 61.4 as of September 30, 2024, indicating high user engagement.
Since Alex Chriss took over as CEO last year, having previously worked at Intuit, he has effectively driven innovation while enhancing profit margins. PayPal’s rigorous share buyback program, which has purchased $5.4 billion in shares over the last year, is expected to positively impact earnings per share.
Image source: Getty Images.
Top Investment Picks for 2025: Banking, Advertising, and Silver Mining
1. Bank of America
The formidable Bank of America (NYSE: BAC) stands as my oldest investment, held since 2011, and is one I’m unlikely to part with anytime soon.
What sets BofA apart is its sensitivity to interest rates among major American banks. While a reduction in rates could negatively impact the bank’s net interest income, its recent performance has been bolstered by the steepest rate increases in four decades — rising 525 basis points from March 2022 to July 2023. This gradual easing of rates should allow BofA to continue benefitting in the market.
The election of President Donald Trump in November presented another encouraging scenario for bank stocks; the anticipated relaxation of banking regulations is expected to lead to improved profitability for institutions like Bank of America.
2. Pinterest
For 2025, my eighth-largest asset will be the social media platform Pinterest (NYSE: PINS). Although the pandemic caused fluctuations in its monthly active users (MAUs), a broader analysis reveals a steady upward trend over the past eight years.
Pinterest has surpassed 500 million MAUs, attracting advertisers willing to invest more. The global average revenue per user (ARPU) saw a 5% increase in the quarter ending September, with substantial growth noted in emerging markets.
Additionally, Pinterest distinguishes itself with an operating model that gathers user interests without intrusive data-tracking tools. This organic collection of data enhances the company’s advertising pricing leverage.
3. PubMatic
Another notable investment in my portfolio is the digital advertising company PubMatic (NASDAQ: PUBM), which features prominently on my list as my ninth-largest holding.
PubMatic operates in digital advertising, one of the fastest-growing sectors. Their cloud-based programmatic ad platform allows publishers to sell their digital ad space, focusing on areas like video, mobile, and connected TV, promising sustained double-digit growth in spending.
A key strength of PubMatic is its decision to develop its cloud infrastructure in-house, enabling them to maintain better profit margins as they scale revenue.
As a financial bonus, PubMatic has over $140 million in cash and equivalents, no debt, and a history of share repurchases, which bolsters its financial health.
4. First Majestic Silver
Concluding this list is silver mining company First Majestic Silver (NYSE: AG), which ranks as my tenth largest holding.
First Majestic’s acquisition of Primero Mining in May 2018 significantly lowered my cost basis to about $2 per share. Notably, I have scaled back my stake in this company by 61% since the acquisition.
While there is growing enthusiasm for silver due to the rising demand for solar panels and electric vehicles, First Majestic Silver’s history has been rocky regarding production costs and profitability. However, recent acquisitions like Gatos Silver and a decrease in capital expenditures hint at a favorable cash flow outlook moving into 2025, despite my intention to reduce my investment further next year.
Should you invest $1,000 in Teva Pharmaceutical Industries now?
Before considering an investment in Teva Pharmaceutical Industries, take note:
The Motley Fool Stock Advisor team recently highlighted their view on the 10 best stocks to consider right now, and Teva was not included in that selection. The recommended stocks are expected to yield significant returns in the coming years.
For context, Nvidia made the list on April 15, 2005, and if $1,000 had been invested then, it would be worth approximately $790,028 today!*
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*Stock Advisor returns as of December 16, 2024
Bank of America is an advertising partner of Motley Fool Money. Randi Zuckerberg, a former director of market development at Facebook and sister to Meta Platforms’ CEO, is on The Motley Fool’s board of directors. Sean Williams holds positions in Bank of America, Bark, First Majestic Silver, Lovesac, Meta Platforms, PayPal, Pinterest, PubMatic, SSR Mining, and Teva Pharmaceutical Industries. The Motley Fool recommends positions in and recommends Bank of America, Intuit, Meta Platforms, PayPal, Pinterest, and PubMatic, and has a disclosure policy.
The views and opinions expressed herein reflect the author’s views and do not necessarily represent the views of Nasdaq, Inc.
