Invest Smart: Top Three Stocks to Consider for 2025

As the year draws to a close, it’s a perfect opportunity to reflect on which stocks you might want to add to your investment portfolio for 2025 and beyond. With the holiday trading period being relatively calm, it’s an ideal time to carefully choose quality companies with promising future prospects.

To assist you in shaping your investment plan, I’ve narrowed it down to three specific stocks. Each of these companies boasts a strong track record of earnings growth, a loyal customer base, and the potential for long-term success. They are all leaders in the consumer goods sector. Let’s take a closer look at these three standout stocks.

Where to invest $1,000 right now? Our analyst team recently highlighted what they consider the 10 best stocks to buy at the moment. See the 10 stocks »

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1. Costco (NASDAQ: COST)

Costco Wholesale has consistently increased its revenue and profit over the years, even in challenging market conditions. Consumers keep returning for essentials like groceries and gas, drawn in by the retailer’s low prices. This resilience ensures Costco remains robust while other retailers may falter.

A key strength of Costco is its dependable high-margin profit source: membership fees. With renewal rates exceeding 92% in the U.S. and Canada, it’s evident that shoppers remain loyal to Costco. Additionally, the costs associated with issuing memberships are minimal, allowing the company to retain most of the fees as profit.

Despite having nearly 900 warehouses, Costco’s expansion continues. Its newest warehouse achieved record-breaking opening day sales of $2.9 million, and the company anticipates 29 new openings in the current fiscal year.

Costco shares are valued at 53 times their forward earnings estimates. This premium seems reasonable given the company’s fundamentals, which indicate strong future earnings growth.

2. Amazon (NASDAQ: AMZN)

Amazon has established itself with major operations in both e-commerce and cloud computing. The company boasts over 200 million members in its Prime program, which offers perks like fast shipping and access to entertainment.

Amazon Web Services (AWS) stands as the leading cloud service globally, significantly contributing to Amazon’s profits. Strong revenue continues to pour in from both e-commerce and AWS, with recent efforts to streamline costs and invest in artificial intelligence (AI) further fueling growth expectations.

AI initiatives are enhancing efficiencies in Amazon’s fulfillment processes, lowering operational costs. Furthermore, AWS is generating substantial revenue from its AI offerings, recently hitting an impressive $110 billion annualized revenue run rate, indicating strong future potential.

3. Chewy (NYSE: CHWY)

Chewy provides a wide range of products for pets, including food, toys, and medications, primarily through its e-commerce platform. Recently, the company expanded into veterinary care, adding another revenue stream.

This move allows Chewy to tap into a significant market, valued at $25 billion for veterinary services. The company has opened six clinics so far and plans to establish one to two more in the current fiscal year.

Chewy’s loyal customers also support its e-commerce sales; the AutoShip service, which automatically delivers recurring orders, accounts for about 80% of its total sales. Additionally, Chewy is profitable, maintains over 26% gross margins, and carries no debt, making it a solid option for long-term investment.

Seize This Opportunity

Have you ever felt like you missed out on investing in successful stocks? If so, there’s an exciting opportunity at hand.

Our analysts often identify companies ripe for growth, providing “Double Down” stock recommendations. If you are concerned about missing the best times to invest, now might be the time to act before opportunities pass. Consider notable examples:

• Nvidia: $1,000 invested since our recommendation in 2009 would now be worth $363,593!*
• Apple: A $1,000 investment from 2008 is worth $48,899!*
• Netflix: A $1,000 investment from 2004 has grown to $502,684!*

Currently, we’re spotlighting three more companies for a potential “Double Down” opportunity that investors won’t want to miss.

See 3 “Double Down” stocks »

*Stock Advisor returns as of December 23, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Chewy, and Costco Wholesale. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.