Three Technology Stocks Set to Shine in 2025
Wall Street has seen a phenomenal tech boom in 2024, driven largely by advances in artificial intelligence (AI) and other emerging sectors. As we look ahead, experts suggest that certain stocks could continue this upward trend into 2025.
After thorough analysis, three contributors from The Motley Fool have highlighted Broadcom (NASDAQ: AVGO), Qualcomm (NASDAQ: QCOM), and Meta Platforms (NASDAQ: META) as strong contenders for future gains. Each of these companies has a track record of substantial investment returns and has the potential for more.
Broadcom’s Promising Future After a Stellar 2024
Justin Pope (Broadcom): Broadcom has truly shined going into 2025, having surged over 95% since January. The semiconductor and enterprise software giant just concluded a very successful fiscal year 2024, reporting revenue of $51.5 billion, a 44% increase from 2023. Originally known for its semiconductors, Broadcom has significantly grown its enterprise software operations, particularly after acquiring VMware for $69 billion, which boosted its software revenue by 181% this past year.
While semiconductor revenue exceeded $30 billion in 2024 with a modest 7% growth, opportunities in AI are becoming increasingly important. Broadcom is partnering with notable AI developer OpenAI and is reportedly creating a dedicated AI chip for Apple‘s data center servers. This focus on AI could lead to exciting developments, as Broadcom’s AI revenue jumped 220% in 2024, reaching $12.1 billion. The company currently trades at 29 times its 2025 earnings estimates, suggesting it could be a solid investment, given analysts expect a long-term growth rate of 20%.
Qualcomm: Focused on Diversification for Recovery
Will Healy (Qualcomm): At first glance, Qualcomm stock seems troublesome. It has faced challenges since last summer as its growth driven by 5G technology slowed down. Additionally, Apple’s plans to design its own smartphone chip for release in 2027 may disrupt Qualcomm’s business.
Despite these concerns, Qualcomm is not without strategy. The company has diversified its operations into the Internet of Things (IoT) and automotive sectors, with the automotive division displaying remarkable success—growing 55% in fiscal 2024, while overall revenue rose just 9% during the same period. Qualcomm has also launched PC chips that outperform Apple’s M2 in some areas. Speculation about a potential acquisition of all or part of Intel could further solidify its position in the tech industry.
Following a 30% drop from its June peak, Qualcomm’s stock has still risen 20% over the past year, leading to a P/E ratio of 18, which is significantly below other companies in the chip sector. Although Qualcomm’s future appears uncertain with the potential loss of Apple’s business, investors may want to consider acquiring shares while the price remains attractive.
Meta: A Stock with Strong Historical Performance
Jake Lerch (Meta Platforms): Meta is a stock that consistently outperforms the market. Since its public debut in 2012, it has achieved a compound annual growth rate (CAGR) of 24.8%, nearly doubling the S&P 500’s return of 15.2%. Currently, Meta’s stock has risen 75% year-to-date, exceeding the S&P 500’s 28% increase.
The company’s impressive history is not the only reason to consider it for future investment. Meta generated $156 billion in revenue over the last year, recently ranking as the 22nd largest American company by revenue. Its free cash flow exceeded $52 billion, showcasing its ability to generate significant cash. This financial strength allows Meta to return value to shareholders through share buybacks, debt repayment, strategic acquisitions, and dividends. Earlier this year, Meta announced a $50 billion share repurchase plan and its first-ever dividend payment.
Investors looking for a strong stock for long-term gains should keep an eye on Meta.
Considering an Investment in Broadcom?
Before investing in Broadcom, it’s essential to note that the Motley Fool Stock Advisor has pointed out that Broadcom is not among their 10 best stock picks currently available. These recommended stocks could deliver significant returns in the future.
For context, consider that if you had invested $1,000 in Nvidia at the time it was recommended on April 15, 2005, you would have around $822,755 today!
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*Stock Advisor returns as of December 9, 2024
Randi Zuckerberg, a former market development director at Facebook and sister to Meta Platforms CEO Mark Zuckerberg, serves on The Motley Fool’s board. Jake Lerch has investments in Nvidia. Justin Pope holds no positions in the stocks mentioned. Will Healy owns shares in Intel and Qualcomm. The Motley Fool has positions in and recommends Apple, Home Depot, Intel, Meta Platforms, Nvidia, and Qualcomm, and recommends Broadcom while suggesting short options on Intel. The Motley Fool adheres to a strict disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
