The AI Revolution: 3 Stocks Poised to Soar in 2025
As we enter a new year, the buzz around artificial intelligence (AI) continues to grow. With companies and individuals still figuring out how to harness its power, AI is becoming increasingly integral to various industries. The big players in the AI space have already seen significant gains, but smaller companies using AI to revolutionize traditional services are positioned to make a big impact in 2025.
Upstart Holdings: A Leader in AI-Powered Credit Evaluation
Upstart Holdings (NASDAQ: UPST) is one such company that’s changing the game in the credit evaluation space. Its AI-powered platform approves more loans with lower risk to lenders, making it a powerful idea. Although the company faced challenges in 2024 due to high inflation and rising interest rates, it’s now recovering and poised to benefit from decreasing interest rates. With new products and credit partners on the horizon, Upstart’s revenue is expected to increase year over year in the fourth quarter, and Wall Street is anticipating positive net income in 2025. However, its volatile history means it’s only suitable for highly risk-tolerant investors.
Lemonade: Insuring the Future with AI
Insurance company Lemonade (NYSE: LMND) is using AI and machine learning to price policies more effectively and improve the customer experience. Despite reporting high losses initially, the company is turning itself around, with revenue growth remaining brisk and customers drawn to its low prices and ease of use. Management is confident that its system will prove itself over time, and its results have been improving over the past few quarters. If Lemonade continues to reduce its loss ratio, it could be a top performer in 2025.
Revolve Group: The Future of Fashion
Revolve Group (NYSE: RVLV) is an online-only retailer that’s using AI to sell clothing and related products on its website. The company struggled during the high-inflation years but has since turned a corner, with revenue increasing 10% year over year in the third quarter and net income rising 238%. Its social-media-focused business is earning the loyalty of a broad cross-section of buyers, and its “softer” metrics tell a story of a company that’s resonating with its core customers. If Revolve maintains or accelerates revenue while delivering profits and generating more cash, it could be a standout stock again in 2025.
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