Top Nasdaq Performers: 5 Stocks to Watch in 2025
The Nasdaq Composite has consistently outperformed the S&P 500, and 2024 was no exception, with a remarkable 28.6% gain. As we enter 2025, I’m confident that certain companies within the Nasdaq Composite will continue to excel. Here are five top picks that I believe are poised for success: Meta Platforms, Alphabet, ASML, PayPal, and MercadoLibre.
Artificial Intelligence: A Key Investment Theme
Artificial intelligence (AI) has been a dominant investment theme in recent years, and I expect this trend to continue in 2025. Three of my top picks, Meta, Alphabet, and ASML, are leaders in AI innovation.
Meta and Alphabet: Advertising Giants with AI Muscle
Meta and Alphabet, parent companies of Facebook and Google, respectively, are well-known for their advertising prowess. Their significant AI investments have enabled them to develop cutting-edge models, such as Google Gemini and Meta’s Llama, which are among the best-performing in the industry. Despite their dominant market position and solid progress in AI, these two stocks are trading at attractive price tags, with forward price-to-earnings ratios of 23 and 21.2, respectively.
ASML: A Monopoly in Microchip Production
ASML, a leader in extreme ultraviolet lithography machines, holds a monopoly in the microchip production space. Although Western governments have restricted its sales to China and its allies, ASML’s management remains confident in its long-term growth prospects. With its unique technology and strong revenue guidance, ASML presents a compelling investment opportunity, particularly given its 35% decline from its all-time high.
PayPal and MercadoLibre: Value Opportunities
PayPal and MercadoLibre offer significant value opportunities. Under new CEO Alex Chriss, PayPal has made significant strides, with rising free cash flow and a dramatic reduction in share count. MercadoLibre, the e-commerce giant in Latin America, has faced challenges due to bad debt in its credit card division, but Wall Street analysts project 38% earnings per share growth in 2025. With its strong fintech division and growth potential in Latin America, MercadoLibre is an attractive investment opportunity.
Invest with Confidence
These five stocks offer a mix of growth and value opportunities, and I believe they are solid buys for 2025. With their strong fundamentals and promising outlooks, investors would be wise to take a position in these companies now.
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