Titled for Tomorrow: Unveiling Potential Top Stocks to Invest in 2025
As the New Year approaches, investors are pondering their investment strategies for 2025. With trends changing swiftly, it's crucial to focus on a company's fundamentals before making any investment decisions.
If you're searching for top-notch stocks that are currently profiting from powerful tailwinds, Amazon (AMZN 0.01%), SoFi Technologies (SOFI -2.41%), and Carnival (CCL 1.43%) (CUK 1.44%) might be smart picks.
1. Amazon – Triumphing in AI Innovation
Amazon has been leading the AI revolution since unveiling its AI technology two years ago. It continues to dominate this sphere, offering a plethora of services on its AWS platform and even developing its own graphics processing units (GPUs) to challenge Nvidia.
The AI industry is already generating billions in revenue, and as CEO Andy Jassy mentioned, 90% of global IT spending still goes toward on-premises systems, with only 10% invested in the cloud. Jassy expects these percentages to flip over time, and with Amazon's strong position in the AI sector, it's well-positioned to reap the rewards of this transformation.
Amazon is leveraging AI across its diverse business operations, including offering product descriptions based on prompts for third-party sellers and providing data analytics for advertising clients. These services are significantly boosting the company's overall performance.
Despite being a megacap company, Amazon has consistently demonstrated impressive double-digit percentage revenue growth and stands as a highly profitable enterprise. In 2025, it could be particularly prosperous as the AI trend fuels its progress.
2. SoFi – Bouncing Back in Lending
For SoFi, lower interest rates will be the key driving trend in 2025. The company's stock struggled this year due to challenges in its core lending business, but the lower interest rates are now benefiting the lending segment while the rest of its operations are already thriving.
SoFi strategically increased user engagement with its cross-selling and upselling initiatives, and the 2019 acquisition of Golden Pacific Bancorp gave it a banking charter. The company's three main business segments are lending, financial services, and tech platform.
The lending segment, which accounts for over half of SoFi's total revenue and most of its profits, is again experiencing strong growth. Revenue increased by 14% in the third quarter, and contribution profit was up by 17%.
SoFi's financial services segment, which includes bank accounts and investments, has enjoyed a tremendously successful year with increased revenue and improved contribution profit. The tech platform segment also reported 14% revenue growth and a 2% improvement in contribution profit.
On a consolidated basis, SoFi has posted four consecutive quarters of positive net income, and management is optimistic about maintaining this trend in 2025. With renewed momentum in its lending business and a strong customer base, SoFi's stock could shine in 2025.
3. Carnival – Recovering from Pandemic Woes
Carnival's tailwind is the decline of inflation, although it's benefiting from lower interest rates as well. The cruise line has recovered impressively from the pandemic, but its recovery still has a few hurdles to overcome.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 25% year over year to $2.8 billion in its third quarter of fiscal 2024, which ended August 31. Management also raised its guidance, anticipating a 40% adjusted EBITDA increase for the fiscal year. With input costs and advertising spending rising, Carnival's adjusted operating income increased by $554 million, reaching $2.2 billion, and reported $1.7 billion in net income. Analysts predict earnings per share of $1.33 for 2024.
Carnival is still carrying a significant debt load, but it has been paying it off efficiently with lower interest rates providing additional ease. The demand for cruises remains robust, and Carnival finds itself in the best-ever booked position with more than half of its 2025 inventory already sold out.
With unwavering demand for cruises, Carnival is poised for a strong recovery in 2025, and its stock performance should reflect this momentum.
- To further bolster their investment portfolios, investors might want to consider allocating funds towards companies that are strategically leveraging emerging technologies, such as Amazon, which is capitalizing on the AI revolution by innovating in AI services and hardware.
- In the realm of finance, SoFi Technologies presents a compelling investment opportunity with lower interest rates leading to growth in its lending segment while other operations also continue to thrive, contributing to a strong bottom line for the company.
