My 12 Top Stock Picks for 2025
And a review of the performance of my 2024 stock picks
2024 has been a strong year for the US stock market. In other markets, however, performance ranged from average to poor, such as in France, where the CAC40 delivered a negative return.
As with every year, the common activity is to predict next year’s champions. While I don’t invest with a 1-year horizon, as my perspective is much longer, it is always an enjoyable exercise.
My picks for next year should be viewed as stocks that might outperform in the short term but, more importantly, are quality investments with strong long-term potential.
With that said, let’s dive in!
Review of my 2024 stock picks
At the end of 2023, I selected 8 stocks that I believed could perform well in 2024. While the overall performance has been positive, it has underperformed compared to the Nasdaq and S&P 500. Nevertheless, the results are still decent.
Let’s review each stock:
Alphabet. Performance 38.0%. Despite strong performance in 2024, the stock remains well-positioned for 2025 with a reasonable valuation and several potential breakthroughs, such as Waymo (self-driving cars) and quantum computing. AI and cloud computing should continue to be the main growth drivers.
ASML. Performance 0.5%. A flat year for the industry giant due to weak order intake. However, the cycle is expected to improve soon.
Evolution. Performance -29.0%. The worst performer among my picks, with a market capitulation at the end of the year. Despite high regulatory and competition risks, I still believe the stock offers a reasonable risk/reward ratio.
Microsoft. Performance +14.5%. A decent performance, although it underperformed the S&P 500 in 2024.
Novo Nordisk. Performance -8.9%. A succession of bad news turned a strong start to the year into a disappointing outcome. However, the long-term trend remains positive.
Paypal. Performance +41.4%. In contrast to Novo Nordisk, PayPal had a weak start to the year but ended with strong gains as market sentiment recovered. Financial performance remained steady, with 7% growth and stable margins.
Unitedhealth. Performance -3.1%. UnitedHealth performed well in 2024 until the unexpected murder created media and political noise, significantly affecting market sentiment.
Visa. Performance +22.4%. A strong performance, though still below the S&P 500.
For those who followed the stock market in 2024, we have in the 8 picks, 4 stocks that had bad news: ASML weak global cycle, Evolution global bad market sentiment, Novo Nordisk disappointing results, Unitedhealth’s division CEO murder. Despite that the result remains positive around 9.5%.
More importantly, I still believe these eight stocks are poised to perform well over the next 5 to 10 years. In fact, they could remain my top picks for 2025, as none of their investment theses changed during the year.
However, for the sake of fun and novelty, I will select new stocks for 2025 while continuing to track the performance of these eight.
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My top stock picks for 2025
1. Adobe
Sector: Technology / Country: US
Market cap: $197B
Expected 2025 revenue growth: 9.4% / Expected 2025 EPS growth: 25.6%
PE25e: 28.0x
Net profit margin: 29.7%
Adobe is expected to continue benefiting from AI and monetizing it across its various software offerings. Margins are projected to grow rapidly. The stock is still 30% below its 2021 all-time high (ATH), and the company maintains a robust balance sheet. Here is my full article about Adobe.
2. Adyen
Sector: Financials / Country: Netherlands
Market cap: $47B
Expected 2025 revenue growth: 24.1% / Expected 2025 EPS growth: 22.9%
PE25e: 40.7x
Net profit margin: 44.6%
Adyen’s growth is expected to accelerate in 2025 as the company benefits from its investments and strong commercial momentum. The stock remains 45% below its ATH, and its robust FCF generation will provide strategic options for the future.
3. Applied Materials
Sector: Industrials / Country: USA
Market cap: $133B
Expected 2025 revenue growth: 8.1% / Expected 2025 EPS growth: 6.0%
PE25e: 17.6x
Net profit margin: 25.9%
Applied Materials provides a comprehensive range of equipment for semiconductor manufacturing. The upcoming investment cycle in the semiconductor industry could serve as a strong catalyst for the stock. The current valuation appears reasonable, and the company holds a $3B net cash position.
4. General Dynamics
Sector: Industrials / Country: USA
Market cap: $72B
Expected 2025 revenue growth: 5.8% / Expected 2025 EPS growth: 14.0%
PE25e: 16.5x
Net profit margin: 8.6%
Geopolitical tensions are expected to remain high in 2025. General Dynamics presents an interesting opportunity with a reasonable valuation, steady growth, improving margins, and a strong focus on innovation.
5. KLA Corporation
Sector: Industrials / Country: USA
Market cap: $84B
Expected 2025 revenue growth: 18.3% / Expected 2025 EPS growth: 41.3%
PE25e: 21.7x
Net profit margin: 33.6%
With a 55% market share in semiconductor production line control equipment, the company should to benefit from two tailwinds: the investment cycle in the semiconductor sector and the increasing importance of inspection equipment in the overall manufacturing process. Services are growing faster than the top line, enhancing the recurring revenue stream. Margin should also increase.
6. Mercadolibre
Sector: Consumer discretionary - Financials / Country: Argentina
Market cap: $87B
Expected 2025 revenue growth: 23.6% / Expected 2025 EPS growth: 38.3%
PE25e: 37.4x
Net profit margin: 9.2%
Poised to benefit from growth in South America, the company is expected to sustain strong growth while simultaneously increasing its net profit margin. The current valuation is approximately the same as in 2021.
7. Merck&Co
Sector: Healthcare / Country: USA
Market cap: $248B
Expected 2025 revenue growth: 5.5% / Expected 2025 EPS growth: 24.3%
PE25e: 11.1x
Net profit margin: 32.7%
While the expiration of the Keytruda patent is a major concern for investors, the company remains an appealing choice in the healthcare sector. It has strong margins, steady growth, and diversified revenue streams, including its animal health division. If 2025 proves to be a volatile year, Merck&Co could serve as a safe haven for investors.
8. Paxman
Sector: Healthcare / Country: Sweden
Market cap: $0.1B
Expected 2025 revenue growth: 26.9% / Expected 2025 EPS growth: 76.9%
PE25e: 18.1x
Net profit margin: 21.2%
This Swedish micro-cap is particularly interesting as it transitions its business model from selling equipment (scalp cooling systems to prevent hair loss during cancer treatment) to a per-treatment billing model. Revenue is expected to see significant growth, though primarily starting in 2026. The anticipated 77% margin increase precedes this surge, as the company has received CPT Category I codes from the American Medical Association, marking a major step forward in the US reimbursement process. Here is my full article about Paxman.
9. Shift4 Payments
Sector: Financials / Country: USA
Market cap: $7B
Expected 2025 revenue growth: 29.8% / Expected 2025 EPS growth: 41.9%
PE25e: 32.3x
Net profit margin: 6.4%
Shift4 Payments is expected to maintain strong growth in 2025, with acquisitions likely to continue. The valuation remains reasonable given this potential. Here is my full article about Shift4 Payments.
10. PDD
Sector: Consumer discretionary - Technology / Country: China
Market cap: $138B
Expected 2025 revenue growth: 25.9% / Expected 2025 EPS growth: 13.7%
PE25e: 8.4x
Net profit margin: 25.5%
With its diverse divisions and asset-light business model, PDD can be challenging for investors to fully understand. Of course, the main risk is that it is a China-based company. However, the Chinese market may reach its bottom in 2025, with an agreement with Donald Trump at the same time. This could serve as a strong catalyst for the stock, which has an incredibly low PE despite its growth, cash position, and profit margin.
11. Transmedics
Sector: Healthcare / Country: USA
Market cap: $2B
Expected 2025 revenue growth: 21.7% / Expected 2025 EPS growth: 41.2%
PE25e: 44.5x
Net profit margin: 9.3%
2024 has been a rollercoaster for the company. Sentiment shifted quickly, and we clearly saw a bubble pattern. Now that we are nearing the end of this pattern, the company still offers strong fundamentals with a much more reasonable valuation (even if it could go lower).
12. Uber
Sector: Technology / Country: USA
Market cap: $128B
Expected 2025 revenue growth: 15.7% / Expected 2025 EPS growth: 25.4%
PE25e: 26.3x
Net profit margin: 9.8%
Uber has transformed itself from a cash-burning machine into a major free cash flow (FCF) generator. This trend is expected to continue as the company increases its profit margins.
Synthesis
This year, I will track the performance of these 12 picks, alongside the 8 from 2024. The investment theses are clear:
Growth will also come from outside the US – MercadoLibre, PDD
Volatility and geopolitical tensions will be central to 2025 – Merck&Co, General Dynamics
The semiconductor investment cycle will improve – Applied Materials, KLA Corporation
Payments offer visibility and quality – Adyen, Shift4 Payments
Software could be the big winner of AI – Adobe, Uber
Innovation drives value creation – TransMedics, Paxman
What are your top picks for 2025? Share them in the comments section.
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Long KLAC.
Appreciate all your effort, and there is definately some food for thought in your report. Personally, I will stick with GRAB for 2025.