A new year is less than a month away and investors are thinking about how they want to invest in 2025. Trends can change quickly. Therefore, the most important factor when making a decision on any investment should always be the underlying factor. basics.
If you’re looking for excellent stocks that are also benefiting from strong tailwinds right now, Amazon (NASDAQ: AMZN), SoFi technologies (NASDAQ: SOFI)And Carnival (NYSE: CCL)(NYSE:CUK) would be great choices.
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Amazon is a leader in artificial intelligence (AI) innovation. Since it unveiled its AI technology two years ago, it has stayed at the forefront of the revolution, launching a host of services for Amazon Web Services (AWS) customers and even developing its own graphics processing units (GPUs) to compete with . Nvidia‘S.
Business is flourishing. Not only is the AI business itself already generating billions of dollars in revenue, but the AWS platform is also attracting new customers who want to use Amazon’s AI services. CEO Andy Jassy has emphasized his view that this is just the beginning, noting that 90% of global IT spending still goes to on-premise systems, while 10% goes to the cloud. He expects that these proportions will reverse in the long term. Amazon is positioned to enjoy windfalls if that shift happens.
Amazon uses AI in all its operations, including offering generative AI solutions such as cue-based product descriptions for third-party sellers and data analytics for advertising clients. These services take the entire company to the next level.
It’s not easy for a mega-cap company to achieve double-digit revenue growth, but Amazon continues to show robust growth. It is also very profitable. It offers incredible long-term opportunities, but 2025 could be particularly strong if the AI trend drives this forward.
For SoFi, falling interest rates will be the driving trend. SoFi shares fell for most of this year due to pressure on its core lending activities. But lower interest rates are good for the credit segment, and the rest of the sector is already in fantastic shape.
Several years ago, SoFi developed a strategy to increase engagement through cross- and upselling, and acquired Golden Pacific Bancorp to obtain a banking charter. It now has three business segments: lending, financial services and technology platforms.
The credit segment still accounts for more than half of the company’s total revenue and most of its profits, and growth is accelerating again. Turnover increased by 14% in the third quarter and contribution profit increased by 17%.
Financial services is the standout segment and includes non-lending services such as bank accounts and investments. That unit’s revenue rose 102% year-over-year in the quarter, while contribution profit improved from $3 million to $100 million. Tech platform is a white-label business-to-business platform; revenue rose 14% in the quarter, while contribution profit rose 2%.
On a consolidated basis, SoFi has reported four consecutive quarters of positive net revenues, and management indicates this will continue into 2025. With strong engagement, hundreds of thousands of new customers and now a revived lending business, SoFi stock could be a game changer. standout artist in 2025.
Carnival’s tailwind is lower inflation, although it also benefits from lower interest rates. Carnival has made a huge comeback after shutting down operations for more than a year during the pandemic, but it continues to see unprecedented demand that appears to be more than a recovery.
However, it is still recovering from that break in two crucial ways. It hasn’t had a full year of positive net income since 2019, and it has a huge amount of debt to pay off after taking out loans to stay in business while unable to generate revenue.
Profitability improves. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 25% year over year to $2.8 billion in the third quarter of 2024 ended August 31. Management also raised its expectations. It now expects an adjusted EBITDA increase of 40% for the fiscal year. Operating income rose $554 million to $2.2 billion in the quarter, and the company reported net income of $1.7 billion. Wall Street expects earnings per share of $1.33 for 2024.
As for debt, Carnival still has nearly $30 billion, but has been paying it down efficiently, and lower interest rates should make that process easier. With inflation largely under control, people should have more money to spend on expensive cruise tickets, and Carnival enters 2025 at its best-booked position ever, with more than half of its inventory sold out for the year. We already see these trends continuing in bookings for 2026.
With demand for cruises remaining strong, Carnival is well positioned to achieve a full recovery by 2025, and its stock price should reflect that journey.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil holds positions in SoFi Technologies. The Motley Fool has and recommends positions in Amazon and Nvidia. The Motley Fool recommends Carnival Corp. On. The Motley Fool has a disclosure policy.
These Could Be the Three Best Stocks to Own in 2025, originally published by The Motley Fool
