As we move through 2025, many investors are hopeful that the Federal Reserve will keep cutting key interest rates.
After all, the Fed members finally made their first cut in over two years in September 2024. In doing so, the Fed removed a major uncertainty that had been hanging over the markets the last couple years… and the markets responded with a rally.
Now, the good news is that if the Fed continues to cut rates, it will only add fuel to the fire. But regardless of whether the markets are rallying or not, all investors should be focused on building a portfolio that can profit during any environment.
All you need to do is invest in companies with strong fundamentals that are also backed by institutional buying pressure. Think of this as “following the money.” The more money that floods into a stock, the more momentum a stock has to rise.
There’s no doubt about it. We all like stocks that rise!
These are the stocks I consider fundamentally superior.
Historically, fundamentally superior growth stocks and dividend stocks are your best bets in times of economic uncertainty. They will “zig” when the market “zags,” setting up your portfolio for profits. They also bounce back faster during bouts of broader market volatility.
Of course, with thousands of stocks to choose from, it’s hard to figure out which are worth investing in.
So, in this report, I’m going to show you five companies that have emerged as the stock market’s crème de la crème of 2025.
With strong sales growth and profits ahead – and big money behind them – these stocks are must-haves for your portfolio as we navigate our way through the year…
Top Stock for 2025 No. 1: The Discount Retailer That Sells Gold Bars
Our first Top Stock for 2025 got its start in 1983, with its first warehouse-style store opening in Seattle.
Today, it continues to expand far beyond its Pacific Northwest roots. The company boasts roughly 600 locations in 47 states and Puerto Rico, as well as 108 locations in Canada, 40 in Mexico, 33 in Japan and 29 in the United Kingdom. The company also has locations in Australia, China, France, Iceland, Korea, New Zealand, Sweden and Taiwan.
With over 132 million cardholders, Costco Wholesale Corp. (COST) provides its members a wide selection of products, including groceries, appliances, televisions, automotive supplies, hardware, jewelry, books, household goods, apparel, health and beauty, furniture and more.
The company also operates self-service gas stations and has become a major gasoline retailer. So, it’s important to note that same-store sales can be impacted by prices at the pump.
Interestingly, as Costco has grown in popularity, it has attracted wealthy clients, too. That’s why the company now offers luxury items like Screaming Eagle wine for $3,700 per 750-milliliter bottle at several of its California stores.
Heck, Costco sells gold bars, both online and in stores. This has proved to be a boon, as analysts estimate they’re selling between $100 million and $200 million in gold bars each month.
I also want to note that Costco is one of two picks you’ll find in this report that I see as the safest growth stocks of 2025 (and beyond). The company’s outlook strengthens my thesis…
For its fiscal year 2025, analysts expect earnings of $17.83 per share and revenue of $273.23 billion, which would top last year’s earnings of $17.83 per share by 7.7% and revenue of $273.23 million by 7.4%.
Top Stock for 2025 No. 2: Bringing AI to Healthcare
Over the past 147 years, our next Top Stock for 2025 has developed approximately 100 drugs. Yet it never rests on its laurels, as it continues to research and develop new treatments to improve the lives of patients.
It’s one of two companies that has a lock on diabetes treatments and weight-loss drugs. The pharmaceutical company’s two most popular treatments – Zepbound for weight loss and Mounjaro for Type 2 diabetes – have both received approval from the U.S. Food and Drug Administration.
The company continues to experience unrelenting demand for its diabetes and weight-loss treatments. In order to keep up, it plans to invest heavily in manufacturing and supply capacity.
Aside from its weight-loss and diabetes treatments, Eli Lilly and Co. (LLY) has more than 100 drugs in its pipeline. And its efforts, coupled with robust demand for its treatments, keep adding to the company’s top and bottom lines.
Most recently, in September 2024, Lilly received FDA approval for Ebgylss, the company’s treatment for moderate to severe atopic dermatitis, or eczema. The treatment was approved for adults and children 12 and up who haven’t been able to control the skin disease with topical treatments.
Meanwhile, the next frontier for Lilly is AI. Lilly is experimenting with using generative AI to create molecules for drug discovery. The work is still in its early stages but promises to do in five minutes what would normally take researchers an entire year in a traditional lab setting.
To that end, Lilly recently announced a partnership with OpenAI in order to utilize that company’s generative AI to develop antimicrobials for the treatment of drug-related pathogens. Company management noted antimicrobial resistance is an “overlooked threat,” and its partnership with OpenAI illustrates Lilly’s “commitment to addressing significant health challenges experienced by people around the world.”
Looking to the numbers, analysts are calling for earnings of $13.43 per share and revenue of $46.22 billion for the current fiscal year. That represents a 112.5% rise in earnings from $6.32 per share and a 35.5% increase from revenue of $34.12 billion in the last fiscal year.
Top Stock for 2025 No. 3: “Hotter Than Hot”
My third Top Stock for 2025 invented the graphic processing unit (GPU) back in 1999. From video games to professional visualization, data center and automotive applications, this company’s GPUs enhance the processing capability for its users’ computers.
Today, it employs more than 4 million developers who create thousands of applications for advanced computing. It owns a portfolio of more than 8,000 active patents, which is the largest portfolio of its kind. So, it’s no surprise that this company’s technologies have been put to work by more than 40,000 companies, including 15,000 startups, since its founding 24 years ago.
But NVIDIA Corporation (NVDA) refuses to rest on its laurels. The Silicon Valley-based company continues to innovate, and since 2014, it has shifted its focus to five major markets – gaming, professional visualization, data centers, auto and artificial intelligence.
It’s this last segment that is responsible for NVIDIA’s recent booming success.
The company created the Hopper H100 graphic processing unit (GPU), which was wildly popular. But now, the company is making the transition to its new AI chip, the Blackwell GB200 GPU. The Blackwell chips enable generative AI, which NVIDIA calls the “defining technology of our time.” So, the company expects its Blackwell chips will “power this new industrial revolution,” as it provides AI for all industries.
These Blackwell chips are already in hot demand, with companies like Microsoft, Meta Platforms and OpenAI as customers. Additionally, according to some analysts at Morgan Stanley, NVIDIA’s Blackwell is already sold out for the next 12 months.
NVIDIA also making another huge shift. For decades, it has focused solely on microchips. But more recently, data centers have quietly become a larger and larger share of its revenue. For example, in the company’s second quarter in fiscal year 2025, data center revenue hit $26.3 billion – a new quarterly record.
I should also add that NVIDIA CEO Jensen Huang doesn’t even consider them as AI data centers. He calls these hyperscale data centers “AI Factories.”
NVIDIA CEO Jensen Huang
The hyperscale data center industry is worth nearly $50 billion a year, and it’s expected to grow 20% year-over-year for the next decade.
Huang expects $1 trillion to be spent on these AI data centers, with Amazon, Alphabet, Microsoft and Meta accounting for almost all of that spending.
NVIDIA has been and continues to be at the forefront of the AI movement. In fact, NVIDIA dominates the AI chips that are used in everything from data analytics and autonomous vehicles, to data centers and supercomputers to medical devices and cybersecurity. The opportunities are virtually endless!
So, in my opinion, AI is hotter than hot – and given its strong earnings and sales, NVIDIA is the clear leader.
For fiscal 2025, analysts expect earnings of $2.84 per share on revenue of $125.66 billion, up 138.7% from earnings of $1.19 per share and 125.6% from revenue of $55.71 billion a year ago.
Top Stock for 2025 No. 4: Finding and Transporting Natural Gas
Operating in some of the most lucrative natural gas basins in the U.S., our next Top Stock for 2025 is involved in the entire natural gas process.
Targa Resources Corporation (TRGP) gathers, compresses, processes and sells natural gas, as well as offers transportation and storage services for natural gas and natural gas liquids (NGLs).
And its operations are run through two main businesses.
Gathering & Processing: Targa Resources seeks out new supplies of natural gas and crude oil in strategic areas across the U.S., including the Anadarko Basin, Ardmore Basin, Arkoma Basin, Bakken Shale, Barnett Shale, Eagle Ford Shale, Permian Basin and Three Forks. The company also has operations on the Gulf Coast of Louisiana and the Gulf of Mexico. Through this business, Targa Resources also operates 28,400 miles of natural gas pipelines and 42 processing plants.
Logistics & Transportation: Targa Resources “downstream business” focuses primarily on transporting and converting mixed NGLs into NGL products. The company utilizes its Gran Prix NGL Pipeline, as well as 2,100 miles of pipeline to move the mixed NGLs. Through these pipelines, terminals and other transportation assets, Targa Resources markets its products throughout the U.S. The company also has 34 storage wells and boasts a leading position in the NGL hub in Mont Belvieu, Texas.
Currently, the company operates more than 31,000 miles of natural gas pipelines and 53 processing plants, which service top natural gas and crude oil producing basins in the U.S. Targa Resources also utilizes the Grand Prix NGL Pipeline to transport mixed NGLs, as well as 34 storage wells and terminals.
Turning to the financials, for full-year 2025, analysts are expecting earnings of $7.88 per share on revenue of $21.9 billion, up 38.5% from earnings of $5.69 per share and 18.5% from revenue of $18.48 billion in 2024.
Top Stock No. 5: Texas-Sized Power
This company had the foundation of its business laid more than 140 years ago, back in 1882, when the first electric lights were installed in Dallas.
Today, this Irving, Texas-based company (still well within the Dallas area) is one of the biggest power generators in the United States, with about 37,000 megawatts of power generated from natural gas, nuclear, solar and battery storage facilities. The company offers reliable and efficient power solutions to approximately 4 million customers – residential, commercial and industrial – in 20 states, as well as Washington, D.C.
Vistra Corp. (VST) also dabbles in renewable energy. And when I say “dabble,” I mean the company has more than 50 renewable energy plants. I should also add that Vistra has a 750-megawatt (3,000-megawatt-hour) battery storage system in California, which is the largest in the world.
This past year, Vistra announced its collaboration with Sunrun, Inc. (RUN) to develop a new program for homeowners to boost the electric grid in Texas. Sunrun operates more than 12 power plants throughout the U.S., including a big virtual power plant program. The two companies plan to create the TXU Energy & Sunrun Battery Rewards program that will combine power in residential, solar-connected batteries to create another virtual power plant that sends energy back to the grid when necessary.
I should note that in March 2024, Vistra completed a previously announced $3.4 billion deal to acquire Energy Harbor, making Vistra the second-largest nuclear power provider in the U.S. The company also owns the Moss Landing Power Plant in California, which contains the largest battery energy storage system in the world.
For the current fiscal year, analysts expect earnings of $4.60 per share on revenue of $17.12 billion, up 28.5% from earnings of $3.58 per share and 15.9% from revenue of $14.78 billion in fiscal 2023.
There’s Always a Bull Market Somewhere
There’s always a bull market somewhere – and right now the bulls are piling into fundamentally superior stocks.
The five top stocks we discussed today fit this description to a “T” and are great bets for your money in 2025.
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Sincerely,
Louis Navellier
Editor, Market 360
