Investing

3 Tech Stocks to Buy Before Dec. 31st

Chris MacDonald

Published: December 18, 2024 10:04 am

Any investor who has been in the market for the past two decades has mostly benefited from being overweight technology stocks. Aside from some steep declines around key events which shook global markets (the financial crisis and the pandemic being the two most notable examples of how tech companies can decline considerably during downturns), it’s been mostly up and to the right for most major tech stocks.

This trend has been very apparent in recent years, with many top mega-cap tech names continuing to post new record highs, resulting in a gamut of trillion-dollar tech giants investors can now choose from.

Two of the three companies I’m going to highlight on my top ideas list for tech stocks to buy before the end of the year are trillion-dollar giants many are already well aware of. However, the two picks I’m going to highlight are the two stocks I think could have the biggest upside relative to their peers over the coming years. I’ve also included a rather overlooked tech name I think investors may want to pay attention to. Let’s start with that pick first, shall we?

Key Points:

• The past few years have provided very strong returns for investors who have taken a risk-on approach to the markets, with many high-flying tech stocks continuing higher.
• Here are three tech giants I think can have an excellent 2025 and continue to grow for years to come.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Constellation Software (CSU)

Constellation Software (TSX:CSU) is one tech stock I’d argue simply doesn’t get the love it deserves. There are a number of reasons for this, but most notably, I think it’s because this is a Toronto-listed company which currently trades on the pink sheets for U.S. investors under the ticker CNSWF. 

Many investors avoid pink sheet companies, and for good reason. These are typically your high-risk penny stocks, and while there are potential opportunities that arise for some investors outside of major exchanges, companies that choose not to list in the U.S. simply don’t get the same amount of coverage typically without a listing.

That said, I think Constellation Software is a unique company investors may want to hone in on. The company’s business model revolves around acquiring specialty software firms, and integrating them into the company’s portfolio. Given the fragmented nature of the software market, and the thousands of small and mid-sized firms that are out there, Constellation Software has a nearly unlimited number of options to choose from, and its world-class M&A team has done a great job of identifying the best opportunities in the market thus far.

This strategy has paid dividends over the long-term, with a stock chart rivaling many of the best mega-cap tech stocks in the U.S. over the past two decades. This strategy has also led to recent earnings outperformance, with the company beating Q3 expectations, reporting revenue growth of 20% year-over-year to $2.5 billion. Analysts remain bullish on this name, and so do I. 

Microsoft (MSFT)

Microsoft (NASDAQ:MSFT) is an obvious pick for many investors looking for tech stocks to buy before the end of the year, for a wide number of reasons.

For one, Microsoft’s business model revolves around a number of high-margin and steady growth businesses which have fueled world-class cash flow growth over time. The company’s core software business has been complemented by Microsoft’s cloud dominance and increasing investments in artificial intelligence. The company’s Azure cloud segment has been a key profitability and revenue growth driver, holding around one-quarter of the global cloud market. So, for those bullish on the future of cloud technology, Microsoft looks to be about the safest bet in this sector right now.

Additionally, Microsoft continues to outperform expectations, leading to a fundamentals-driven rally in its shares which shows little sign of abating. The company’s most recent Q4 results were strong, with revenue rising 18% to $62.5 billion. This growth was driven by Azure revenue growth of 28% year-over-year and the company’s small-but-growing AI services business surging 165% on a year-over-year basis.

For investors bullish on the future of AI technology, Microsoft’s relatively early-stage bet on OpenAI and its own AI integration efforts make this stock one growth investors will likely continue to salivate over for some time. In my view, Microsoft is one of those buy-and-hold opportunities to pick up during a discount window. And while shares are currently off only 3% from their all-time high at the time of writing, that’s a big enough discount for investors who believe new all-time highs are on the horizon.

Meta Platforms (META)

Last, but certainly not least, we have Meta Platforms (NASDAQ:META) – a company I think could continue to be one of the best-performing stocks in 2025.

The company’s share price has been on an absolute tear following a rather dismal 2022, in which the company’s shares declined considerably as growth slowed and expectations came down for this social media giant. Since then, the company has clearly made efficiency efforts its focus, ramping down spending on various metaverse ambitions (redirecting much of that capital toward AI ambitions) while seeing steady growth from the company’s core social media and advertising businesses thanks to key operational improvements.

A number of other catalyst have certainly aided Meta’s rise, including optimism over a potential TikTok ban, and an intriguingly positive view of how the Trump administration may benefit certain tech stocks (Mark Zuckerberg recently kissed the ring, so we’ll have to see how the company’s past feuds with the former president play out).

However, it’s once again a fundamentals-driven story for meta, which saw its revenue grow 32.5% to $156 billion this past quarter. This growth was driven by ad growth and AI advancements, with most investors clearly focused on the latter factor as being key to the company’s future prospects. Trading around 26-times forward earnings, this stock isn’t cheap. But in terms of quality, Meta remains a top pick tech investors will continue to hone in on for consistent and durable cash flow growth over time. Until something changes on this front, this company remains a top pick of mine for 2025 and beyond.