Investing

This Feels Like the Post-Pandemic Rally. 3 Stocks to Buy If It Is

Chris MacDonald

Published: December 18, 2024 11:13 am

The incredible returns equity investors have seen in 2024, and over the past couple months for that matter, have been incredible. This period of time really reminds me of the post-pandemic rally we saw when interest rates were dropped to near-zero levels, and stocks benefited from a long-term discount rate which was greatly reduced.

However, the most impressive things about this more recent rally (or at least one of the most impressive things) has been the fact that stocks have continued to tear higher despite much higher interest rates. Bond yields remain elevated, and while some Wall Street analysts are calling for a more measured return profile in 2025, there are plenty of market bulls who believe that next year will bring about similar returns to what we’ve seen thus far in 2024.

In my view, that might be a bit too bullish. I think even the most enthusiastic investors out there may concede that some amount of future demand has been pulled forward by current valuations, given that they’re historically high.

That said, if we are headed into another year which looks a lot like 2023 or 2024, here are three stocks I think investors may want to keep an eye on here.

Key Points About This Article:

• The past two years has started to feel a lot more like the post-pandemic hype-driven market when every stock seemed to find a reason to head higher on hopes and dreams.
• However, for those who believe that returns are likely to be strong but want some level of stability, these three stocks may be solid bets for 2025.
• 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.

Eli Lilly (LLY)

Eli Lilly (NYSE:LLY) has seen its stock absolutely rip higher in 2024, with LLY stock rising 62% over the first nine months of 2024 alone. As most investors may already be well aware, the company’s status as a leading GLP-1 provider has driven most of this growth. And by all accounts, these drugs are certainly life-changing for millions of Americans, and have actually been credited with lowering the obesity rate in the U.S. for the first time in a generation.

That’s certainly a good thing. And what’s good news for Eli Lilly investors is that what’s good for society also happens to be very good for this company, with strong earnings growth driving fundamental upside in this stock and a valuation of roughly $700 billion at the time of writing.

Now, the stock has seen some volatility of late, with shares of LLY stock down around 20% from their 52-week high following Q3 earnings fell short of Wall Street expectations. The company’s revenue missed targets and its full year guidance was lowered, leading to this underperformance in recent months. But with strong secular growth catalysts underpinning the company’s earlier first half growth, I think this is a stock that could rebound in a big way, particularly if investors jump aboard the company’s capital allocation plans and focus more on its drug pipeline, which includes key drugs such as an Alzheimer’s drug which was recently approved by the FDA.

There are plenty of catalysts here for big upside ahead, and this is a stock I’m watching closely in 2025.

Moderna (MRNA)

Moderna (NASDAQ:MRNA) is best-known as a top pharma stock that boomed during the pandemic thanks to its mRNA-based COVID-19 vaccine Spikevax. However, the company has since focused on expanding its pipeline to include respiratory diseases and cancer therapies. The thinking many Moderna investors have is that the mRNA delivery mechanism for its vaccines could portend well to an array of drugs. Thus, it’s the underlying technology Moderna provides, in addition to the green light regulators have given the company for key drugs, that could spell big growth over the long-term. 

Moderna stock is down considerably over the past year, losing around 40% of its value in a year many stocks have increased by that same amount. So, this may be a surprising pick to have on a list of stocks to watch in 2025.

But if the company does announce some key new drugs (with some recent commentary leading bulls to ramp up bets on the company), and bullish fervor returns to the big pharmaceutical sector, this is a stock I think could see a similar pandemic-like move higher.

It’s understandable that we haven’t seen the same amount of interest in big pharma stocks this time around – we don’t have a pandemic to contend with right now. That said, Moderna is a company I think of as being one big catalyst away from a big move higher. Indeed, 2025 could be the year for this stock, we’ll see.

Broadcom (AVGO)

Broadcom Inc. (NASDAQ:AVGO) is among the leading semiconductor makers that’s been on an absolute tear of late. The company’s stock price is up more than 110% on a year-to-date basis, with much of this move coming in recent weeks. Much of this has to do with the company’s recent Q4 results, which blew most analysts and investors expectations out of the water. ‘

The chip maker saw its Q4 revenue rise more than 50% year-over-year, an dits net income also surged 22.7% as the company benefited from its VMware acquisition and also strong AI-related growth.

Artificial intelligence remains the key growth driver so many investors are focused on right now. But in the chips space, this is certainly the key factor investors are honing in on, as higher spending on greater compute to power future AI applications is what’s driving the valuations higher for so many companies in this sector.

With a number of analysts raising their price targets on Broadcom following its results, with some increasing their targets above $250 per share (right around where this stock is trading now), it’s clear that a game of catch up may be underway. We’ll have to see, but I’d fashion a guess that we’ll see more upgrades incoming as this stock continues to take off on even better results in the quarters to come.