There’s not much time to finish your stock buys and sells before 2024 comes to a close. Undoubtedly, it’s been an incredible year for stock investors, but the good times may not be over just yet as the AI revolution looks to hit the accelerator on its monetization potential. While there’s not much time to get your last-minute buys in, I still think the following names are worth owning for the new year and beyond. So, in no particular order, here are two names I consider to be among my top picks for 2025:
Apple
Apple (NASDAQ:AAPL | AAPL Price Prediction) is a company that people just love to doubt. The stock started 2024 with a pretty expensive multiple, only to end the year with an even pricier one (shares go for almost 42 times trailing price-to-earnings (P/E)). After gaining around 37% on the year, I’m sure the profit-takers will be even more inclined to jump ship. After all, Warren Buffett has been an active seller of the stock in 2024, and there are no signs that he’s finished taking profits off the table of the iPhone maker.
Despite the frothy price of admission at more than $255 per share, I continue to view AAPL stock as one of the best of the Magnificent Seven to own for the new year. Why? Two words: Apple Intelligence. The latest iOS 18.2 with new Apple Intelligence features may have underwhelmed thus far (Genmoji and Image Playgrounds alongside ChatGPT are fine additions, but nothing jaw-dropping), but it’s important to note that it’s just the first step of many that could make Apple the king of personalized AI.
Personally, I thought iOS 18.2 was solid but far from perfect. Perhaps expectations were way too high prior to the big launch. After all, a sophisticated and truly personalized AI in your phone, like in the film Her, is going to take more than just one update. Indeed, it’ll probably take a few big releases and a few years before Apple Intelligence is on that level. Perhaps iOS 21 in 2027 could be closer to that kind of intimate AI.
Either way, Apple is well on its way to building “AI for the rest of us,” with security and safety at the top of mind. Personally, I think Apple’s careful approach to AI will lead to the greatest gains over the long run.
Why take on excess risk by putting one’s own large language model (LLM) out there when it’s not yet 100% polished when you can do incremental upgrades over time, inducing a steady stream of device upgrades while granting more time to think about safety? Sure, it would be nice to have a profoundly powerful AI right now, but the fact of the matter is that these technologies take time to refine. If you’re a long-term investor, I’d argue AAPL stock remains a great way to bet on AI for the everyday consumer.
Amazon
Amazon (NASDAQ:AMZN) is another AI frontrunner that could make noise in 2025. Shares of the e-commerce giant are actually a top internet pick over at Citi despite gaining nearly 50% in 2024. Why’s that? The company’s big bets to improve delivery speeds could pay off in a big-time way once consumer spending picks up. Additionally, AWS and AI are two major margin drivers that could help power further gains in the new year.
Undoubtedly, Amazon could go from AI underdog to AI frontrunner as it rolls out its offering to consumers via Echo devices. With a $275 price target (implies nearly 24% upside) on AMZN stock, shares look like a bargain as we enter the new year, with the name currently priced at $223 and change after Friday’s post-Christmas pullback.
Beyond its AI-enhanced product offerings, Amazon also has a chance to save big bucks as it aims to cut thousands of manager roles. Reportedly, CEO Andy Jassy wants to up the ratio of contributors to managers by 15% minimum by the second quarter of next year, an effort that could shore up $3 billion.
Indeed, streamlining the corporate structure while focusing on AI-augmented contributors could be the way to go in the latter half of the decade. Add the potential for automation robotics at warehouses to the equation, and I view Amazon as a firm equipped to unlock some pretty substantial margin gains.
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