A new year is upon us, and 2025 is sure to serve up all kinds of twists and turns. But while no one knows exactly what the future may bring, backing strong companies that operate in growth markets remains a great path to long-term enrichment.
For investors who back the right companies and hold steady through volatility, it's possible to secure life-changing returns. If you're looking for growth stocks to buy that can strengthen your long-term financial future, read on to see why two fool.com contributors think these innovative companies present great investment opportunities right now.
A rebounding lending business plus more
Jennifer Saibil (SoFi): It was looking iffy for a while, but SoFi(NASDAQ: SOFI) stock ended the year up 57%. That was after more than doubling in 2023, and SoFi is likely to keep rewarding investors in 2025.
Investors may be excited about SoFi's upcoming fourth-quarter report because it's expected to be the fifth straight quarter of positive net income, and it will mark the company's first full year of positive net income. It has come in ahead of expectations for earnings per share (EPS) for the past four quarters, and if it beats in the fourth quarter, that should be reflected in the stock.
It's also benefiting from lower interest rates, both in its business and its stock price. Loans, and specifically student loans, are its core product. Higher interest rates led to a pressured business in 2024, with lower revenue growth, including a quarter with a small decline. Profit from the lending business was also being squeezed, and since this business is responsible for most of the company's total profit, the market was less enthused with what should have been exciting updates about positive net income.
With the Federal Reserve's interest rate cuts in September, plus SoFi's update in the third quarter that the lending business would be much better than expected for the full year, the market has become much more enthusiastic about SoFi's prospects this year. If it beats on EPS and comes through on lending revenue, expect the stock to jump.
It has expanded into a broad assortment of financial services, though, and that's contributing to growth in other ways, protecting the whole business and boding well for the future. It offers a full financial services app that's all digital, as well as a white-label financial platform for business clients, and these segments are growing quickly.
You can't time the market, and if you have a long-term outlook, it doesn't matter if you buy today or tomorrow. But as SoFi's story gets better and better, investors who are still on the fence have more to gain by buying in as soon as they can.
This tech giant can still deliver huge wins for long-term investors
Keith Noonan (Amazon): Amazon(NASDAQ: AMZN) is the world's largest e-commerce company. It's also the world's largest provider of cloud infrastructure services. But while e-commerce accounts for the overall majority of its revenue, it's the Amazon Web Services (AWS) cloud infrastructure business that generates the majority of the profit.
E-commerce is a highly cost-intensive and relatively low-margin business. Meanwhile, the AWS segment serves up great margin and is enormously profitable. It's also the segment best poised to see strong artificial intelligence (AI) tailwinds in the near term.
With the AI revolution still in the relatively early innings, it seems to be a safe bet that demand in the category will continue to power strong growth for AWS. Over time, the company's cloud business should come to account for a larger portion of overall revenue.
Amazon's strength in the online-retail market has also opened up another, far more profitable business for the company -- digital advertising. Thanks to the strength of its e-commerce business, Amazon owns premier real estate when it comes to the online attention economy. It operates a platform that plays a bigger role in online purchases than any other platform or service. As a result, the company has been able to command incredible strength with its digital advertising unit.
Despite still being a relatively young venture for Amazon, the digital ads business has scaled at an incredible pace and is now second to only Alphabet and Meta Platforms in terms of global digital advertising revenue. Like its cloud business, the digital advertising unit also commands fantastic margin.
But while Amazon's cloud and digital advertising businesses are currently the stars of the show when it comes to margin, it would be a mistake to underestimate the long-term profit potential of its massive e-commerce business. The long-term expansion outlook for the online retail still looks very promising, and there's a very good chance that a combination of robotics and AI will power automation that substantially improves margin.
With strong positions in three growth industries and strong potential for continued sales and margin expansion, Amazon stock is a great buy for 2025.
Should you invest $1,000 in SoFi Technologies right now?
Before you buy stock in SoFi Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $847,637!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in SoFi Technologies. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.
