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Pinpointing stocks that can double in a year is difficult. These stocks are usually undervalued and need a significant news story to boost them. However, there are three stocks that have the potential to double in 2025 if everything goes right.
The three stocks are Super Micro Computer (NASDAQ: SMCI), PayPal (NASDAQ: PYPL), and MercadoLibre (NASDAQ: MELI). While there's no guarantee these stocks will double, all three have significant upside.
Super Micro Computer
Super Micro Computer took investors for a massive roller-coaster ride in 2024. It started the year off hot, rising more than 300% in three months, but then had a tumultuous nine months following that, as it was accused of accounting fraud. Toward the back half of the year, an independent auditor found no wrongdoing by the company, which puts it back on the table as a potential investment.
Supermicro (as it's often called) makes parts for servers in data centers and sells fully assembled servers. Supermicro's are the best in the business, as they offer liquid-cooled racks, which are critical in keeping energy-hungry GPUs cool. Liquid-cooled racks may cost more up front, but they compensate for it over the long term with cooling cost savings.
There is still a huge demand for computing power, so many trends propelling Supermicro higher in 2024 still exist today. While finalized quarterly earnings that would fully clear Supermicro have not yet been submitted to the Securities and Exchange Commission (SEC), those should be coming once its new accounting firm is fully up to speed.
However, the stock is dirt cheap, thanks to many investors being scared of it due to the allegations.
Its forward price-to-earnings multiple of 11.7 is a bargain, and this stock could double based on valuation alone in 2025.
PayPal
PayPal is a well-known fintech company that lost its way over the past few years. However, under the leadership of CEO Alex Chriss (who's been on the job for just over a year), PayPal has revitalized itself and is starting to gain some momentum.
Active accounts rose by 1% in the third quarter, which is a huge improvement from PayPal's decline over the past few years. Furthermore, its transaction margin has started to rise, indicating PayPal is becoming more profitable.
These catalysts could accelerate in 2025, leading to a PayPal that starts to see measurable growth again, as it's currently growing revenue at a fairly mundane 6% pace. However, PayPal is still a cash-flow machine, and PayPal is using those streams to repurchase shares for cheap. Over the past year, PayPal reduced its share count by 6.5%, which provides a strong boost on the earnings-per-share (EPS) front.