The essence of Christmas, marked by the Christmas tree adorned with twinkling lights and silver bells, brings joy and warmth to every heart. This emblem of goodwill and love is pivotal in celebrating the season's cheer. Mirroring its significance, we have crafted a tree with some top-ranked stocks that have the potential to outperform in 2025.
Crafting & Decorating the Christmas Tree of Stocks
Let’s build the base first, which is the most valuable part and the place where all gifts are to be found. There’s nothing more fitting than the broad market index — S&P 500 — to give a solid foundation to our tree. The index has enjoyed a historic bullish run, having risen more than 24% in 2024. The AI boom and lower rates have been the major catalysts. Trump’s win in the presidential election provided an additional boost to the stock market, though the Fed’s uncertain rate cut path continued to weigh on investors’ sentiment.
The second Trump administration is expected to boost stocks. Trump's policies on restricting illegal immigration, enacting new tariffs, lowering taxes, and reducing regulations may boost the economy and inflation. The anticipation of greater tariff barriers and a step to move manufacturing back home will drive stocks higher.
Banks are well-positioned to benefit from Trump’s deregulation and lower corporate tax policies. Trump can usher in a “new era” of lighter financial regulation after 15 years of stricter control following the financial crisis of 2008-2009. Additionally, Trump emphasizes energy independence, and his policies are likely to favor fossil fuels, promoting deregulation in the oil, gas, and coal industries. He is in favor of expanding oil exploration, including increased fracking activities.
So, it makes sense to add some top-ranked stocks from these sectors to our Christmas tree. Wells Fargo & Company WFC is one of the largest financial services companies in the United States. The company provides banking, insurance, trust and investments, mortgage banking, investment banking, retail banking, brokerage services and consumer and commercial finance across North America and globally. The stock has a Zacks Rank #2 (Buy) and a Value Score of B.
Gulfport Energy GPOR is an independent natural gas and oil company. It is focused on the exploration and development of natural gas and oil properties in North America. GPOR has a Zacks Rank #2 and a VGM Score of B. These stocks could form the fronds of the tree.
For the top layer, we have chosen PACS Group Inc. PACS. Small-cap stocks are expected to outperform in the New Year, with the economy on track for strong growth. Additionally, a low interest rate and lower taxes and regulations bode well for small-cap stocks as they perk up economic activities, thus boosting domestically focused companies. The stock declined 15.6% last week. However, the recent dip offers a good buying opportunity. PACS has a Zacks Rank #2 and a VGM Score of B. It has an estimated earnings growth rate of 82.3% for 2025.
At the very top is the star S&P 500 stock of 2024 — Palantir Technologies PLTR — which has gained about 360% this year. Palantir builds and deploys software platforms for the intelligence community, principally in the United States. The company has an estimated earnings growth rate of 24% for the next year. It has a Zacks Rank #2 and a Growth Score of A.
With the structure ready, we now have to decorate the tree with bells, candies and lights. While most of the stocks could be part of this beautification, we have chosen those top-ranked stocks that are trending hot in the market. Coinbase Inc COIN will add to the glitter and shine. It is the largest cryptocurrency exchange in the United States in terms of trading volume. COIN has risen about 54% and has a Zacks Rank #1 (Strong Buy), suggesting its outperformance to continue. The prospect for Coinbase looks bright as Bitcoin has been on an unstoppable rally, driven by a wave of optimism driven by President-elect Donald Trump’s support for crypto. You can see the complete list of today’s Zacks #1 Rank stocks here.
The best stock for the candy decor is Zacks-Ranked #2 Tesla TSLA, which has been on a powerful rally, especially after Trump's election victory. After reclaiming the trillion-dollar market cap last month, shares of this electric vehicle maker hit a series of new all-time highs. Tesla shares have risen nearly 72% in the past three months as most analysts are bullish on the stock and have recently raised the price target. Trump’s administration will help expedite regulatory approval of the company's autonomous driving technology. Loosening autonomous driving rules from the incoming Trump administration, the repeal of consumer electric vehicle tax credits and a more profitable low-cost EV versus its peers will benefit Tesla in 2025 and beyond.
Now, to lighten the tree, let’s add NVIDIA Corporation NVDA, which will continue to brighten investors’ portfolios in 2025 due to the ongoing AI boom. The stock soared to incredible heights last month. Although the AI darling has shown some weakness in recent weeks, slipping into correction territory (down 10% from its recent peak), it is still up more than 180% this year. Most analysts believe NVIDIA will become far more valuable in the future due to its dominance in the billion-dollar AI chip market. NVDA currently has a Zacks Rank #2 and a Growth Score of A.
The Christmas tree of stocks to brighten 2025 is now ready for investors. May it spread cheer!
Zacks Naming Top 10 Stocks for 2025
Want to be tipped off early to our 10 top picks for the entirety of 2025?
History suggests their performance could be sensational.
From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>Wells Fargo & Company (WFC) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Gulfport Energy Corporation (GPOR) : Free Stock Analysis Report
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
PACS Group, Inc. (PACS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
