3 Tech Stocks to Propel Your Portfolio in 2025 and Beyond

The technology sector had an impressive year in 2024, and it's not slowing down. With solid financial health and exciting growth prospects, three notable tech companies are expected to continue thriving as we move into 2025.

In 2024, technology emerged as one of the most vibrant sectors on Wall Street. The rapid expansion of emerging markets like artificial intelligence (AI) contributed significantly to this growth. Now, as we approach 2025, investors are looking for stocks that can sustain this momentum.

After careful analysis, three prominent tech stocks stand out as strong contenders for growth in 2025 and beyond: Broadcom (AVGO), Qualcomm (QCOM), and Meta Platforms (META). These companies have long histories of delivering impressive returns, and here's why they may continue to excel.

Broadcom's Strong Finish Sets the Stage for Future Growth

Justin Pope (Broadcom): Heading into 2025, Broadcom looks very promising, especially after a stellar performance that saw its stock price soar over 95% since the beginning of the year. The company recently wrapped up its fiscal year 2024 with remarkable results, signaling a solid foundation for future gains.

In fiscal 2024, Broadcom reported revenues of $51.5 billion, representing a 44% increase from 2023. Originally focused on semiconductors, the company has successfully branched out into enterprise software, particularly infrastructure and security solutions. A significant acquisition last year was VMware, which cost Broadcom $69 billion and helped boost its software revenue by an impressive 181% in 2024. Currently, about 60% of its revenue comes from semiconductors, while 40% is generated through software.

Although semiconductor revenue rose to over $30 billion in 2024, it increased by only 7% year-over-year. Nevertheless, the AI sector presents a thrilling opportunity for Broadcom. They've begun collaborating with the AI firm OpenAI and are reportedly developing an AI chip for Apple's data centers.

This strategic focus on AI has proven fruitful, as evidenced by a remarkable 220% growth in AI-related revenue, reaching $12.1 billion in 2024. With a stock trading at a price-to-earnings ratio of 29 based on 2025 earnings estimates, analysts predict that Broadcom's earnings will compound at a growth rate of around 20% over the long haul. These factors indicate that Broadcom is well-positioned for continued success.

Qualcomm: Diversifying for a Comeback

Will Healy (Qualcomm): At first glance, Qualcomm might not appear to be a winning stock, especially as it faced challenges throughout 2024 due to slowing growth associated with 5G. Plus, the prospect of Apple introducing its own smartphone chipset by 2027 raises concerns about Qualcomm's future revenues.

The potential loss of Apple's business could significantly impact Qualcomm, considering that its handset segment accounts for 64% of total revenue. However, the company has proactively diversified its operations, venturing into internet of things (IoT) and automotive sectors, with automotive revenue increasing by an impressive 55% in fiscal 2024.

Qualcomm also launched PC chips this year, with its Snapdragon X Elite chips demonstrating superior performance compared to Apple's M2 chip in several aspects. Furthermore, if rumors of a potential acquisition of Intel prove accurate, Qualcomm's standing in the chip industry could strengthen considerably.

Despite its challenges, Qualcomm's stock has appreciated by 20% over the past year, even after experiencing a dip of over 30% from its peak in June. The current price-to-earnings ratio is now at 18, which is notably lower than many industry peers. Thus, while uncertainties remain regarding Apple's potential shift away from Qualcomm, the latter's expansion into automotive, PC, and other markets makes it an attractive buy at its current valuation.

Meta Platforms: A Stock Worth Watching

Jake Lerch (Meta Platforms): Meta has been performing exceptionally well for some time now. Since its public debut in 2012, the company's shares have delivered a compound annual growth rate (CAGR) of 24.8%, nearly double that of the S&P 500's 15.2%. Particularly notable is Meta's performance in 2024, with its stock surging 75% year-to-date, outpacing the S&P 500's 28% return.

Investors should focus not only on Meta's historical success but also on its significant cash flow generation. Over the last year, the company reported revenues of $156 billion, positioning it as the 22nd largest American corporation by revenue. More impressively, Meta generated over $52 billion in free cash flow.

This strong cash position allows Meta to deliver value to its shareholders through various methods, such as share repurchases, debt repayment, strategic acquisitions, and dividend payments. For instance, in February, Meta announced a $50 billion share buyback plan and introduced its first quarterly dividend.

Overall, investors looking for a robust long-term growth stock should certainly consider adding Meta to their portfolios.

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 board of directors of the company mentioned. Jake Lerch has positions in Nvidia. Justin Pope has no position in any of the stocks. Will Healy has positions in Intel and Qualcomm. The disclosure policy applies to all mentioned companies.

technology, investing, stocks