The stock market performed well in 2024 despite lingering economic issues and geopolitical instability. The bull run remains in full swing, and although investors can't predict what will happen in 2025, it is still worth investing in stocks. Even if equities drop next year, robust companies will survive and thrive long after. Those are the kind investors with a long-term mindset should try to find.
And in that spirit, let's consider two excellent stocks that look like rock-solid options to hold onto well beyond next year: Alphabet (GOOG 0.06%) (GOOGL -0.01%) and Veeva Systems (VEEV 0.35%).
1. Alphabet
Alphabet's shares are up by 25% this year. That's barely below the S&P 500, which is impressive considering the company is facing serious antitrust litigation and a recent loss in an important case. The U.S. Department of Justice (DOJ) now wants to make the company sell its famous Chrome browser. That could have far-reaching repercussions for Alphabet's business.
However, this story is far from over. Alphabet will continue to fight the DOJ's attempts. In the meantime, the company's performance remains solid.
Alphabet's core advertising business is among the best in the world, and the company boasts several high-growth opportunities, including video streaming and cloud computing. In the third quarter, Alphabet's revenue increased by 15% year over year to $88.3 billion. The company's earnings per share (EPS) grew by 37% year over year to $2.12.
Alphabet has used artificial intelligence (AI) to improve its search engine and its algorithm on YouTube in charge of recommendations. It also offers a range of AI-related services through Google Cloud and is implementing various AI solutions throughout the range of its services to decrease expenses.
In other words, Alphabet AI initiatives are helping drive revenue growth and reduce costs. That's good for any business. Alphabet could benefit from the growth of AI and cloud computing for years, especially considering the company's competitive edge.
Google has a network effect: More searches allow the company to collect more data to improve its engine, which leads to better results and more searches. And the cycle continues. YouTube benefits from a similar dynamic. Streaming has a long growth runway, too, and YouTube is one of the industry's leaders.
Alphabet has the tools to perform well in the long run, including strong financial results, a competitive advantage, multiple growth paths, and innovative abilities (let's not forget about its self-driving car business).
The DOJ's plans to break up Alphabet are concerning, but that case could drag on for many years, and there is no guarantee the government will get its way. In the meantime, a company as successful as Alphabet, which generates tens of billions in free cash flow every year, will almost certainly plan to get around this worst-case scenario.
GOOG Free Cash Flow (Quarterly) data by YCharts
So, Alphabet remains a top stock to buy and hold well beyond next year.
2. Veeva Systems
Veeva Systems provides cloud-related services to companies in the life sciences industry. This specialization sets Veeva Systems apart from most cloud providers. While the company isn't as large as Alphabet or several other cloud computing leaders, catering specifically to life sciences companies allows it to carve out a niche for itself. Veeva Systems' services are built with the unique demands of biotechs and others in the industry in mind.
Those demands include a stringent regulatory environment, significant initial investment to develop products with no certainty of future success, the need to collect critical data across the product development cycle, and more. Veeva Systems has attracted some of the largest drugmakers in the world, including Eli Lilly and Novo Nordisk. And despite a slowdown in the cloud computing market a couple of years ago, Veeva Systems' financial results have recovered.
In the third quarter of its fiscal year 2025, ended Oct. 31, Veeva Systems' revenue increased by 13% year over year to $699.2 million. The company's adjusted EPS was $1.75, almost 31% higher than the year-ago period.
Veeva Systems' growth prospects still look attractive. For one, the company benefits from switching costs. That's often true of cloud providers, but for many of Veeva Systems' customers, there is more at stake than disruptions to their day-to-day activities if problems arise while trying to migrate to one of Veeva's competitors, given the strict regulatory requirements they face.
Further, Veeva Systems estimates a total addressable market of $20 billion. It has only captured 14% of that total. Doubling its share of this market within the next five years would allow Veeva Systems' revenue and earnings to continue growing at a good clip. That could mean excellent returns to investors over the long run.
