Roughly one month into 2025, the stock market is off to a decent but far from spectacular start. As of this writing, the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average are up 3.2%, 2%, and 5.6%, respectively.
However, as always, there's more to the picture when you scratch below the surface. Some individual stocks are off to a red-hot start to 2025. Let's have a closer look at two that investors should consider.
Image source: Getty Images.
1. Robinhood Markets
First, there's Robinhood Markets (HOOD +4.98%).
NASDAQ: HOOD
Key Data Points
As of this writing, shares of Robinhood are up more than 42% year to date and more than 387% over the last 12 months.
The company operates a brokerage platform where investors can trade stocks, exchange-traded funds (ETFs), cryptocurrencies, commodities, and more.
In its most recent quarter, Robinhood delivered excellent earnings results, highlighted by:
- Revenue of $637 million, up 37% year over year.
- Net income of $150 million versus a net loss of $85 million one year earlier.
- Customer count of 24.3 million, up 1 million from a year ago.
- Average revenue per user of $105, up 31% year over year.
Clearly, the company is executing on its business model, bringing in new investors, and driving its revenue and profits higher. However, management is also expanding into new areas that could attract new customers and increase revenue from existing ones.
For starters, the company is reportedly expanding into futures trading for crypto, oil, gold, and major equity indexes. In addition, Robinhood has entered into the field of prediction markets. This will allow users to wager on the outcome of live events -- including sports events, high-profile elections, and the release of economic data.
According to consensus estimates compiled by Yahoo Finance, analysts expect Robinhood to generate more than $2.8 billion in revenue in 2025, up 17% from last year. I think those estimates are conservative, and the company could surpass them as it scales up its new initiatives.
At any rate, growth investors should keep an eye on this red-hot stock. It could be one of the best names to own in 2025.
2. Meta Platforms
Next, there's Meta Platforms (META +0.29%).
NASDAQ: META
Key Data Points
As of this writing, shares of Meta have advanced by nearly 20% year to date. Going back 12 months, its stock is up more than 50% -- not bad for a company with a market cap of nearly $1.8 trillion.
Meta's stock is surging because the company is firing on all cylinders. Revenue, net income, and free cash flow all stand at record highs.
META Revenue (TTM) data by YCharts
It's all down to Meta's truly global scale. The company boasts more than 3.4 billion daily average users (DAUs) across its suite of apps, including Facebook and Instagram. That means roughly three of every eight people on Earth use one of its apps daily.
Consequently, the company can generate a flood of advertising revenue. Nearly 97% of the company's revenue comes through advertising, and Meta generates around $14.25 in revenue per user per quarter. That figure has steadily increased over time and is up about 16% from a year ago.
Finally, investors should remember that successful companies deliver shareholder value, and Meta surely does that. One year ago, the company announced a $50 billion share repurchase plan and also instituted a regular quarterly dividend of $0.50 per share. Those two items deliver tangible value to shareholders, particularly over the long term.
To sum up, Meta's enormous scale delivers incredible revenue, profits, and free cash flow. In turn, it delivers shareholder value through its buyback program and dividends. It's a formula that has worked very well over the last 12 months, and it could make Meta one of the best stocks to own in 2025.
