Wall Street is a big believer in technology stocks at the moment. And who can blame them, with the rapid growth coming from areas of the market such as artificial intelligence (AI), cloud computing, and e-commerce?
Even after decades of growing online consumer spending, the market continues to expand. E-commerce still represents less than 20% of total retail spending in the United States, presenting a large tailwind for companies in the space. Meanwhile, generative AI models like ChatGPT have only been mainstream for about two years, yet the technology is already making big changes in the business world and in society overall.
These fast-growing industries are great places to look for opportunities as an investor. Here are two hypergrowth stocks to buy for your portfolio in 2025.
NYSE: TSM
Key Data Points
Powering higher with AI
The world is spending an absurd amount of money on AI data centers. That investment wouldn't be occurring without the help of Taiwan Semiconductor Manufacturing (TSM 4.37%). It is the world's leading producer of advanced computer chips, taking a majority market share in its industry as the go-to partner for major chip companies.
For example, companies like Nvidia design and sell computer chips for data center development. Large technology players such as Amazon are working on their own chips for cloud computing data centers as well. Even Apple is creating its own chips for smartphones and other devices. A large share of these chips are built by Taiwan Semiconductor Manufacturing, or TSMC for short.
Having such a dominant position in the industry has propelled TSMC's revenue growth higher and higher over the years. Last quarter, revenue increased 35% year over year in U.S. dollar terms, driven by the high-performance computing segment. This segment now makes up 59% of revenue for TSMC, a number that will likely climb along with the growth in AI spending around the globe.
With minimal competition, TSMC is able to command high prices for its advanced chips, which is why the company sports an operating profit margin close to 50%. Sales are up 247% in the last 10 years, a trend I believe can continue over the next decade as well. TSMC is a hypergrowth technology stock that is a great long-term buy-and-hold pick for your portfolio in 2025.
Image source: Getty Images.
Insane e-commerce growth in Latin America
If there is still plenty of room for e-commerce to grow in the United States, then the Latin America market has even more potential. E-commerce as a percentage of retail sales remains well below its northern neighbors, giving platforms in the region a much longer growth runway. It's still early days for the sector.
MercadoLibre (MELI +0.41%) is the leader in this space. The company's e-commerce and retail platform has amassed a large following in Mexico, Brazil, Argentina, and other markets in the region. With an Amazon-esque model, the company has grown its revenue an astonishing 3,300% in the last 10 years, making MercadoLibre one of the fastest-growing technology companies in the world. Revenue in 2024 reached $20.8 billion.
On top of e-commerce, the company has expanded successfully into financial technology with its Mercado Pago platform. Its fintech services have 61 million active users, and they're growing even faster than e-commerce with revenue rising from $111 million in 2012 to $8.6 billion in 2024.
With a large tailwind at its back in these core Latin American markets as customers embrace e-commerce the same way other nations have, MercadoLibre's revenue can keep growing at a rapid pace over the next 10 years, just like it has in the past decade. However, for this market leader, investors must be willing to accept a high price-to-earnings ratio (P/E) of 60 -- a hefty premium for a fast-growing, high-quality business. With that in mind, patience is required for those who buy the stock in 2025.
