After a turbulent start to 2025, the stock market is once again near its all-time highs. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are up 6%, 7%, and 4%, respectively, year to date. So, what are some stocks that investors should be focused on? Here are three that I believe are savvy choices right now.
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Advanced Micro Devices
After surging 128% in 2023, and slumping 18% in 2024, Advanced Micro Devices (AMD -2.16%) stock is once again on fire. As of this writing, the stock is up 20% year to date, well ahead of the tech-centric Nasdaq Composite's gain of 7%.
The catalyst? AMD stock has been getting a boost from sell-side analysts who believe the company's newest artificial intelligence (AI) chips will aid it in its ongoing competition with Nvidia.
In short, Nvidia remains the king of AI chips, thanks to its long-standing position as the leader in the graphics processing unit (GPU) market. However, things are changing. AMD's MI350 chips and its upcoming MI400 chips are highly anticipated, and could help it cut into Nvidia's lead within the overall data center GPU market.
Moreover, AMD's newfound foothold in the AI data center market is helping to widen its margins. Overall, AMD's gross margins have increased from 42% to over 50% over the last three years, as the company's revenue mix shifts away from low-margin CPUs to higher-margin GPUs.
To sum up, AMD's newfound strength in the AI chip market makes it a stock to consider right now.
MercadoLibre
Simply put, MercadoLibre (MELI 2.69%) is a stock that every investor should know, but not everyone does. It's the leading e-commerce provider in Latin America -- a market where rival operators had previously struggled.
However, MercadoLibre seems to have cracked the code. That's great news for the company as it means there is still an immense market that it can grow into from here. Its business model is built on a familiar playbook: It runs an online storefront that matches buyers and sellers, then offers logistics solutions to deliver items to customers' doorsteps.
In addition, the company offers digital payment solutions (Mercado Pago) and advertising services (Mercado Ads).
If that all sounds similar to Amazon, it should. More to the point, it's difficult to argue with MercadoLibre's results. In the first quarter, it reported:
- $5.9 billion in revenue, up 37% year over year.
- $494 million in net income.
- $795 million in free cash flow.
Those are fantastic figures, and they point to the strength of the company's business model. Nevertheless, MercadoLibre stock has its risks, particularly because of the company's regional focus. Economic or political disruptions in its core Latin American markets could take a toll on MercadoLibre's business and its stock price. Therefore, this isn't a stock for every investor.
Alphabet
Finally, there's Alphabet (GOOG 0.66%) -- arguably, the most significant internet company around. A recent survey of the most visited websites by Datareportal/SemRush showed that the top two sites were once again Google and YouTube -- both owned by Alphabet. Indeed, those two sites alone accounted for more than 200 billion monthly visits, more than the next 18 largest websites combined.
What's more, Alphabet is at the forefront of several exciting cutting-edge technologies. Take robotaxis, for instance. Through its self-driving vehicle subsidiary, Waymo, Alphabet is one of only a handful of companies currently operating robotaxis for paying customers.
Many analysts see robotaxis as the future of transportation, which could open up a lucrative new revenue stream for Alphabet. In addition, Alphabet is investing in AI initiatives and quantum computing. Any of those areas of research could bear fruit for Alphabet if it can take the lead on some of the world's next great technological breakthroughs.
In summary, Alphabet is a technological juggernaut today, but it is not resting on its laurels. By investing in AI, autonomous vehicles, and quantum computing, Alphabet is well-positioned to remain a stock market giant well into the future.
