Thousands of stocks trade on U.S. stock exchanges. Even more trade off-the-counter. Many of them are good picks for investors.
This makes identifying favorites exceptionally difficult. But I've taken a stab at doing just that. Although the selection process wasn't easy, here are my two favorite stocks to buy right now.
Image source: Getty Images.
1. Amazon
Legendary investor Peter Lynch promoted the idea of buying what you know. I probably know Amazon (AMZN 1.35%) as well as any other company around. I've used its products and services multiple times in just the last 24 hours.
However, Amazon isn't one of my favorite stocks to buy right now solely because of my familiarity with its business. I believe the company has several strong moats that help it fend off competition, along with multiple ways to grow.
Those moats include cost advantages with Amazon's e-commerce platform, operational scale, and network effects. The last one on the list is especially impressive with Amazon. The more people who shop online and the more vendors who offer their products for sale using the company's platform, the more valuable the platform becomes.
NASDAQ: AMZN
Key Data Points
Amazon's e-commerce still has plenty of room to grow. CEO Andy Jassy noted in the company's October 2024 quarterly update that Amazon's share of the global retail market is only around 1%. Between 80% and 85% of retail sales still occur in physical stores. Jassy predicts that e-commerce will capture a much larger share of the retail market over the next 10 to 20 years. I think he's right.
But e-commerce probably won't be Amazon's primary growth driver. That honor belongs to Amazon Web Services (AWS), which currently ranks as the No. 1 cloud services provider. AWS is likely to be one of the biggest winners from advances in artificial intelligence (AI) over the next decade and beyond.
Amazon has other growth opportunities, too. The company has expanded into healthcare. It's planning to launch a satellite internet service later this year using its Project Kuiper satellite network. Amazon's Zoox subsidiary is positioned to be one of the top players in a U.S. robotaxi market that one market researcher projects will grow by a compound annual growth rate of 74.6% through 2030.
2. Vertex Pharmaceuticals
Some might be surprised to see Vertex Pharmaceuticals (VRTX +1.25%) as one of my two favorite stocks to buy right now. The drugmaker has experienced two setbacks recently. It's throwing in the towel on VX-993 after the experimental pain medication failed to meet the primary endpoint in a phase 2 clinical study. The U.S. Food and Drug Administration (FDA) also told Vertex that it doesn't see a path forward for obtaining a broad peripheral neuropathic pain label for suzetrigine at this point.
Because of this double-whammy, Vertex's shares are down more than 20% below the all-time high set last summer. However, I think this big biotech stock is still an excellent pick for long-term investors.
NASDAQ: VRTX
Key Data Points
Vertex is practically immune to an economic downturn. It markets the only approved therapies for treating the underlying cause of cystic fibrosis (CF). The company doesn't face significant risk from President Trump's threatened pharmaceutical tariffs. Vertex has even been referred to as one of "biotech's tariff safe havens."
The drugmaker's newest CF therapy, Alyftrek, appears to be its best yet. Alyftrek is at least as effective as Vertex's top blockbuster drug, Trikafta/Kaftrio. But it offers a more convenient once-daily dosing. Verex also pays lower royalties on the new medicine, which should boost its profitability as Alyftrek's sales grow.
Non-opioid painkiller Journavx is a true rising star for Vertex. This drug fills a void between highly addictive opioids and safer, but less powerful, non-steroidal anti-inflammatory drugs (NSAIDs). Vertex is making great strides in securing payer coverage and formulary adoption. Physicians and patients have also reported positive experiences with Journavx.
As icing on the cake, Vertex could file for regulatory approvals for two other drugs next year. Povetacicept is a promising treatment for IgA nephropathy, a kidney disease that affects more patients than CF. Zimislecel is a potentially curative therapy for severe type 1 diabetes.
I won't even discuss Vertex's other pipeline programs, although several could be huge winners in the future. The great news is that I don't have to: Vertex's growth prospects are exceptionally strong based on the therapies that I did mention.
