As I get older, I'm becoming more and more a fan of dividend-paying stocks -- for both their rather reliable income and also their stock-price-appreciation potential. Still, it's hard not to get intrigued and excited about powerful growth stocks. Who wouldn't want to see their assets growing at a faster-than-average rate?
Here, then, are three growth stocks you might consider buying in 2025. Each has an exciting business and solid growth potential.
Image source: Getty Images.
1. Opendoor Technologies
Opendoor Technologies (OPEN 3.00%) is a fairly young company, having gone public only in 2020. It's been growing rapidly, with an average annual growth rate of nearly 43% over the past three years -- and an amazing 293% increase over the past year.
What does Opendoor do? Well, it has what some suggest is a "risky business model." It helps people buy and sell homes via its online platform -- and it even buys homes from sellers to sell to buyers. With interest rates expected to drop over the coming year or longer, that can boost the company's business -- as lower rates mean home buying is easier for buyers. (Lower rates are typically good news for stocks, too, as it means companies can more easily borrow money with which to grow.)
If you're bullish on the real estate market and expect a lot of activity in it in the coming years, Opendoor Technologies could be a good fit for your portfolio. It even seems appealingly valued at recent levels, with a price-to-sales ratio of just 1.
If the company interests you, read up on its risks and opportunities. (For example, it may be laying off most of its employees.)
2. Broadcom
Broadcom (AVGO 0.03%) is not only a semiconductor company, but also a software company -- and a leader in networking equipment. The proliferation of artificial intelligence (AI) technology is serving as a great tailwind for the company, as it requires chips and software.
Broadcom is cranking out AI chips, and its AI division is growing more briskly than that of Nvidia -- which is impressive. It offers customizable AI accelerators for data centers, and data centers are proliferating, too, as they're needed to support AI activities.
Broadcom is also a dividend payer. Its recent dividend yield of 0.7% looks puny, but its rate of growth matters, too, and that has been strong, averaging 13% annually over the past five years. Its shares don't look bargain-priced, though, with a recent forward-looking price-to-earnings (P/E) ratio of 38, about twice its five-year average. Still, you might buy into the stock over time, or just add it to your watch list. If demand for Broadcom's chips and software grows rapidly, today's price might end up having seemed reasonable.
3. Intuitive Surgical
Intuitive Surgical (ISRG 2.83%) Intuitive Surgical is a leader in robotic surgery equipment. It has more than 9,900 of its million-dollar-plus da Vinci robotic surgery systems installed in 72 countries. Together, they've been used to perform more than 16 million procedures.
The company has been growing briskly -- second-quarter revenue was up 21% year over year -- but some worry about the effect of tariffs, should they continue. Management is still projecting double-digit growth, in spite of them. A particularly appealing aspect of the business is that it generates 84% of its revenue not from the costly systems themselves, but from dependable recurring sales of servicing, supplies, and accessories for the machines. Moreover, once a hospital has committed to a da Vinci machine, it can't go elsewhere for servicing and supplies.
Intuitive Surgical's stock trades at this writing with a forward P/E of 47, which is a bit below its five-year average of 56. Both those numbers are on the steep side, though, suggesting it may be overvalued, but know that the stock is priced more attractively lately than it usually has been.
So give these growth stocks some consideration. And remember that while growth stocks can grow much faster than the overall market, plenty of them are overvalued and some will flame out. So to mitigate that risk, we recommend investing in at least 25 companies and aiming to hold for at least five years.
