Stocks are rallying this year, and naturally, some names are faring better than others. It may be tempting to pass on some of the top stocks of 2025 as big gainers in 2026 and beyond, but that could be a huge mistake. Winners keep winning.
The market is up 16% this year. Nvidia (NVDA 1.53%), Alibaba (BABA 1.60%), and Nu Holdings (NU 3.66%) have at least doubled the S&P 500's year-to-date gain. I think these are three soaring stocks that could serve you well over the next two decades. Let's take a short look a their long-term potential.
Image source: Getty Images.
1. Nvidia: Up 35% in 2025
They say that the bigger they are, the harder they fall. Owner of the country's largest market cap for most of the time since the summer of last year, Nvidia certainly fits the bill as the biggest U.S. exchange-listed stock. If I can revisit the old adage, I would say that the bigger they are, the harder they enthrall.
Nvidia became the first company to ever cross a market cap of $5 trillion two months ago. It has since retreated to $4.4 trillion, but don't get caught up in how high a market price tag can go. Focus on Nvidia's growth potential, its forward valuation, and how this generational wealth builder might be cheaper than you think.
NASDAQ: NVDA
Key Data Points
The Nvidia story has been told often and better than I could ever tell it. In a nutshell, it's a chipmaker that made breakthroughs with graphics cards, initially appealing to video gamers. Nvidia would introduce the first single-chip graphics processing unit (GPU) 26 years ago. Flash forward to now, and GPUs and other high-performance chips are at the heart of crypto mining and more importantly, cranking out artificial intelligence (AI) results.
Growth has been spectacular as the world clamors for its AI chips to fuel data centers. After back-to-back years of triple-digit revenue growth, Nvidia's top line is still expected to increase at a healthy 63% pace for the current fiscal year that ends next month. Business is expected to continue decelerating in the year ahead, rising at a still-impressive 49%. The bottom line is expected to rise even higher, increasing by 60% next year.
Despite the stock's stellar run -- it's a 13-bagger over the past five years -- the shares are surprisingly cheap. You can buy Nvidia for just 24 times forward earnings. Bears will argue that today's growth isn't sustainable, but it's not as if the company is operating at full strength. It's currently dealing with revenue- and margin-gnawing trade restrictions in China that have been holding back its true potential.
2. Alibaba Group: Up 78%
Nvidia's challenges in China could be an opportunity for one of the world's largest e-commerce companies. Alibaba is in a great place. It operates China's leading business-to-consumer platform and consumer-to-consumer marketplace. The two businesses account for 45% of Alibaba's consolidated revenue, but generated 113% of its consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in fiscal 2025.
NYSE: BABA
Key Data Points
Alibaba is using those two cash cows to bankroll investments, including international e-commerce and the development of AI chips. Throw in a cash-rich balance sheet, and Alibaba is able to self-fund some exciting long-term bets and still be able to aggressively participate in share buybacks.
How cheap is Alibaba? You can buy it for 20 times trailing earnings and 16 times what it's expected to earn in the new fiscal year starting in April. It's not growing at a very exciting pace, but it has a deep bench of future growth catalysts that deserves a strong premium to the market.
3. Nu Holdings: Up 58%
Let's keep globetrotting with the parent company of Brazil's Nubank. Nu Holdings has emerged as one of the world's fastest-growing fintechs and providers of digital banking services. It launched just 11 years ago, but more than 60% of Brazil's adult population already has either a Nubank credit card or an active account with the company.
NYSE: NU
Key Data Points
Revenue and adjusted net income rose 39% and 38%, respectively, in its latest quarter. Nu has also expanded into Mexico and Colombia, giving it two markets still early in their growth trajectories. Like Nvidia and Alibaba, you can buy this very profitable hot stock at a discount to its growth. Nu Holdings stock is trading for a reasonable 19 times forward earnings.
Sure, you could've bought Nvidia, Alibaba, and Nu at a much lower price earlier this year. The stories have only gotten better, and these should continue to be market beaters in the coming years.
