How To Pick the Best Stocks of 2025 (and which are best)
The Santa Claus rally is racing up to great you with its promise of sweet, fast, easy returns, but are the real best stocks to be found in the January market dip expected too?
You’re looking for easy, reliable selections and I’ve got a collection of stocks that might fit the bill. But before you get impulsive, take a couple of minutes to investigate demand and price issues, and what market forces are driving the positive 2025 market forecast.
And of course, we can refer to the big bank’s and top analysts picks, only if you believe they are being genuine and not just trying to sell something.
Past Rally Events Might Hold Valuable Clues
If you head back to the last big rally, you might find the very same stocks will outperform this time. The November 4th to 11th period saw a big lift, as happened Sept 9th to 19th.

Just remember, that on January 20th, the Trump 2.0 era begins officially, and this will impact the markets. If low rates are impossible, you still might see a surging consumer spend as businesses regain their confidence and begin hiring for this strong 4 year growth ahead. Consumers are in a positive mood spending more on Xmas and on travel in 2025.
The most likely scenario is a year-end boost of up to 5%, and a 10% overall for 2025. Both happened last year, and we’re facing much better US economic and market conditions this time around.
All in On USA Stocks
It’s a time to sell foreign equities and go all in one US stocks.
However, some analysts believe January will see a pullback, just like we had recently. They believe the FED will have the power to stall the market with high for longer interest rates. But rates were higher last December. Corporate earnings (S&P 500) have been solid, so lower taxes, deregulation, and a pro-US manufacturing and trade agenda (Trump 2.0) should propel the markets to the heights Tom Lee predicts. Prices will rise to January 2nd and then fall due to profit taking, and the expectation of a correction, before the market surges again in February.
The market correction might not tell you a lot other than which stocks were overpriced, so that might be wise to know. Alternative energy stocks are likely the ones to stay away from as conventional energy takes front and center stage. With lower oil and gas prices, investing directly in oil stocks is likely not wise. Instead, finding those companies most likely to benefit from low energy prices is wisest. However, if the price of oil remains above $70 a barrel in the next few years, oil stocks would be very lucrative.
Let’s look at some factors you need to know before you pick your favorites.
Identify High-Growth Sectors
Why it Matters: Economic recoveries often see particular sectors outperform as they benefit from pent-up demand, policy changes, and innovation. Identifying these sectors early allows investors to position themselves for maximum returns.
Key Sectors to Watch:
- Conventional Energy: With Americans poised to drive oil and natural gas prices down through increased production and export capacities, companies operating in this sector are likely to see strong performance. Lower energy prices can boost profit margins across multiple industries and drive economic growth.
- Stocks to Watch: ExxonMobil (XOM), Chevron (CVX), and Devon Energy (DVN).
- Artificial Intelligence (AI): AI is transforming industries, from healthcare to logistics, making it one of the most promising investment themes.
- Stocks to Watch: Nvidia (NVDA), Microsoft (MSFT), and Palantir Technologies (PLTR).
- Healthcare Innovation: An aging global population and post-pandemic healthcare reforms are driving demand for medical devices, biotech breakthroughs, and telemedicine.
- Stocks to Watch: Moderna (MRNA), Intuitive Surgical (ISRG), and Teladoc Health (TDOC).
Research the Most Undervalued Stocks
Why it Matters: Market slumps often result in quality stocks trading below their intrinsic value. These undervalued opportunities offer significant upside as the market corrects mispricing.
How to Spot Them:
- Look for low price-to-earnings (P/E) ratios compared to industry peers.
- Assess free cash flow and debt levels to ensure financial stability.
- Focus on companies with a competitive advantage in their sector.
List of Most Undervalued Stocks
Victory Capital Holdings (NasdaqGS:VCTR), NBT Bancorp (NasdaqGS:NBTB), Intuitive Machines (NasdaqGM:LUNR), Snap (NYSE:SNAP). UMB Financial (NasdaqGS:UMBF), Five Star Bancorp (NasdaqGS:FSBC), Symbotic (NasdaqGM:SYM), Privia Health Group (NasdaqGS:PRVA). Yahoo Finance believes these are trading at a significant discount.
Yahoo Finance offers further possibilities with stocks with earnings growth rates better than 25% and relatively low PE and PEG ratios. These include:
- General Motors (GM)
- Energy Transfer(ET)
- APA Corporation (APA)
- Kinross Gold Company (KGC)
- Baker Hughes Corporation (BKR)
- Mattel Inc. (MAT)
- Dole plc (DOLE)
- AGNC Investment (AGNC)
- MetLife Inc. (MET)
- Flex Ltd (FLEX)
- Goldman Sachs (GS)
- Arch Capital Group (ACGL)
Time the Market Bottom
Why it Matters: Buying at or near the bottom maximizes potential gains. While timing the exact bottom is difficult, recognizing signs of a market reversal can help. You might still have time to buy today, to get in on the Santa Claus Rally, otherwise, you might have to wait to mid-January.
Understand Macroeconomic Trends
Which sectors are most likely to benefit from the promise of the Trump 2.0 economic agenda? This will come into focus over the next few months as the certainty of the new President’s push for American business becomes crystalized.
Why it Matters: Broader economic conditions, such as government taxation and trade policies, interest rates and GDP growth, heavily influence stock performance. The economic outlook will improve and the doomsday prognosticators will lose credibility. As these positive indicators build, they create a massive potential for money to move over from the money markets to equities. This timing is hard to guess, but it may happen in earnest in the second half of 2025, as President Trumps policies begin to gain traction.
Leverage Emerging Trends
Why it Matters: Investing in emerging technologies and trends provides exposure to exponential growth opportunities.
Examples:
- Transportation Stocks: Lower fuel prices provide an obvious jolt to transportation companies. Deregulation and lower taxes will be very beneficial too. From Amazon to Delta Airlines, and all between, this could be a winner for 2025/2026. Examples include: Delta Airlines (DAL), Jet Blue (JBLU), United Parcel Service (UPS), Amazon (AMZN),
- Paints and Coatings Companies: who save on raw materials and enjoy greater demand as the economy picks up and the housing market outlook improves. PPG Industries (PPG), Valspar (VAL), Goodyear Trire & Rubber (GT), Berry Plastics, (BERY).
- 5G Infrastructure: The rollout of 5G networks is enhancing connectivity and creating new applications.
- Stocks to Watch: Qualcomm (QCOM), Verizon (VZ), and American Tower Corporation (AMT).
- Biotech Breakthroughs: Advances in gene therapy and personalized medicine are revolutionizing healthcare.
- Stocks to Watch: CRISPR Therapeutics (CRSP), Biogen (BIIB), and Vertex Pharmaceuticals (VRTX).
- Cryptocurrency: some analysts believe Bitcoin will rocket to $1 million by next year given deregulation and support for its widespread use (See more on Bitcoin stocks). Stocks with the most exposure to Bitcoin and cryptocurrency include: Microstrategy (MSTR), Beyond Inc., Hive Digital Technologies (HIVE), Riot Platforms (ROIT), Marathon Digital Holdings (MARA), Canaan (CAN), and Grayscale Bitcoin (GBTC).
See more on the 2025 stock market forecast, and remember to review the stock market crash post just to keep your head level before you gamble on your stock picks.
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