The US stock market has been on a rampage this year, rising by almost 30% when looking at leading indices like the S&P 500 and Nasdaq 100. Yet, even with all this tremendous growth, predictions for 2025 continue to look bullish.
That’s why I’m topping up some of my US stocks, including PayPal (NASDAQ:PYPL), Veeva Systems (NYSE:VEEV), Mercadolibre, Crowdstrike, and Arista Networks.
Across all five of these enterprises, each has had its own set of challenges in recent years. For example, Mercadolibre is navigating a high inflationary environment in Latin America, while Crowdstrike accidentally crashed the internet earlier this year. However, even with these challenges, all five businesses appear primed to thrive both next year and beyond.
Incoming growth
Let’s zoom in on PayPal first. The payment processing giant saw its top-line growth decelerate aggressively versus 2021. This triggered a crash in its share price that has still hasn’t recovered even after climbing more than 40% in 2024.
Looking at its latest results, growth continues to be a challenge. However, profit margins are on the rise, and earnings are once again growing at a rapid pace. Margin expansion obviously has its limits. However, with new partnerships being formed with Amazon and Shopify and online spending trends ramping up, the transaction volume moving through PayPal’s network could start accelerating again.
Of course, it’s not the only digital payments company chasing this opportunity, and the competition is getting increasingly fierce. However, PayPal isn’t the only firm that’s expected to benefit from improving macroeconomic conditions.
Veeva Systems is the global standard drug development platform used by 85% of all life sciences companies around the world. Its technology allows drug developers and research firms to organise, analyse, and remain compliant throughout pre- and post-clinical trials.
With interest rates elevated and equity valuations relatively soft, a lot of clinical trials have been temporarily postponed. But with interest rates dropping, a new wave of studies could be launched next year, most of which will require the specialist software that currently only Veeva seems to provide.
However, rising competition from the likes of Salesforce may soon change that with the launch of its own life science CRM solution. If a cheaper alternative that’s just as capable becomes available, Veeva’s monopoly-like grip might start to loosen.
Balancing risk and reward
The other three stocks also have their fair share of growth catalysts in 2025. And if everything goes according to plan, these US stocks could continue their current upward trajectory. But obviously that isn’t guaranteed.
Even if the US economy ends up delivering on GDP forecasts, these businesses, while strong, still have operational threats to contend with, a few of which I’ve already highlighted. And any hiccups could prove problematic in the short-term given these companies (with the exception of PayPal) are trading at a premium valuation.
That means volatility‘s to be expected. Nevertheless, given both the short-term and long-term potential, that’s a risk I’m willing to take for my growth portfolio. And that’s why I think other growth investors should consider taking a closer look.
