On January 1, King Lip, chief strategist and partner at BakerAvenue Wealth Management, joined CNBC’s “Closing Bell” to discuss the market outlook heading into 2025. He focused on the impressive performance tech stocks in 2024, with expectations for a second consecutive year. double-digit gains. Lip was against the prevailing sentiment among investors that big tech has reached its peak and that funds should shift to smaller stocks or other themes. He argued that the technology sector’s recent weakness is largely due to technical rebalancing rather than a fundamental slowdown. He highlighted that cash is likely to flow back into major technology stocks as they are expected to deliver the strongest earnings growth in 2025, with profits expected to increase by more than 20%.
On high valuations in the technology sector, particularly for large-cap stocks trading at forward earnings multiples of between 32 and 35 times, Lip countered that many valuations remain within a standard deviation from their historical norms over the past decade. He highlighted that MAG7s have consistently generated strong returns and are well positioned for future growth. Lip identified Broadcom as one of the top stocks, praising its leadership under Hock Tan and its unique role in the market as a supplier of custom AI chips. He highlighted that the company is operating at a lower earnings multiple while enjoying substantial growth.
Lip also discussed Palantir, which has gained attention for its profitability and positive cash flow since becoming profitable two years ago; despite its high valuation of more than 50 times revenue, he believes it is well-positioned to benefit from government spending cuts and AI initiatives. While acknowledging concerns about insider selling and the company’s high valuations, Lip remains optimistic about its future potential, suggesting it could be more attractive if it falls to around $60.
Lip is optimistic that tech stocks in 2025 will be driven by strong earnings growth and continued investment in AI infrastructure. The NASDAQ 100 Index has performed remarkably well, returning 27% in 2024 after a staggering 53.8% return in 2023. This reflects a broader trend in which large technology companies have significantly outperformed traditional indexes , and with that recognized, we are here with a list of the 12 best tech stocks to invest in for the long term.
Methodology
To identify the best long-term tech stocks according to media reports, we sifted through financial media reports and observed Wall Street analysts’ appearances on the news. We first made a preliminary list of 25 stocks, then selected 12 most popular stocks among elite hedge funds. Stocks are listed in ascending order of the number of hedge funds with stakes in them, as of Q3 2024. Hedge fund data comes from the Insider Monkey database which tracks the movements of more than 900 elite fund managers .
Why are we interested in stocks that hedge funds are piling into? The reason is simple: our research has shown that we can outperform the market by imitating the stocks selected by the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (ssee more details here).
Analyst Explains Why Uber Technologies (UBER) Is His Top Pick for 2025, Negatives Robotaxi Concerns
Close-up view of a hand holding a smartphone, using a ride-sharing app.
Number of hedge fund holders: 136
Uber Technologies Inc. (NYSE: UBER) is a technology company that operates a global platform connecting consumers with service providers. It operates in 3 main segments: mobility, delivery and freight. It provides consumers with flexible and cost-effective transportation options, eliminating the need to own a personal vehicle.
Its platform has evolved beyond traditional ride-hailing services to Uber Eats, Uber Freight and Uber Shopping, which collectively generate $20 billion in annual gross bookings. The company’s gross bookings increased 20% year-over-year in the third quarter of 2024. This was driven by an increase in user frequency, as evidenced by the 70% year-over-year growth in Uber One members. , which now exceeds 25 million. Uber One is a paid membership program offering discounts on rides and deliveries through the Uber and Uber Eats apps.
It dominates the market in major urban centers, such as its market share of around 30% in New York and around 40% in London. However, its growth trajectory is now shifting towards suburbs and secondary cities, due to an increase in demand, and these regions are experiencing annual growth of 20-25%, surpassing the 10-15% growth seen in central urban areas. Uber Technologies Inc. (NYSE: UBER) has the potential to maintain its leadership position in the mobility market.
The RiverPark Large Growth Fund analyzed Uber Technologies, Inc.’s (NYSE:UBER) impressive market reach in Q4 2023. investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a key contributor to the quarter with better than expected results in 3Q23 and guidance for 4Q23. Gross bookings of $35.3 billion increased 21% year-over-year. Gross mobility bookings of $17.9 billion increased 30% from last year, driven by a combination of product innovation and driver availability. Gross delivery bookings of $16 billion increased 16% year-over-year and remained strong throughout the quarter. First-quarter adjusted EBITDA of $1.1 billion, up $576 million year-over-year, was above management’s forecast of $1 billion, and the company generated $900 million of free cash flow, compared to $358 million last year. Management has guided for continued growth in Q4 gross bookings (23.5% growth) and adjusted EBITDA (up $1.2 billion).
Global UBER ranks 8th on our list of the best tech stocks to invest in for the long term. While we recognize the growth potential of UBER as an investment, our conviction lies in the belief that AI stocks hold great promise in terms of high returns and in a shorter time frame. If you’re looking for an AI stock that’s more promising than UBER but is trading at less than 5x earnings, check out our report on the cheapest AI stock.
