14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (2024)

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James Faris

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (1)

  • The remarkably robust market rally during the first half of the year has carried into July.
  • Goldman Sachs is increasingly optimistic about US stocks, but upside may be limited.
  • Here are 14 stocks that can grow their earnings by 25% or more in 2025.

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (2)

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14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (3)

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14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (4)

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Wall Street has significantly underestimated US stocks this year, but Goldman Sachs strategists are still skeptical that the S&P 500 can keep climbing the so-called "wall of worry."

Late last year, most top investment firms predicted that stocks would log modest gains in 2024 after an impressive 24.2% surge in 2023. The most bullish year-end target for the S&P 500 was 5,100, which represented solid upside of about 7% from where it ended the year.

Those predictions look paltry in hindsight, as the S&P 500 finished the first half of the year up 14.5% at 5,460. The index tacked on another 2% in the first week of July as investors scramble to add exposure to high-flying US equities.

Bulls are getting bolder, but risks remain

In response, several major firms have boosted their year-end S&P 500 targets in recent months. Strategy chiefs at Morgan Stanley, BMO Capital Markets, and Deutsche Bank lifted their targets in mid-May, while Oppenheimer's John Stoltzfus did so for the second time this year on Sunday, writing that the index would reach 5,900 instead of 5,500 as the economy remains resilient.

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Goldman Sachs is also increasingly bullish on US stocks, though only to an extent. The firm's top US equity strategist, David Kostin, raised his S&P 500 target to 5,600 from 5,200 in mid-June, though that new forecast still implies that the index will be flat in the next six months.

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (5)

Goldman Sachs

The strategy chief's cautious optimism stems from a belief that the S&P 500's earnings multiple will inch down from historically high levels, even as its components post 8% earnings growth.

A cheaper valuation could rock stocks, as earnings multiple expansion has made up nearly half of the S&P 500's return this year — a bigger driver than dividends or improving earnings results, Kostin wrote in an early July note. Unless valuations rise further, he thinks stocks will stagnate.

Another reason for concern, in Kostin's view, is that the market is unusually top-heavy.

Goldman Sachs found that six mega-cap growth stocks — Alphabet, Amazon, Apple, Meta, Microsoft, and Nvidia — accounted for 62% of the S&P 500's gain in 2024. The equal-weight S&P 500, which gives the same weight to each stock in the index, only rose 4.1% through June.

As for sectors, the spread between leaders and laggards is also rather jarring. Technology and communication services stocks are up 31% to 33% this year, while the other nine sectors are trailing the broader market. However, only the real estate sector is in negative territory.

"Investors rewarded AI-exposed pockets of the market, with utilities rising by 9% and a basket of AI infrastructure stocks rising by 32%," Kostin wrote in the note.

14 stocks set to grow earnings 25% or more in 2025

If the market's earnings multiple falls as feared in the second half of the year, investors will put a larger premium on profit growth. And as next year nears, future earnings will come into focus.

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Goldman Sachs recently shared earnings growth projections for the 100 biggest stocks in the S&P 500, both for this year and next. Only 14 companies in that cohort are expected to expand earnings by 25% or more in 2025, down from 17 expected to hit that mark in 2024.

Below are those 14 large-cap stocks expected to grow earnings by at least 25% next year, along with each one's ticker, market capitalization, and 2024 and 2025 earnings growth estimates.

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1. Uber Technologies

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (6)

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Ticker: UBER

Market cap: $148.9B

2024 earnings growth: 2%

2025 earnings growth: 146%

Source: Goldman Sachs

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2. Intel

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (7)

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Ticker: INTC

Market cap: $143.8B

2024 earnings growth: 6%

2025 earnings growth: 78%

Source: Goldman Sachs

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3. Advanced Micro Devices

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (8)

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Ticker: AMD

Market cap: $287.3B

2024 earnings growth: 32%

2025 earnings growth: 59%

Source: Goldman Sachs

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4. Eli Lilly

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (9)

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Ticker: LLY

Market cap: $873.2B

2024 earnings growth: 118%

2025 earnings growth: 40%

Source: Goldman Sachs

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5. AnalogDevices

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (10)

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Ticker: ADI

Market cap: $115.7B

2024 earnings growth: -31%

2025 earnings growth: 37%

Source: Goldman Sachs

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6. Charles Schwab

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (11)

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Ticker: SCHW

Market cap: $134.1B

2024 earnings growth: 4%

2025 earnings growth: 33%

Source: Goldman Sachs

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7. Tesla

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (12)

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Ticker: TSLA

Market cap: $790B

2024 earnings growth: -19%

2025 earnings growth: 33%

Source: Goldman Sachs

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8. Nvidia

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (13)

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Ticker: NVDA

Market cap: $3,170T

2024 earnings growth: 108%

2025 earnings growth: 30%

Source: Goldman Sachs

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9. KKR

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (14)

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Ticker: KKR

Market cap: $93.1B

2024 earnings growth: 38%

2025 earnings growth: 30%

Source: Goldman Sachs

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10. Lam Research

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (15)

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Ticker: LRCX

Market cap: $143.9B

2024 earnings growth: 16%

2025 earnings growth: 29%

Source: Goldman Sachs

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11. Amazon

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (16)

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Ticker: AMZN

Market cap: $2,070T

2024 earnings growth: 58%

2025 earnings growth: 27%

Source: Goldman Sachs

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12. Blackstone

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (17)

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Ticker: BX

Market cap: $146.2B

2024 earnings growth: 22%

2025 earnings growth: 26%

Source: Goldman Sachs

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13. Citigroup

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (18)

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Ticker: C

Market cap: $123.2B

2024 earnings growth: -5%

2025 earnings growth: 26%

Source: Goldman Sachs

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14. Broadcom

14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (19)

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Ticker: AVGO

Market cap: $807B

2024 earnings growth: 18%

2025 earnings growth: 25%

Source: Goldman Sachs

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14 stocks to buy for at least 25% earnings growth in 2025 while the stunning market rally stalls, according to Goldman Sachs (2024)

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