Wolfe provides a "stock picking guide" for the S&P 500: 15 constituent stocks with at least 25% revenue growth this year
Wolfe Research's strategists believe that growth stocks will outperform the market in 2025 and have listed S&P 500 constituents expected to grow revenue by 25%. They prefer cyclical and growth stocks, especially small and mid-cap stocks. Apple, Microsoft, Alphabet, Amazon, NVIDIA, Meta, and Tesla are expected to perform better than other constituents. The information technology, energy, and communication services sectors are expected to see revenue growth exceeding 25%. Meanwhile, the U.S. real GDP growth rate is projected to be 2.5% in 2025
Zhitong Finance learned that strategists at Wolfe Research still believe that growth stocks will outperform the market in 2025 and have listed stocks expected to grow revenue by at least 25% this year. In a recent report, the strategists stated that they prefer cyclical and growth stocks over high-quality and value stocks; and they favor small and mid-cap stocks over large-cap stocks. They expect the performance of the seven tech giants—Apple (AAPL.US), Microsoft (MSFT.US), Alphabet (GOOGL.US), Amazon (AMZN.US), NVIDIA (NVDA.US), Meta (META.US), and Tesla (TSLA.US)—to outperform other components of the S&P 500 index.
Chris Senyek, Chief Investment Strategist at Wolfe Research, stated, "We still believe that solid fundamentals and increased spending on artificial intelligence will drive their performance to exceed that of the S&P 500 index this year."
Additionally, the strategists indicated that they expect revenue growth in the information technology (XLK.US), energy (XLE.US), and communication services (XLC.US) sectors to exceed 25% by 2025, with respective growth rates of 46%, 32%, and 26%. In contrast, Wolfe analysts noted that the consumer staples (XLP.US) sector is not expected to see significant revenue growth; the utility sector's revenue growth is only 6%, while the materials sector (XLB.US) is at 7%.
They also forecast that the real GDP growth rate in the U.S. for 2025 and 2026 will be 2.5%, while the average forecast from Wall Street economists is 2% - 2.1%. He believes that as long as the U.S. does not fall into recession or there are no significant changes in expectations for AI spending, market concentration in 2025 will remain at a high level.
Senyek said, "Economic surprises are on the rise, and we believe this momentum will continue, as we expect both consumer and business confidence to rise, with deregulation across industries and tax cuts potentially extended, leading to moderate additional tax cuts starting in 2026."
Furthermore, Wolfe analysts stated that they believe the weak performance of the stock market in December was a "technical sell-off, as investors may have sold stocks to lock in last year's gains."
Here are the stocks that Wolfe Research analysts believe will have revenue growth of at least 25% among S&P 500 index constituents in 2025:
