This year, lots of S&P 500 stocks have produced big gains. Plenty of shares I own that are in this stock market index have risen more than 30%.
Looking ahead to 2025, I expect this index to be a source of opportunity for investors again. With that in mind, here are three S&P 500 growth shares to consider buying for a Stocks and Shares ISA.
Amazon
Starting with a Big Tech play, I like Amazon (NASDAQ: AMZN) right now. It has done well this year (rising around 50%). However, I think the uptrend here has legs.
One reason I’m bullish is that after years of cost-cutting, Amazon is on a growth drive again. Recently, it has been rolling out some incredible artificial intelligence products designed to help customers build their own AI applications.
It has also entered the AI chip space, and recently launched its high-powered ‘Trainium 3’ product. These chips could be popular given that Nvidia’s chips are both very expensive and supply-constrained.
Now, a risk is a slowdown in consumer spending. Today, a large chunk of Amazon’s revenues still comes from online shopping.
With the price-to-earnings (P/E) ratio under 40, however, I like the risk/reward set-up. I’ve made the stock my largest holding.
KLA Corp
2024 was a mixed year for companies in the AI chip ecosystem. While Nvidia (which designs chips) did really well, a lot of companies that specialise in chip manufacturing equipment didn’t.
Given this lack of performance in the chip manufacturing equipment space, I think there could be some opportunities here for 2025. And one stock I like is KLA Corp (NASDAQ: KLAC).
This company specialises in technology that helps to ensure chip quality and production efficiency. So, the way I see it, it’s a good ‘picks-and-shovels’ play on the semiconductor industry.
That’s not the only reason I like it though. I’m also attracted to the earnings growth and the valuation. For the year ending 30 June 2025, Wall Street expects earnings growth of a high 30%. Meanwhile, the P/E ratio here right now is just 20.7, which is not high.
Now, I’ll point out that KLA generates around 20% of its revenues in China. So US export restrictions are a risk.
I believe the company will do well in the years ahead though. That’s because it plays a crucial role in the chip industry.
Nasdaq
Finally, I like the look of Nasdaq (NASDAQ: NDAQ) as we head towards 2025. It operates stock market platforms and also offers solutions in relation to data, indexing, analytics, and regulatory technology.
There are a few reasons I’m bullish here. One is that as the operator of the tech-focused Nasdaq index, it should do well as the tech industry continues to grow.
Another is that there’s a good chance that the IPO market will heat up next year. This could lead to more revenue for the company.
Finally, the stock is trending up and the valuation looks attractive. Currently, the P/E ratio is under 25.
Of course, in the short term, a meltdown in the financial markets or the tech sector could lead to share price weakness. Taking a long-term view, however, I think the shares have tons of potential.
I’ve just bought a few for my own portfolio.
The post 3 top S&P 500 growth shares to consider buying for a Stocks and Shares ISA in 2025 appeared first on The Motley Fool UK.
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Ed Sheldon has positions in Amazon, KLA, Nasdaq, and Nvidia. The Motley Fool UK has recommended Amazon, Nasdaq, and Nvidia. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
