Every year, we ask our freelance writers to share their top US stocks with investors to consider buying in the year ahead — here’s what they rate highly for the long term!
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CSX
What it does: CSX is one of the two major US freight railroads operating in the Eastern half of the USA.
By Stephen Wright. I’m almost certain that CSX (NASDAQ:CSX) won’t be the best-performing stock in the S&P 500 in 2025. But I think the chances of the company doing badly are extremely low.
I’m expecting US industrial output to grow next year and that’s going to mean materials need to get moved around. Doing this by rail is cheaper and more environmentally friendly than trucks.
That’s not to say the business is invulnerable. Industrial action is one and storms damaging infrastructure that can be expensive to replace is another.
CSX has dealt with both issues in 2024, though, and still performed well. I expect it to keep doing this, with regulation and costs limiting the threat of competition from other businesses.
At 1.3%, the dividend yield isn’t huge. But add on a share buyback programme that has cut the shares outstanding by 4% per year over the last decade and I think things get very interesting.
Stephen Wright owns shares in CSX.
Snowflake
What it does: Snowflake is a technology company that offers cloud computing and data analytics services via a software-as-a-service (SaaS) model.
By Edward Sheldon, CFA. It wasn’t easy to pick my top US stock for 2025. That’s because there are so many world-class companies in the US today. But I’m going to go with Snowflake (NYSE: SNOW). It’s a software company that’s growing rapidly.
I expect artificial intelligence (AI) to be a big theme again in 2025. And I reckon Snowflake will be a beneficiary. You see, it offers solutions that help organisations store and structure their data effectively. If firms are keen to use AI, getting their data right is the first step.
Snowflake’s recent Q3 results were good. For the quarter, revenue was up 28% year on year. Meanwhile, net revenue retention rate was 127% (meaning that customers are spending more with the company). After these results, over 20 brokers raised their price targets for the stock.
One factor behind the company’s recent performance is new CEO Sridhar Ramaswamy. He’s been working seven days a week to drive growth. Looking ahead, increased economic clarity should help the company achieve further growth. This backdrop should give firms more confidence to invest in tech solutions.
I’ll point out that Snowflake has a lofty valuation. If growth slows for some reason (e.g. firms reduce spending on AI), the share price could be volatile. Taking a long-term view, however, I’m excited about the potential here. I’ve been adding to my position recently.
Edward Sheldon owns shares in Snowflake.
Uber Technologies
What it does: Uber is the world’s leading ride-hailing company.
By Ben McPoland. I reckon Uber Technologies (NYSE: UBER) stock is set up for a strong 2025.
After years of steep losses, the company finally turned profitable in 2023. This was after it exited underperforming overseas markets, cut costs, and disposed of non-core businesses.
As a result, Uber is leaner and profits are set to motor higher in the years ahead. Indeed, between 2024 and 2026, earnings per share (EPS) are expected to almost double!
As I write, this puts the stock on a forward P/E ratio of 30, falling to around 22 by 2026. I see that as reasonable for a growing companywith 161m monthly active users – and counting – across its ride-hailing and meal delivery platforms.
There are risks, of course. These mainly centre around increasing regulations and demands for higher wages among drivers.
However, I reckon investors could turn more bullish on driverless taxis. Uber has signed partnerships with 14 leading autonomous vehicle companies, while market leader Waymo is already doing tens of thousands of paid robotaxi trips per day (many through the Uber app) in a handful of US cities.
I think the stock’s worth considering for 2025 and beyond.
Ben McPoland owns shares in Uber.
The post Best US stocks to consider buying in 2025 appeared first on The Motley Fool UK.
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The Motley Fool UK has recommended Snowflake and Uber Technologies. 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.
