Generating a second income through investing is a goal many aspire to. Immediately achieving significant passive income is challenging without substantial capital to start with. However, I think 2025 presents unique opportunities for investors to build wealth and work towards future income streams.
The US market remains expensive and continues to attract global capital — and suck global capital away from other markets. But savvy investors can find promising investment opportunities everywhere, particularly in advanced technologies.
The rapid advancements in artificial intelligence (AI), quantum computing, biotechnology, and gene editing, to name a few, are creating exciting investment landscapes. The global AI market is projected to compound at around 30% for the rest of this decade. Even better, this technological advancement is also supercharging the pace of global innovation.
For investors looking to capitalise on these trends, diversification is key. A portfolio of well-chosen investments could prosper in 2025 as markets adapt to emerging technologies, shifting economic conditions, and evolving global dynamics.
Success starts in 2025
So, where could investors look for success in 2025? Well, there’s a plethora of opportunities in the US and the UK, as well as elsewhere in the world.
Here are some investment options that rank well on a quantitative basis. Most of these have strong price-to-earnings-to-growth (PEG) ratios. The PEG ratio has traditionally been a useful tool for investors, indicating how expensive a company is relative to its growth forecast.
2024 Performance
PEG ratio
Celestica
231%
0.88
Gorilla Technology Group
302%
0.7
Nu Holdings
31%
0.5
IonQ
264%
N.a.
Advanced Micro Devices
-11%
0.9
Power Solutions International
1,430%
0.5
Blue Bird Corporation
46%
0.77
While past performance and PEG ratios are no guarantees of growth, investors can consider these stocks as potential starting points for building wealth. By putting £500 a month into an ISA and investing in top-rated stocks, investors could put themselves on the path to getting rich and, in the long run, generating a strong second income.
AI can push this stock higher
Celestica (NYSE:CLS) is a compelling investment opportunity in the current AI-driven market, in my view. With a remarkable 231% return over the past year, the stock isn’t short on momentum.
Despite this surge, the company’s valuation remains attractive, trading at 24 times forward earnings with an expected 28% compound annual growth rate in earnings. This results in a favourable PEG ratio of 0.88, indicating potential undervaluation.
Celestica’s success is largely attributed to its Cloud Computing Solutions segment, where the company’s computer hardware has seen increased demand by hyperscalers. Moreover, management’s strategic shift towards higher-margin cloud computing operations has paid off — the CCS segment now accounts for over two-thirds of revenue and grew by 42% in Q3.
Concentration risk does present a concern for investors, with 10 clients representing two-thirds of the business. But I think Celestica’s strong position in the AI and data centre market makes it an attractive option for investors seeking growth and value in the technology sector to consider.
The post 2025: a great opportunity for investors to get rich and work towards a second income? appeared first on The Motley Fool UK.
But here’s another bargain investment that looks absurdly dirt-cheap:
Like buying £1 for 31p
This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
More reading
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James Fox has positions in Advanced Micro Devices and Celestica Inc. The Motley Fool UK has recommended Advanced Micro Devices and Nu Holdings. 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.
