S&P 500 Dipped in December: 1 Growth Stock to Buy, and 1 Artificial Intelligence (AI) Stock to Sell

S&P 500 Performance - The S&P 500 gained 25% in 2024 but ended the year with a 3.3% drop in December [1] - The index currently trades at a P/E ratio of 25.1, which is a 38% premium to its long-term average of 18.1 [1] Sea Limited Overview - Sea Limited is a Singapore-based company operating in e-commerce, digital entertainment, and digital financial services [3] - Sea stock surged 175% in 2024 but remains below its 2021 peak [3] Sea Limited's E-commerce Segment - Shopee processed 2.8 billion orders in Q3 2024, with half of Asian orders delivered in two days or less [4] - Shopee's faster delivery strategy aims to reduce cost-per-order and increase customer purchase frequency [4] Sea Limited's Digital Financial Services - SeaMoney has over 24 million active customers and recorded $4.6 billion in outstanding loans at the end of Q3 2024, a 73% YoY increase [5] - SeaMoney provides loans to Shopee sellers and offers buy now, pay later services to consumers [5] Sea Limited's Digital Entertainment Segment - Garena's Free Fire was the most downloaded mobile game globally in Q3 2024, averaging over 100 million daily active users [6] - The segment struggles to match 2021 revenue levels due to reduced pandemic-related gaming activity [6] Sea Limited's Financial Performance - Wall Street forecasts Sea Limited's 2024 revenue at $16.5 billion, a 27% YoY growth, accelerating from 4.9% growth in 2023 [7] - E-commerce is expected to drive most of the revenue and growth, while digital entertainment revenue may decline [8] Sea Limited's Valuation - Sea stock trades at a P/S ratio of 4.1, significantly below its long-term average of 9.4 [9] - The stock would need to more than double to return to its average P/S ratio [10] Snowflake Overview - Snowflake stock fell 18% in 2024 despite the S&P 500's strong performance [11] - The company focuses on its Data Cloud and AI initiatives, including Cortex AI [11][12] Snowflake's AI Products - Cortex AI integrates large language models from companies like Anthropic and Meta Platforms [12] - Snowflake Copilot and Document AI are tools designed to accelerate software development and extract data from unstructured sources [13] - 3,200 of Snowflake's 10,618 customers were using its AI products as of Q3 fiscal 2025 [13] Snowflake's Financial Performance - Snowflake's fiscal 2025 product revenue is projected at $3.4 billion, a 29% YoY increase, down from 38% growth in fiscal 2024 and 70% in fiscal 2023 [14] - The company lost $958 million in the first three quarters of fiscal 2025, a 43% increase from the same period in fiscal 2024 [15] Snowflake's Valuation - Snowflake trades at a P/S ratio of 15, making it more expensive than Microsoft, Amazon, and Alphabet [16] - The stock fell over 10% in December 2024, three times the S&P 500's decline [16]