2 Soaring Stocks With Room to Run in 2025

Core Viewpoint - The stock market has shown strong performance recently, with the S&P 500 index nearing new highs, while certain previously beaten-down growth stocks are beginning to rebound, particularly Alibaba and Roku, which are expected to continue their upward trajectory into 2025. Group 1: Alibaba - Alibaba is China's leading e-commerce company, with its stock up 60% year-to-date, trading at a reasonable price-to-earnings multiple that supports further gains in 2025 [2][6] - Revenue grew 8% year-over-year in the most recent quarter, driven by strong performance in Taobao and Tmall marketplaces [3] - Alibaba is also the leading cloud services provider in China, with cloud revenue growth accelerating to 13% year-over-year, fueled by demand for AI services [4] - The company has significant growth potential in China, with a population of 1.4 billion, and international commerce revenue grew 36% year-over-year [5] - Analysts expect annualized earnings growth of 18%, which could double shareholders' money in five years if the stock maintains its current P/E multiple [6] Group 2: Roku - Roku is a popular streaming service platform with over 89 million households, experiencing a 22% increase in stock price year-to-date [7] - The company primarily monetizes through advertising, which poses challenges for profit margins during economic downturns, leading to inconsistent net income in recent years [8] - Roku's growth is driven by scale, with streaming households growing 12% year-over-year and streaming hours increasing by 18% [9] - Fourth-quarter platform revenue rose 25% year-over-year to reach $1 billion, with the connected TV advertising market projected to grow significantly [10] - Operating losses narrowed from$104 million in Q4 2023 to $39 million in Q4 2024, with management expecting positive operating income by 2026 [11] - The stock is trading at a reasonable price-to-sales multiple of 3.2, indicating potential for growth alongside business expansion [12]