These high-quality shares are effectively positioned to surge in 2025.
The U.S. inventory market posted a stellar efficiency in 2024, with the benchmark S&P 500 index reaching an all-time excessive closing worth of 6,090.27 on Dec. 6.
But issues might flip even higher in 2025. According to Charles Schwab, based mostly on 14 rate of interest cycles since 1929, the S&P 500 index has posted optimistic returns 12 months from the primary price minimize within the cycle 86% of the time. The benchmark index posted unfavourable returns after price cuts in 2001 and 2007, attributed primarily to the recessionary setting.
In September 2024, the Federal Reserve commenced the continued price minimize cycle by decreasing benchmark rates of interest by 50 foundation factors. Subsequently, for the reason that present financial setting doesn’t seem recessionary, it might be prudent to count on the index to proceed rising until September 2025. Many analysts appear to agree with this projection. UBS expects the S&P 500 to succeed in 6,400, whereas Oppenheimer Asset Management’s chief funding strategist, John Stoltzfus, expects the index to succeed in 7,100 in 2025.
Against this backdrop, it is sensible for retail buyers to choose up small positions in high-quality inventory driving secular tailwinds. Here’s why these two firms picks match the invoice.
1. Oracle
When investing in database software program and cloud providers shares, Oracle (ORCL -1.10%) is an apparent alternative. The firm’s second-quarter fiscal 2025 top- and bottom-line efficiency missed consensus estimates by a slight margin (for the interval ended Nov. 30). Despite this, the corporate’s distinguished position within the ongoing AI revolution and its power in conventional databases make it a worthwhile decide in December 2024.
Oracle’s cloud providers and licensing help income accounts for nearly 77% of the corporate’s whole income. The cloud enterprise is anticipated to rake in $25 billion in income in fiscal 2025. Oracle’s prominence in offering synthetic intelligence (AI)-optimized knowledge heart infrastructure is the primary issue fueling the expansion of its cloud enterprise. The firm’s Oracle cloud infrastructure is utilized by main AI firms akin to Nvidia, Meta Platforms, xAI, OpenAI, and Cohere to coach their most vital generative AI fashions.
Oracle can be centered on additional bettering the efficiency of its cloud infrastructure and lately launched the most important and quickest supercomputer on the planet, which makes use of as much as 65,000 Nvidia H200 GPUs. This efficiency benefit has made Oracle cloud infrastructure sooner and cheaper than many competing infrastructure clouds, serving to it win massive AI coaching workloads. The firm’s GPU utilization additionally jumped by a surprising 336% yr over yr within the second quarter.
Oracle differentiates itself from many different cloud infrastructure gamers with its distinctive cloud structure. The firm has opted for a modular design strategy the place solely six standardized knowledge racks are wanted to construct a cloud area that gives all providers to shoppers. The firm can simply scale the info heart infrastructure from 50 kilowatts to 1.6 gigawatts according to the demand cheaply and effectively. The standardization in racks and providers has additionally helped Oracle successfully deploy automation instruments in its cloud infrastructure.
Oracle has additionally established a broad geographical footprint with 98 cloud areas. The firm has entered into multi-cloud agreements with Microsoft‘s Azure, Alphabet‘s Google Cloud, and Amazon‘s AWS, which additional permits clients excessive flexibility to deploy their methods within the cloud.
Admittedly, Oracle doesn’t appear to be the most popular inventory on Wall Street. However, the corporate lately was buying and selling at simply 8.43 instances trailing-12-month gross sales — higher than the software program business median price-to-sales (P/S) ratio of 10.4. As multiples increase according to sturdy progress, Oracle might even see vital share value features within the coming months.
2. MongoDB
The second database specialist value investing in is MongoDB (MDB -7.42%). Although the corporate managed to handily beat consensus income and earnings estimates within the third quarter of fiscal 2025, shares have tanked on surprising information of longtime CFO and Chief Operating Officer Michael Gordon leaving on the finish of January 2025. The subsequent value correction has introduced a wonderful entry alternative for retail buyers.
MongoDB added almost 1,900 new clients sequentially and ended the third quarter (ended Oct. 31) with a complete buyer depend of greater than 52,600. Furthermore, the corporate catered to 2,314 high-value clients (these producing at the least $100,000 in annual recurring income) within the third quarter, up from 1,972 clients in the identical quarter of the prior yr.
Atlas, a cloud-native and built-in suite of database instruments and providers, accounts for almost 68% of MongoDB’s whole income. The cloud platform’s income grew 26% yr over yr within the third quarter, pushed by sturdy adoption by enterprises for operating mission-critical initiatives. Atlas catered to greater than 51,100 clients on the finish of the third quarter, up from over 44,900 in the identical quarter of the prior yr.
MongoDB is specializing in reallocating a few of its go-to-market assets from mid-market to massive enterprise channels. While the funds’ reallocation from the mid-market phase to the enterprise channel is anticipated to cut back the tempo of direct gross sales buyer progress within the brief run, it ought to drive larger income progress in the long term.
MongoDB makes use of AI instruments {and professional} providers to modernize clients’ legacy purposes. Since many of those purposes are based mostly on relational databases, the corporate additionally deploys a relational migrator emigrate them to MongoDB’s platform (appropriate for paperwork and different complicated knowledge buildings). This modernization reduces value, time, and danger of information loss or corruption. Hence, MongoDB sees a stable long-term progress alternative within the legacy software modernization market.
Finally, MongoDB can be poised to profit from enterprises more and more specializing in AI-powered purposes, which principally require querying complicated and wealthy datasets. The firm says its unified platform strategy (combining supply knowledge, metadata, operational knowledge, and vector knowledge) is superior to utilizing a number of complicated databases.
Considering its a number of progress tailwinds and powerful financials, MongoDB appears a compelling purchase now.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of administrators. Suzanne Frey, an govt at Alphabet, is a member of The Motley Fool’s board of administrators. Randi Zuckerberg, a former director of market growth and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of administrators. Manali Pradhan has no place in any of the shares talked about. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, MongoDB, Nvidia, and Oracle. The Motley Fool recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure coverage.
