The S&P 500 Just Hit a New High: 2 Stocks to Buy Now, According to These Wall Street Analysts

After a short dive, S&P 500 (^GSPC 0.90%) the bull market is still alive, with the index hitting new highs in September. If you’re interested in putting some money to work in the stock market, you might want to consider it Apple (AAPL 0.50%) and leading video game producer Take-Two Interactive (TTWO 2.73%). Two Wall Street analysts recently issued buy ratings on the stock based on future catalysts. Here’s why these stocks could hit new highs in 2025 and beyond.

1. Apple

Apple Intelligence is launching its much-anticipated beta this month. Investors have started to price in a strong iPhone upgrade cycle, with the stock up more than 16% this year. However, Bank of America analyst Wamsi Mohan rates the stock a buy based on Apple’s opportunity to drive growth in services with artificial intelligence (AI)-based features.

Mohan believes that Apple Intelligence could fuel sales of AI-based apps in Apple’s App Store. The analyst also sees the potential for Apple to monetize this feature with a subscription-based platform as the company develops its AI capabilities over time.

Apple hasn’t offered any specific plans on how it will monetize AI. But Apple Intelligence serves as a powerful new weapon to bolster its walled garden strategy, in which it controls the user experience by designing software and hardware to work seamlessly together. Apple has built a premium brand with this strategy that users are willing to pay for, which allows Apple to generate almost all of the smartphone industry’s operating profit.

Growing service revenue is a key part of Apple’s strategy to deliver returns for shareholders. Services make up more than a quarter of Apple’s business and grew 14% year over year last quarter. Apple has over 1 billion paid subscriptions for all services offered on its platform. Mohan believes that deep integration of the Siri voice assistant with apps could generate an additional $50 billion in revenue over the next decade.

Analysts expect Apple to grow earnings per share by 11% on an annualized basis over the next five years, which may prove conservative if Mohan is right about the monetization opportunity with Apple Intelligence. Services drive much higher margins than hardware, so monetizing AI provides a catalyst for Apple stock over the next decade.

2. Take-Two Interactive

Take-Two is one of the top video game makers with $5.4 billion in revenue. It’s on track to release more games over the next few years to capture more of that opportunity, and Redburn Atlantic analyst Hamilton Faber sees a big one coming out next year that could provide a huge boost to Take-Two’s finances.

Take-Two makes several best-selling franchises, but is best known as the producer of grand theft auto — a long-running series that has sold more than 430 million copies over the past few decades. The next installment is scheduled to be released in calendar 2025.

Faber expects Take-Two’s operating profit to triple over the next few years. This is in line with management’s expectation that the upcoming launch slate will generate “tremendous growth”.

Take-Two has executed a long-term strategy of releasing more games from some of its best-selling properties. This is a low-risk strategy given the established fan bases of annual sports releases such as NBA 2K, PGA 2Kand popular titles such as grand theft auto.

Last release of grand theft auto drove revenue growth past $1 billion in fiscal 2014. But the game has a much larger fan base than it did 10 years ago and could result in significant pent-up demand for the new version. That’s why analysts expect Take-Two to grow revenue by 45% in fiscal 2026 (which ends in March).

Looking ahead to fiscal 2027, the consensus estimate sees Take-Two’s adjusted earnings per share reaching $9.05. The stock is trading at just 16 times the estimate, which could lead to more growth over the next few years.