3 Hot Tech Stocks Set to Crush the Market in 2025

With several Wall Street indices trading near all-time highs, opportunities to find bargains are becoming increasingly difficult. In some ways, it’s a fun problem, but it’s also a challenge for those considering where to distribute new funds. Ultimately, the stock market is exactly what its name implies – a stock market. Just because some of these stocks are more expensive doesn’t necessarily mean there aren’t still deals to be had.

After an exhaustive search, SentinelOne (S 5.09%), Netflix (NFLX 1.82%)and Sea Limited (SE 0.89%) went to three Fool.com contributors as hot bullish stocks for the coming year.

SentinelOne is performing better in 2024 and may not stop

Justin Pope (SentinelOne): SentinelOne combines cybersecurity and artificial intelligence (AI), two of Wall Street’s hottest topics. The company’s autonomous security platform uses artificial intelligence to deliver cutting-edge protection against cyber threats, earning praise from third-party tests across the industry. The costly consequences of breaches are driving companies to look to state-of-the-art solutions like SentinelOne, resulting in some of the best revenue growth you’ll find on the market.

Not only did SentinelOne grow revenue 33% year-over-year in the second quarter of its fiscal year, which ended July 31, but the company is also making strides toward profitability, which has investors cheering shares and helped them grow by almost 40 years. % in the last year. However, there could be more big returns on the way.

SentinelOne recently announced a deal with Lenovothe world’s largest PC maker, to include its security software on new PC shipments. Since I hit a similar partnership with Dell Technologies last year, CrowdStrike has added over $50 million in revenue so far. Achieving similar results would move the needle for SentinelOne, which analysts estimate will generate $815 million in revenue this year and about $1 billion next year. Those estimates could increase once SentinelOne talks to partner Lenovo in future earnings calls.

With all the good things going on at SentinelOne and its stellar investment returns, the stock may outperform the broader market. SentinelOne’s valuation has become so suppressed over the past few years that it still trades at a lower value-to-sales ratio than high-tech companies including CrowdStrike, Zscalerand Palo Alto Networks. So no, it’s not too late to buy SentinelOne, despite its meteoric rise this year.

The SentinelOne party started in 2024, but I expect this momentum to continue next year.

Netflix can have it has already won the streaming wars

Jake Lerch (Netflix): Up more than 45% year-to-date, there’s no doubt that Netflix is ​​currently a hot stock. However, I think 2025 could be an even better year for the streaming giant. Here’s why.

The streaming wars aren’t over, but it’s clear that Netflix is ​​gaining the upper hand.

For example, According to data compiled by Nielsen during June, streaming video now accounts for about 40% of total TV usage, with cable (27%) and broadcast (20%) trailing far behind.

And when you look at the streaming component, it’s clear who the big winners are. Alphabethis YouTube drive on mode with 9.9% of streaming usage, while Netflix is the second with 8.4%.

The Next the nearest streamers are Amazon‘s Prime Video (3.1%), followed by Disney-owned by Hulu (3%) and Disney+ (2%) and Tubi (2%). Neither of the other major streamers, including Paramount+, ComcastPeacock and The discovery of Warner BrosMax, it exceeds the 2% mark.

In short, Netflix has maintained its competitive edge in the streaming market. Not only that, but the overall streaming market continues to take share away from traditional viewership sources like cable and broadcast.

As a result, Netflix’s fundamentals continue to shine. In its most recent quarter (the three months ended June 30, 2024), Netflix reported year-over-year revenue growth of 17% and operating margin of 27%. Both figures are up significantly from a year earlier.

NFLX Operating Income Data (QoQ Growth) by YCharts

In short, Netflix not only survived a serious challenge to its business model, but also came through the streaming wars stronger than ever. and it is well positioned to build on its past success. 2025 might prove a it should be a great year for Netflix as the company ramps up its ad-level business. The investors it would be wise to consider Netflix now, ahead of what could be a banner year.

Recovery is ongoing in this pandemic stock

Will Healy (Sea Limited): After a brutal sell-off in the 2022 bear market, it may finally be time to return to Sea Limited. The Singapore conglomerate thrived during the pandemic as its retail, gaming and fintech segments served its stranded customer base.

However, conditions turned negative as lockdowns ended and economies reopened. Its former #1 smartphone game, Free Fireit lost some of its popularity after 2021 and was banned in India due to national security reasons. Moreover, instead of investing in logistics in its Southeast Asian markets, where it is the leading online retailer, its retail subsidiary, Shopee, entered markets in Europe and Latin America, where it had no competitive advantage.

All of these factors led to a 91% drop in inventory between fall 2021 and early 2024.

Fortunately for Sea Limited shareholders, Shopee has exited most of its non-Asian markets and invested heavily in logistics infrastructure in its home region. In addition, Free Fire has seen a resurgence in popularity and Garena continues to work with the Indian government to bring Free Fire back to that country.

In addition, fintech arm Sea Money continued to thrive and, in the first half of 2024, was a factor in Sea Limited’s revenue growth of 23% year-on-year to over $7.5 billion.

However, a 73% increase in sales and marketing expenses led to a decrease in net income. Most of this increased spending was on e-commerce investments, while it spent heavily on its Sea Money operations. However, these investments should lead to higher income and profits in the long run.

Investors seem to have embraced the company’s new strategy, as the stock has risen more than 115% in the past year. Also, while lower net income skewed the P/E ratio, the price-to-sales (P/S) ratio of 3.8 isn’t much above a much larger e-commerce conglomerate, Amazon, with sales of 3 ,3 times larger. Considering the stock is still 75% below its 2021 high, such a valuation should position Sea Limited for significant gains in 2025.