Title: Three Stocks Poised for a Comeback in 2025
It's been a good year for many investors, but not for every stock. Approximately one-third of U.S. exchange-listed stocks are trading lower in 2024, and some of these laggards could turn into leaders in 2025.
Three stocks that are slightly underperforming this year and could make a comeback are Advanced Micro Devices (AMD), Comcast (CMCSA), and Realty Income (O). Let's dive into these potential bounce-back candidates.
1. Advanced Micro Devices (Down 11% in 2024)
Despite being a significant beneficiary of the AI boom, AMD's stock has struggled in 2024. The company's AI data center segment saw revenue jump 122% in its latest quarter, generating $3.5 billion, which is half of its overall revenue. However, its gaming segment has plummeted 69% over the past year, and its embedded segment took a 25% hit.
Nevertheless, AMD's overall business is still growing at an accelerating pace. The company recorded a 22% increase in the third quarter, which is its strongest top-line jump in two years. Analysts expect AMD's AI business revenue to grow at an impressive 27% in 2025. Profitability has also grown rapidly, more than doubling in the latest quarter, with the weaker segments not impacting the bottom line.
AMD's valuation at 26 times forward earnings may be high, but if it can maintain its growth rate, it could be a bargain. The company is set to release powerful GPUs with RDNA 4 technology in 2025, which should help boost sales and give AMD a competitive edge against Nvidia.
2. Comcast (Down 11% in 2024)
Comcast's stock took a hit in 2024 after warning of losing more than 100,000 broadband subscribers in the current quarter. However, the media giant boasts a strong portfolio of assets, including its hit movie Wicked and theme park Epic Universe, which is set to open in May 2025. Comcast also offers a consistent dividend increase since 2008.
While Comcast's Xfinity cable TV business has been dwindling for years, the company is investing in technologies like 5G and fiber-optic networks to stay competitive. Comcast's acquisition of Sky in 2018 helped expand its international presence and provided new growth opportunities.
The streaming market is competitive, but Comcast has a unique opportunity to capture market share with its blend of cable services, streaming services, and theme parks, making it an intriguing long-term play.
3. Realty Income (Down 2% in 2024)
Realty Income is one of the leading real estate investment trusts (REITs) with a diversified portfolio of 15,457 properties across 90 different industries and a 98.7% occupancy rate. The company's focus on high-quality tenants in recession-resistant industries has helped it maintain a strong performance, even during economic downturns.
Realty Income is known for its consistent dividend growth, offering monthly payments to its investors for over a decade. The REIT is forecasting a 5% increase in adjusted funds from operations for 2025, which bodes well for its dividend growth prospects.
During market volatility, REITs like Realty Income can be a safe haven for investors, offering income stability while allowing them to participate in broader market growth. At 5.6%, Realty Income's dividend yield is even more attractive with interest rates dropping closer to 2%.
To summarize, while there's no guarantee that these stocks will turn their fortune around, the potential upside makes them worth considering for long-term investors who have a high risk tolerance. Advanced Micro Devices' strategic AI processor lineup, Comcast's blend of cable, streaming, and theme park services, and Realty Income's diversified REIT portfolio all have growth drivers that could propel these laggards to the forefront in 2025.
- Investors looking for promising turnaround opportunities might consider investing in Advanced Micro Devices (AMD), despite its 11% decrease in 2024. Analysts predict a 27% growth in AMD's AI business revenue in 2025, which could potentially drive the stock's performance.
- In the realm of finance, Comcast's downward trend in 2024 may present an investment opportunity. Despite a dip due to broadband subscriber losses, Comcast's assets such as Wicked, Epic Universe, and its international presence through Sky offer potential growth prospects for long-term investors.