Bank of America has highlighted a range of stocks, including Nvidia, as having significant potential upsides in 2025. Recently, the firm pinpointed several buy-rated stocks that investors should consider adding to their portfolios as we approach the new year. Among these recommended picks are the semiconductor giant Nvidia, the financial tech company Block, Cadence Design Systems, Chevron, and East West Bancorp.
Wall Street analysts, including Jason Kupferberg from Bank of America, are particularly enthusiastic about Block. They see it as a promising US-centric growth story poised to outperform. A rise in cryptocurrency prices is anticipated to provide additional support for the company. Kupferberg noted that while 41% of Block’s revenue is from Bitcoin trading, this contributes only 3% to its gross profit. The company stands to gain from an improving macroeconomic climate and a more favorable regulatory landscape expected with the upcoming change in the White House administration. Kupferberg added that Block is likely to benefit from a stronger US small to mid-sized business environment. He mentioned that the management has provided some preliminary guidance for 2025, which combines healthy top-line growth with profitability. Year-to-date, Block shares have risen nearly 16%, and Kupferberg confidently cites it as the top payments choice for 2025.
East West Bancorp is another key recommendation, with analyst Ebrahim Poonawala suggesting it’s well-positioned for success in the coming year. Poonawala believes East West Bancorp offers one of the most appealing risk/reward profiles for investors looking to capitalize on accelerating loan growth. He emphasized that the bank has some of the strongest capital levels among its peers, ensuring resilience in the face of potential economic downturns. With shares up 33% in 2024, Bank of America sees room for further growth in 2025.
Cadence Design Systems is another standout on their list. Analyst Vivek Arya, impressed by the company’s management, has become increasingly optimistic about Cadence’s future. The company has been expanding its digital portfolio, and it’s now engaged with all 20 of the top semiconductor companies, a significant jump from engaging with just two historically. Arya increased his price target for Cadence’s stock from $310 to a new high of $365 per share, with shares up by 10% in 2024. He sees Cadence as a solid, defensive option, leveraged to consistent R&D and subscription-driven AI spending, as opposed to the more unpredictable nature of hardware and capital expenditure-driven semiconductor markets.
Chevron also figures prominently in Bank of America’s projections for 2025, being identified as a pivotal year for the company due to several catalysts. Key areas of focus include operations in the Gulf of Mexico, Tengizchevroil, partnerships with Hess, and initiatives in refining and biofuels, as well as ventures in Venezuela. Bank of America reiterates its buy recommendation for Chevron, marking it as a top pick for 2025.
Finally, Nvidia is expected to experience a dual trend year in 2025. In the first half, the company is poised to maintain momentum in AI semiconductor investments, driven primarily by US cloud service clients. In the second half, interest may pivot towards less saturated auto and industrial chip suppliers, spurred by inventory restocking and a potential uptick in automotive production, assuming a global economic recovery.
Overall, these companies offer diverse opportunities for investors looking to navigate the evolving landscape of 2025.
