Growth stocks can be a powerful driver of long-term wealth, especially when backed by companies that dominate their industries. While market volatility can sometimes shake investor confidence, strong businesses with lasting competitive advantages will continue to thrive. The three stocks on this watchlist, Amazon (AMZN), MercadoLibre (MELI), and Home Depot (HD), are poised for continued growth and represent smart opportunities for investors looking ahead to 2025. Let’s take a closer look at why these stocks are worth considering.
MercadoLibre (MELI)
The e-commerce leader in Latin America with massive fintech potential
MercadoLibre, the leading e-commerce and fintech company in Latin America, is an unstoppable growth stock that continues to deliver strong results despite economic challenges in the region. In Q2, MercadoLibre saw a 20% increase in gross merchandise volume year-over-year, or 83% on a currency-neutral basis.
This region still heavily relies on cash, meaning there’s tremendous growth potential for MercadoLibre’s digital payment platform. The company serves over 500 million people, and the e-commerce market is still underpenetrated, giving it a long runway for growth. Additionally, MercadoLibre’s fintech arm, which offers digital payments and credit services, is growing even faster than its core e-commerce business.
With total revenue increasing by 42% year-over-year to $5.1 billion in Q4 and net income more than doubling, this stock continues to outpace the S&P 500 with a 32% gain in 2024. As Latin America transitions further into digital banking and e-commerce, MercadoLibre is in a prime position to capture market share and continue delivering outsized returns.
Home Depot (HD)
Positioned to benefit from the housing market recovery
Home Depot is well-positioned to capitalize on a potential recovery in the housing market as mortgage rates show signs of cooling. With Americans holding record levels of home equity, many are looking to reinvest in home improvement projects, which directly benefits Home Depot. The company’s performance has been sluggish in the wake of rising mortgage rates, but as rates drop, demand is expected to bounce back, especially with a shortage of millions of homes across the country.
Furthermore, Home Depot’s acquisition of SRS Distribution earlier this year expanded its addressable market by $50 billion, strengthening its ties with professional contractors. While Home Depot trades at a price-to-earnings ratio of 27, its highly leveraged business model means profits could soar as the housing market rebounds, setting the company up for significant gains by 2025.
Amazon (AMZN)
Profitability is piling up for this e-commerce giant
Amazon has been a true wealth-building machine for long-term shareholders. Even after more than two decades of explosive growth, this tech titan shows no signs of slowing down. In 2024 alone, the stock has doubled, largely driven by Amazon’s strong business diversification, including its e-commerce, cloud computing (Amazon Web Services), and digital advertising segments.
Amazon’s trailing-12-month revenue hit a whopping $604 billion in Q2, up 12% year-over-year. Operating profit nearly doubled during the same period, showing how the company is prioritizing operational efficiency. Amazon’s AI integration, particularly through its generative AI shopping assistants, could be a game-changer for enhancing the online shopping experience, further driving growth.
With its free cash flow more than doubling over the last five years to $48 billion, Amazon remains a financial powerhouse. Its long-term growth prospects, paired with management’s commitment to lowering costs and boosting profitability, make it a smart addition to any portfolio for 2025 and beyond.