In investments, the pursuit of stocks that promise to be gems in the rough is a thrilling endeavor. But how do you identify the stars among the multitude of options? Wall Street’s whispers point us toward three companies. Each harbors secrets that might double your wealth by 2025. These giants are not relying on luck; they’re strategically harnessing hidden strengths that could unlock tremendous stock price growth. Stocks like these make investors believe that there are stocks that could double your wealth by 2025.
The article unravels the fundamental narratives behind these stocks, showing how they’re shaping the future of their industries and potentially doubling investors’ wealth in 2025.
PayPal (PYPL)
To begin with, PayPal’s (NASDAQ:PYPL) active database of more than 300 million SKUs (Q3 2023) of inventory from its merchant partners is a hidden strength. PayPal is harnessing the potential of this data through AI to provide personalized shopping recommendations.
Leveraging data this way may continue to benefit the company through more effective customer targeting and better service offerings. Fundamentally, the effective use of data and AI can lead to increased revenue, improved customer satisfaction and greater efficiency. The market may reward the company throughout the long term based on its ability to extract value from data and deliver tailored experiences, potentially resulting in a positive impact on the stock price.
Additionally, PayPal’s focus on serving approximately 35 million merchant accounts, mainly small and medium-sized businesses (SMBs), is a critical strength. The launch of PayPal Complete Payments and features like package tracking are aimed at helping SMBs transact globally and enhance customer experiences. This focus on SMBs is strategic, as it aligns with the growing e-commerce sector and the needs of businesses. Therefore, catering to SMBs presents an opportunity for PayPal to capture a significant portion of the e-commerce market.
Finally, serving large enterprises, such as Adobe (NASDAQ:ADBE), Booking.com (NASDAQ:BKNG), DoorDash (NASDAQ:DASH), Ticketmaster, and Uber (NYSE:UBER), represents PayPal’s ability to capture a share of the large enterprise e-commerce market. PayPal processed more than $450 billion in volume from an estimated $4 trillion to $5 trillion of global large enterprise e-commerce. This represents approximately 10% of the market, showing PayPal’s strong presence. Overall, expanding services for large enterprises and offering value-added services can drive additional revenue and margin growth.
AT&T (T)
AT&T’s (NYSE:T) customer-centric approach is reflected in its ability to maintain low churn rates, increase average revenue per user (ARPU), and improve returns. This demonstrates that customers are not only staying with AT&T but also opting for higher-value plans, which are not merely promotions. The strength of the company’s network, combined with its straightforward value proposition, plays a pivotal role in retaining and attracting customers. Strong customer retention and growing ARPU may lead to stable and increasing revenues. This favors the company with a loyal customer base and consistent revenue growth.
Additionally, AT&T’s remarkable success in expanding its fiber network. Adding nearly 300K high-quality net customers in a single quarter (Q3 2023), even in muted household move activity, is a remarkable achievement. Fundamentally, the company’s ability to exceed expectations regarding market penetration in new areas and increase the ARPU for fiber services by nearly 9% year-over-year underscores the strength of its fiber expansion strategy. The continuous expansion of the fiber network, the growth in ARPU, and the transformation of Consumer Wireline into a growing business are clear indicators of AT&T’s ability to adapt to evolving market dynamics.
Moreover, AT&T’s efforts to operate more efficiently and streamline its operations are evident in the 1.2% margin improvement in adjusted EBITDA compared to the previous year. The company’s commitment to generating cost savings and optimizing its operations bears fruit. Favorably, the implementation of generative AI leads to measurable improvements in productivity. It also leads to cost savings in various aspects of the business. This stock easily earns its spot on our list of stocks that could double your wealth.
Alibaba (BABA)
Alibaba’s (NYSE:BABA) e-commerce division, represented by Taobao and Tmall Group, has been a stronghold for the company. The “user-first” strategy implemented by the company has yielded positive results in attracting and retaining users. Notably, the Taobao app has seen a 6.5% year-over-year increase in daily active users (DAUs) in Q1 fiscal 2024. The surge in user engagement signifies that more users are choosing Alibaba’s platforms for their shopping needs.
Additionally, the increase in the number of DAUs and the user base’s rapid growth are indicators of Alibaba’s strong positioning in the e-commerce space. User retention and continued engagement are vital for the long-term success of an e-commerce platform. Alibaba’s user-centric approach has played a significant role in fostering customer loyalty.
One of Alibaba’s fundamental strengths is its focus on monetization. The company’s revenue growth is not merely a result of increased user activity but also of improved monetization of its platforms. The number of paying merchants has risen, and merchant spending has grown by 20%, driving revenue up. Merchant confidence in conducting business on Alibaba’s platform has significantly increased.
Lastly, Alibaba’s value-for-money battle represents its focus on delivering cost-effective and high-quality products to consumers. This strategy aims to enhance value for money, encourage business-scale growth, and ensure long-term stable returns. Initial evidence of success was observed in Q1 fiscal 2024, with merchant confidence and spending both rising. If you are looking for stocks that could double your wealth, start here.
As of this writing, Yiannis Zourmpanos held long positions in PYPL, T, and BABA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.