In 2025, the broader stock market isn’t really thriving. The S&P 500 has had a rough year, though it barely feels like a complete disaster. Just a couple of weeks back, it was flirting with bear market territory, so perhaps things aren’t as bleak as they could be.
That said, we might still face some challenges. With the Trump administration pushing forward its trade initiatives, economic issues could crop up and possibly dampen market performance.
Yet, there are still some companies out there that could be good investment choices, no matter how that shakes out. For instance, Netflix (NASDAQ: NFLX) and Veeva Systems (NYSE: VEEV) are solid examples.
Netflix has been making waves recently, and for good reasons. The stock is climbing annually, financial results appear to be strong, and management believes the company will reap considerable rewards moving forward.
The goal is to join the exclusive club of businesses by 2030. Currently, Netflix boasts a market cap of $522 billion, with an annual growth rate of 13.9%.
Now, it doesn’t feel like an impossible dream, though I have my doubts. Five years back, Netflix ended 2019 with revenues of $20.2 billion. Last year, it jumped to $39 billion, representing a compound annual growth rate (CAGR) of 14.1%.
A lot has shifted since then, mainly due to increased competition in the streaming space. Still, Netflix is adapting, implementing strategies like cracking down on password sharing and rolling out affordable ad-supported tiers. While revenue growth isn’t as rapid as it once was, profit margins and free cash flow have soared in the past five years.
There’s still plenty of room for growth in streaming. Netflix’s potential revenue opportunity is estimated at $650 billion, indicating that streaming hasn’t fully eclipsed traditional entertainment yet.
In the long term, as industry penetration grows, Netflix is well-placed to benefit from its strong brand, network effects, and other advantages. Moreover, the company is leveraging artificial intelligence (AI) to enhance its content strategy—something that’s vital for its continued success.
AI might not be the central focus for Netflix, but it could help in producing better films more cost-effectively. Thus, the aspiration for a trillion-dollar valuation in the next five years seems more plausible than fanciful. Even if things stumble a bit, the stock might still outpace expectations well beyond 2025.
Switching gears to Veeva Systems—it’s not the largest player in the cloud industry; that accolade goes to giants like Amazon, Alphabet, and Microsoft. Yet, Veeva has carved out a niche by providing specialized cloud solutions to life sciences companies, including top pharmaceutical firms like Merck, Novo Nordisk, and Eli Lilly.
The company has positioned itself wisely, developing a variety of cloud services tailored to the strict regulatory demands faced by these industries. Standard solutions just won’t cut it for many clients; that’s where Veeva steps in.
Financially, Veeva is showing promise. Revenue and profits are increasing. The company recently hit its revenue run-rate target of $3 billion ahead of the timeline they initially proposed. And that’s impressive!
Veeva’s management team is indeed reliable, especially in an industry filled with less dependable leaders. There’s still plenty of growth potential, as they estimate a $20 billion addressable market ahead of them.
With $2.9 billion in 12-month revenue and high switching costs, Veeva is likely to maintain its strong foothold in this niche market moving forward. There might be economic headwinds, similar to those faced in previous years, but the company has shown resilience, suggesting that it could continue to yield above-average returns over the next decade.
Before diving into Netflix stock, it’s worth noting that the Motley Fool Stock Advisor team has assembled a list of what they believe to be the 10 best stocks worth investing in right now, and Netflix is noticeably absent from this list. These ten stocks have been highlighted for their potential to deliver significant returns in the near future.
