Where To Invest in 2025: Insights From eToro’s Market Experts

We asked our analysts to consider the investment trends which could come into play in 2025 and predict which stocks look set to benefit from changes in market dynamics. These are the regions, sectors, and individual stocks they forecast will come out on top over the next 12 months.

Mati’s Top Pick for 2025

For some time, China has been a happy hunting ground for investors and 2025 sees a new range of factors coming into play which make the iShares China Large-Cap ETF (FXI) a target for those looking to take advantage of forming trends.

Stimulus-Driven Recovery: China’s government is focusing on infrastructure, technology, and consumer spending to reignite economic expansion, providing a strong tailwind for Chinese equities.

Sector Growth Opportunities: The stimulus will likely benefit key sectors such as renewable energy, technology, and consumer goods, which are heavily represented in the ETF.

Attractive Valuations: After years of underperformance, Chinese stocks are trading at attractive single digit valuations vs high double digits for some of their peers in the US, offering a compelling entry point for investors looking to capitalise on the country’s rebound.

Risk Factors: A potential US-China trade war under a Trump presidency poses risks. Any new US tariffs would make Chinese products more expensive in the key US export market and suppress consumer demand. Even the mere threat of tariffs can be expected to increase price volatility in Chinese assets, making risk management more difficult, however Mati believes that China is better prepared to manage that risk than in the past.

Mati Ben Alon, Editor-in-Chief, eToro

Lale’s Top Pick for 2025

Shifts in the macro environment in China and strong underlying business fundamentals make Alibaba (BABA) a top pick for those investors with an eye for undervalued stocks.

Attractive Valuation: One of the cheapest and most oversold plays in the e-commerce sector, BABA has an attractive forward P/E ratio of 8.31 compared to peers like Amazon (35.09) and is sitting on net cash of about 25% of its market value.

Growth Potential: The firm holds a 42% share of the e-commerce market in China and is using the cash flow that comes from such a dominant position to expand into cloud-computing and AI products.

Macro Support: Recent policy measures such as cuts in China lending rates look set to kick-start the Chinese economy and encourage a move by domestic investors into risk-on assets. It also gives Alibaba room to potentially boost its share price through stock purchases and share buybacks.

Risk Factors: The suggested introduction of tariffs by incoming US President Donald Trump could distort the global macro environment and outweigh the benefits of the planned stimulus measures. Interest rates remaining higher for longer would also negatively impact consumer sentiment.

Lale Akoner, Asset Management Analyst and Market Strategist, eToro

Javier’s Top Pick for 2025

The energy sector continues to attract investor attention and there are reasons why Endesa (ELE.MC) is the stock which could potentially outperform the peer group.

Attractive Valuation: Endesa stock has been trading at a discount to peers according to P/E ratio and other valuation metrics such as EV/EBITDA. That could push the stock up while maintaining a strong dividend profile. The low x1.8 ND/EBITDA ratio supports increased shareholder returns in the form of dividends or share buybacks.

Growth Outlook: Endesa’s balance sheet could support CAPEX of up to €4bn, but even without that taking place, the company is already predicting significant growth. It forecasts a 4% EBITDA CAGR (€5.6–€5.9bn) and a 7% net profit CAGR (€2.0–€2.2bn) by 2027.

Transition Leader: Regulatory changes brought in during 2024 will lead to greater grid modernisation as renewables are integrated into an expanding network. Endesa’s strong balance sheet leaves it well positioned to play a key role in Europe’s continuing decarbonisation.

Risk Factors: Any downturn in the macro outlook for the global economy would make matters worse for Endesa’s customer base and impact the firm’s revenues. It would come at a time when European industrialists and consumers are already dealing with energy costs which are relatively high on a global scale.

Javier Molina, Capital markets & Digital Assets Analyst, eToro

Neža’s Top Pick for 2025

Neža believes that small-cap stocks could shine in 2025 as innovation and niche market opportunities fuel their growth. The iShares Core S&P Small-Cap ETF (IJR) offers a way to track the sector and gain exposure to growth stocks in industries such as biotechnology, clean energy, and specialised technology.

Hidden Gems: While big companies dominate the spotlight, the fact that small caps can go unnoticed — can result in them being undervalued in terms of share price. There are “hidden gems” to be found by investors willing to dig deeper, particularly where smaller companies are focused on growth.

Macro Outlook: Historically, small caps tend to perform better when economies recover. They’re more sensitive to improving conditions such as consumer spending or easier access to capital. Neža expects the macro outlook to continue to improve and even if factors such as interest rates remain suboptimal, a return to relative normality should help to stabilise investor sentiment and encourage interest in higher growth sectors.

New Trends: Neža believes small caps offer a chance to tap into markets where innovation happens first. With their ability to grow faster and take advantage of trends such as AI and green energy, they could be some of the biggest winners in the coming years.

Risk Factors: It can take time for undervalued stocks to become accepted and appreciated by the wider market. When that happens, impressive returns can be posted, but until then, there is an opportunity cost associated with capital tied up in positions which are taking time to develop. Small-cap and growth stocks are positioned at the riskier end of the investment spectrum and some might never reach their full potential.

Neža Molk, Analyst, eToro

Jakub’s Top Picks for 2025

Jakub believes that eToro’s BigTech Smart Portfolio (@BigTech) will benefit as the AI revolution gathers even more momentum in 2025. Share prices of large-cap firms could be driven up by advances in artificial intelligence models and the technology finding a greater number of uses across the wider economy.

Power and Speed: The rapid development of AI models is expected to drive demand for high-performance chips and support infrastructure. While everyone races to make the best model, the companies selling the hardware, such as chips, servers, and networking equipment, will be the real winners.

Power of Scale: Major technology firms are uniquely positioned to capitalise on the AI revolution, leveraging their scale, data dominance, and R&D and investment capabilities. The Mag7 is sitting on a massive pile of cash ready to be deployed. Competition both within the USA and between the US and China will drive demand.

AI to Boost Efficiency: The integration of AI across industries is showing more and more potential to not only lower costs, but also drive additional revenue for firms, thanks to SaaS offerings, advertising, and advisory services.

Risk Factors: A slow-down in the expansion of AI can’t be ruled out and could potentially leave big-tech cash cows such as data centres at risk. The advantage of investing in larger firms is that they have the balance sheets and experience of how to ride out short-term blips and post long-term gains.

Jakub Rochlitz, Analyst, eToro

Bogdan’s Top Picks for 2025

Insurance giant Allianz (ALV.DE) has seen its stock price start to form an upward trend. With the stock still trading below the previous all-time highs, it offers potential for both capital growth as well as impressive dividend returns.

Price Gains and Dividends: Allianz, a heavyweight in the DAX, contributed significantly to the index’s performance in 2024 with a 21.3% increase in share price. The stock stands out as a reliable dividend payer, offering a yield of 4.71% (€13.80 payout in 2024).

Attractive Valuation: With a forward P/E ratio of 11, the stock is attractively valued compared to the DAX average of 18. An EBITA margin of 15.7% highlights the company’s strong operational efficiency.

Headroom for Further Price Rises: Despite its positive performance in 2024, the stock remains 17% below its all-time high from 2000. From a technical analysis perspective, the next key support level is at the August 2024 low of €238.

Risk Factors: Natural disasters and global economic uncertainties could significantly impact the business. Not only do they result in high insurance payouts, but consequential increases in premiums make insurance more expensive and that can lead to reduced demand for the products Allianz provides.

Bogdan Maioreanu, Analyst, eToro

Jean-Paul’s Top Pick for 2025

Jean-Paul van Oudheusden sees little reason to look past NVIDIA (NVDA) as the firm continues to be a main beneficiary of the world’s massive spend on AI in 2025, a trend that shows little sign of abating.

Strategic Positioning: Like TSMC (TSM) and Arm Holdings (ARM), NVIDIA provides a “picks and shovels” approach for investors looking to gain exposure to the AI race.

Strong Growth Forecast: Demand for NVIDIA’s products seems unstoppable in 2025 and 2026, allowing the company to add $4 billion in revenue per quarter on average.

Monetising its Market Leader Position: NVIDIA’s gross profit margins exceed 70%. If that remains the case, the stock price could potentially reach $200 in due course, which would imply a market cap of $5 trillion.

Risk Factors: In 2025, investors’ attention may shift from hardware to software: whoever the winners in that subsegment will be is less clear. That risk comes into play at a time when stock valuations have been front-running actual revenues and profits, which means investors must factor in the possibility of share prices falling.

Jean-Paul van Oudheusden, Analyst, eToro

Antoine’s Top Pick for 2025

Franco-German aircraft manufacturer Airbus (AIR.PA) has benefitted from the setbacks which have afflicted its only competitor, Boeing. But Airbus has also put through internal reforms which make it an attractive investment proposition going into 2025.

Growth Outlook: The expansion of Airbus’ delivery roster and order book is beginning to be reflected in the company’s balance sheet and net profit is forecast to be in the region of €5.5bn (+35%).

Improved Risk Management: The company’s main challenge in 2024 was the control of supply chains. Internal reforms meant that the processing of key components such as Leap engines are now much better controlled by Airbus.

Macro Trends: Air traffic is expected to continue to break records with more than 5bn passenger flights forecast for 2025, a record! Analysts forecast this to be more than a short-term trend with Bain forecasting that by 2030, global revenue passenger kilometers RPK will reach 11.4trn, which would be 136% of 2019 volume.

Risk Factors: Guidance on how many aircraft will be delivered to customers was adjusted through 2024. While most of the current estimates are considered to be on the conservative side, any further adjustments could impact levels of investor confidence. It is also worth factoring in that Boeing’s problems were largely self-inflicted, and reforms at Airbus’ only competitor can be expected to restore confidence in the US rival.

Antoine Fraysse-Soulier, Market Analyst, eToro

This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments.

This material has been prepared without regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Not all of the financial instruments and services referred to are offered by eToro and any references to past performance of a financial instrument, index, or a packaged investment product are not, and should not be taken as, a reliable indicator of future results.

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