3 Red-Hot Growth Stocks to Buy in 2025

Key Points

• Broadcom has an enormous opportunity with custom AI chips.

• Meta Platforms is using AI to drive ad growth and has some intriguing emerging bets as well.

• Microsoft's partnership and investment in OpenAI have put it in a prime position to continue to grow.

• 10 stocks we like better than Broadcom ›

The market's obsession with artificial intelligence (AI) isn't fading, and the technology could help reshape how businesses operate in the future. As such, it could be a smart move to invest in some of the top companies leading the AI charge.

Let's look at three red-hot growth stocks to buy this year.

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1. Broadcom

Broadcom (NASDAQ: AVGO) is best known as a networking hardware company, but the bigger story is how it has become the go-to name for custom AI chips.

As companies try to save money on AI computing costs, more and more are turning to Broadcom to help them develop custom chips, called ASICs, that can reduce inference costs. While ASICs are non-programmable, and thus lack the flexibility of graphics processing units (GPUs), they tend to have better performance and more efficiency for the specific task for which they've been designed.

Broadcom scored a huge victory when it helped Alphabet develop its highly successful tensor processing units (TPUs), which now power a lot of its Google Cloud business. This opened the door for more design wins with Meta Platforms (NASDAQ: META) and TikTok owner ByteDance. Combined, Broadcom believes these three customers have the potential to be a $60 billion to $90 billion opportunity by its fiscal 2027.

And the company got even more good news when it announced a fourth customer (largely believed to be OpenAI) has placed a $10 billion order for next year. Add in that Broadcom is also working with Apple on its own custom AI chips, and the opportunity in front of it is just huge.

On top of that, Broadcom's networking gear is also seeing greater demand as data centers need to move huge AI workloads at high speed. In addition, its VMware virtualization business is seeing strong momentum, as enterprise customers are turning to its solutions to help run a hybrid cloud strategy to power their AI workloads.

2. Meta Platforms

Meta Platforms has gone from being written off as a slow-growth social media stock to one of the biggest AI winners. The company figured out how to use AI to keep users glued to Instagram and Facebook by feeding them more of the content they want to see, which in turn creates more ad slots to sell. That simple dynamic powered a 22% jump in ad revenue last quarter, driven by both more impressions and higher ad pricing as advertisers get better returns.

The exciting part is that Meta is just beginning to serve ads on WhatsApp and Threads. WhatsApp alone has 3 billion users and is barely monetized today. Threads, meanwhile, is still in its infancy and has a long runway of growth.

At the same time, CEO Mark Zuckerberg is not pulling back on big swings, pouring billions into AI talent and infrastructure to build what he calls "personal superintelligence." He's also pushing the company into consumer smart glasses and is still building his metaverse. If any of these bets hit, they could move the needle in a big way over the next few years.

The combination of strong current growth together with potential upside from new products is exactly what makes Meta a stock a buy.

3. Microsoft

Microsoft (NASDAQ: MSFT) proved with AI that it can still move quickly when it sees a big opportunity. Its early investment and partnership with OpenAI gave it a head start rolling out Copilot AI assistants across its Office suite, and that has turned into a meaningful new revenue stream.

That said, the bigger story is with its cloud computing unit, Azure. Cloud revenue surged 39% last quarter and likely would have been even higher if not for running up against capacity limits. The company has been pouring capital into GPUs and servers to meet that demand, which is helping fuel strong growth. Azure has become the go-to platform for companies that want both the most advanced AI models and newest infrastructure to run their AI workloads on.

Meanwhile, Microsoft's investment in OpenAI continues to give it preferred access to the company's strong AI technology.

With productivity tools that are deeply embedded in the corporate world and a cloud platform that is on the rise, Microsoft is one of the few tech giants that has both sides of the enterprise AI opportunity covered. That combination puts it in a good position to see strong growth both this year and beyond.

Should you invest $1,000 in Broadcom right now?

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Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Meta Platforms, and Microsoft. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.