10 Hottest Mega-Cap Stocks of 2025

1. Arm Holdings plc (NASDAQ:ARM)

ARM Holdings has taken off this year, gaining 10% in a single day to end the week at a high. The company continues to benefit from a unique business model that is at the heart of chip-making technologies of various semiconductor companies.

ARM spent just 6% of its last quarter’s revenue on CAPEX. It makes money by licensing its chip designs as well as royalties from chip sales. This also allows it to record a stable financial performance through passive recurring revenues. In an industry that is otherwise very capital intensive, ARM’s business model helps it survive downturns while benefiting from the good times.

As these good times are expected to continue in 2025, the company’s strong positioning will continue to make it a solid semiconductor bet. Investors would still want to keep an eye on technological developments though. It faces an existential threat from an open source architecture called RISC-V. Qualcomm, which only last month won a licensing dispute against ARM, is actively pursuing this technology, so volatility is expected as this technology develops.

As expected, the hottest stocks for 2025 are almost all beneficiaries of the Artificial Intelligence revolution. The revolution is only just getting started and investors and analysts alike expect a year of great technological advancements ahead.

While we acknowledge the potential of ARM as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as ARM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.