We recently compiled a list of the 15 Biggest Agriculture Stocks in 2025. In this article, we are going to take a look at where Tractor Supply Company (NASDAQ:TSCO) stands against the other agriculture stocks. We also discuss the increase in technology adoption in the industry to improve operations in agriculture and farming.
The agriculture sector is crucial for food security and economic stability. It extends beyond farm businesses to include other farm-related industries in the United States. According to the Bureau of Economic Analysis, agriculture, food, and related industries contributed over $1.5 trillion to the American economy in 2023, representing 5.5% of the GDP.
The output of farm businesses stood at $222.3 billion, or 0.8% of the GDP. However, economists believe agriculture’s overall contribution is much higher than this figure because numerous players in various sectors rely on agricultural inputs and contribute added value to the economy.
READ ALSO: 13 Best Farmland and Agriculture Stocks To Invest In According to Hedge Funds and 8 Best Fertilizer Stocks To Buy Now.
According to McKinsey, the global food and agribusiness industry is valued at over $5 trillion, and given current trends, this number is expected to rise further. By 2050, caloric demand is projected to grow by 70%, while crop demand for human consumption and animal feed is forecast to soar by at least 100%.
The surge in population worldwide continues to lead to an increased demand for food, necessitating innovative agricultural practices. Recent trends have highlighted a shift toward the adoption of technology in agriculture and farming, which aims to enhance sustainable production.
A 2024 survey by a leading consultancy firm has revealed a growing trend among farmers for technology adoption, with a 3 percent increase since 2022 in farmers who are using or are willing to adopt digital technology to improve operations. North America continues to lead agricultural technology adoption, while Latin America experienced the fastest rate of growth – 10% – between 2022 and 2024.
The United States has the highest rate of technology adoption, with 61% of the farmers using or willing to adopt digital agronomy, and 51% for precision agriculture hardware, while the adoption rate for remote-sensing technologies among American farmers stood at 38%. More than two-thirds of farmers were using or willing to adapt to farm management software. The study also highlighted that large farms were 45% more likely to adopt agriculture technology than smaller farms, citing scale factors to generate positive ROI.
The growing focus on sustainable practices and innovative technologies among farmers to enhance their productivity not only bodes well for the future of the agriculture industry but also presents an opportunity for organizations that provide these technologies to cater to farmers’ diverse needs across different regions.
Methodology
For this article, we sifted through screeners to get a pool of stocks in the agricultural inputs and farm products industries. We also referred to our previous articles on the industry to further enrich our list of stocks. From there, we picked the top 15 companies with the highest market cap, as of the close of the day on Friday, January 31, 2025. The 15 biggest agriculture stocks are ranked in ascending order of market cap.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Tractor Supply Company (NASDAQ:TSCO)
Market Cap: $29.03 billion
Tractor Supply Company (NASDAQ:TSCO) is an American farm supplies company focused on meeting the needs of recreational farmers and ranchers. Its product categories include livestock, pets, equine; truck, tool, and hardware; products for agricultural use; heating, lawn, and garden items, and more.
The company boasts a wide presence across nearly 2,300 locations in the United States. While other retailers sell similar products, Tractor Supply Company (NASDAQ:TSCO) enjoys a competitive edge as its retail stores are located in rural communities and towns on the outskirts of metropolitans, where these products are in high demand. TSCO’s share price has surged by 175% over the last five years, making it one of the best agriculture stocks to buy.
Much of Tractor Supply Company (NASDAQ:TSCO)’s growth last year was driven by new store openings. The company plans on opening another 90 new stores in 2025, which has boosted investor confidence. TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding TSCO in its Q3 2024 investor letter:
Our preferences in the Consumer-oriented sectors lean toward value-oriented or specialty retailers, franchise models, or premium brands. Tractor Supply Company (NASDAQ:TSCO) is engaged in the retail of farm and ranch products. Mixed second quarter results included a miss to same store sales and in-line earnings. We used that share price weakness as an opportunity to add to the position for this differentiated business. Its share price recovered later in the third quarter with an overall 8% gain on news that management plans to open 80 new stores this year and 90 in fiscal 2025.
During its Q4 2024 earnings call on January 30, Tractor Supply Company (NASDAQ:TSCO) declared strong financial results for the full year 2024. Net sales grew 2.2% from last year to $14.88 billion, driven by a 0.2% increase in comparable store sales. Net income was posted at $1.1 billion, translating to record diluted earnings per share of $2.04.
The company also generated a record $1.4 billion in operating cash flow in 2024, which was used to fund attractive business growth opportunities, including the opening of 80 new Tractor Supply stores and 11 Petsense stores. Tractor Supply Company (NASDAQ:TSCO) also returned over $1 billion to its shareholders through dividends and share repurchases in 2024.
TSCO expects net sales to further grow between 5% and 7% in 2025, which has resulted in a bullish sentiment around the company. Wall Street analysts have a consensus Buy rating for the stock with an average share price upside potential of over 10%, making it one of the best agriculture stocks to buy.
Overall TSCO ranks 3rd on our list of the biggest agriculture stocks in 2025. While we acknowledge the potential of TSCO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSCO 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 is originally published at Insider Monkey.
