3 Red-Hot Growth Stocks to Buy in 2025

TSM +1.53% UBER +1.16% GOOG +0.29%

Key Points

• Taiwan Semiconductor is the common denominator in the AI chip race.

• Alphabet's strong AI execution has flipped the narrative surrounding the stock.

• Uber's rampant earnings growth has kept a lid on the stock's valuation.

• 10 stocks we like better than Taiwan Semiconductor Manufacturing ›

It's often tempting to chase the hottest stocks because it feels better to buy something going up than those that keep going down. That can sometimes backfire, especially when stock valuations start hitting nonsensical levels.

However, there are times when a hot stock may be ripping higher for good reason. That's where Taiwan Semiconductor Manufacturing (NYSE: TSM), Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), and Uber Technologies (NYSE: UBER) find themselves today.

These red-hot growth stocks are each up between 45% and 69% in 2025. Yet there could still be room to run. Here is why these highfliers are still strong buys in late 2025.

1. Taiwan Semiconductor: Up 47% in 2025

There's little doubt that artificial intelligence (AI) is the hottest story on Wall Street this year. Taiwan Semiconductor Manufacturing Company, or TSMC, is the world's leading chip foundry. It manufactures many of the chips that companies such as Nvidia design and sell into AI data centers.

The stakes are incredibly high for these AI chip companies. They're overwhelmingly choosing TSMC for its cutting-edge manufacturing abilities and high-production capacity, making TSMC the ultimate pick-and-shovel stock for the AI industry. TSMC has actually increased its market share lead over the past few years, from 63% to 71%.

As long as TSMC retains its dominance in the foundry industry, it doesn't matter which chip goes into which data center, only that TSMC is producing them. With AI investments soaring, analysts expect TSMC to grow its earnings by an average of nearly 29% annually over the next three to five years. That growth makes the stock a bargain at just 28 times 2025 earnings estimates.

2. Alphabet: Up 69% in 2025

Wall Street once viewed AI as an existential threat to Google Search -- Alphabet's golden goose and moneymaker -- due to the billions of high-margin advertising revenue the search engine generates. My, how things have changed. Alphabet has infused AI into Google Search, and advertising revenue continues to grow at a double-digit rate.

Since releasing its Gemini 3 AI model to high praise, Alphabet has become one of the hottest AI stocks. Additionally, the company trained it on its own custom TPU AI chips -- so well, in fact, that Meta Platforms has inquired about using them for its own data centers in the future. Beyond that, Alphabet boasts additional AI upside in its Waymo autonomous ride-hailing business, which continues to expand.

You might guess that Alphabet's meteoric rise would balloon the stock's valuation. While Alphabet may no longer be a red-hot deal, the tech giant still trades at a reasonable price for long-term investors. Shares trade at a price-to-earnings ratio (P/E) of 30, using 2025 earnings estimates, which is a fair price for a top AI company that analysts anticipate will grow earnings by over 15% annually in the coming years.

3. Uber Technologies: Up 45% in 2025

It appears the market is still debating whether self-driving vehicle companies, such as Waymo and Tesla's robotaxi, will supplant Uber Technologies as the world's leading ride-hailing company. In theory, if Uber's vehicles need drivers and a competitor's don't, it can undercut Uber's price and take its market share.

However, it's not that simple, because autonomous driving is still in its early stages. Robotaxi is barely out of the starting block. Even Waymo, despite its impressive progress, still pales in comparison to Uber's size and scale.

Plus, Uber isn't sitting idle. The company has partnered with automotive brands and Nvidia to develop its own autonomous fleet. Meanwhile, Uber continues to demonstrate its financial prowess with highly profitable growth.

The stock has risen by 45% since January, yet Uber still trades at under 14 times its 2025 earnings estimates. Analysts estimate that Uber's earnings will grow at a long-term compound annual rate of 31%.

Uber's future is a little less certain than you might like until the company clearly solves the autonomous driving threat. Fortunately, such a fast-growing market leader trading at such a low valuation suggests that the stock price more than compensates for the risks involved.

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Justin Pope has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Nvidia, Taiwan Semiconductor Manufacturing, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.

3 Red-Hot Growth Stocks to Buy in 2025 was originally published by The Motley Fool