Motley Fool Money - Over 300 Stocks Doubled in 2025 -- 3 We Love and 3 We Don't

Starting point is 00:00:00 Looking back at some of the stock market darlings of 2025, this is Motley Full Money. Welcome to Motley Fool Money. My name's Tyler Crow, and today I'm joined by longtime contributors, Matt Frankel and John Quast. The end of the year is sneaking up on us pretty quick, and kind of like, I don't know, there's some sort of instinctual feel as investors to look back at the year as December rolls around and take stock, if you will, don't mind my pun, of the stock market darlings of 2025. What did well? What didn't? What's worked and what could work again in 26? So, normally, we like to do some analysis of companies, a little bit of a reaction to, you know, things in the news, but we're going to change it up a little bit on this theme of looking back,

Starting point is 00:01:00 and we're going to look at some of the companies that did incredibly well in 2025, specifically companies that actually saw their stocks double in this year to date as of our recording here on December 11th. Now, we can't do all of it because there was more than 300 companies that more than doubled this year. So what we did is we each picked one stock that we think will continue to do incredibly well in 2026 despite the large run-up this year. And at the same time, we're also going to pick one of that list that had a great year, but 2026, we're not so certain about. And of course, we'll finish out the show with stocks on our radar because maybe they didn't double, but we like them anyways. So let's start off on a

Starting point is 00:01:41 optimistic note here in 2026 and the companies that we saw do incredibly well in 2025 and what will do well next year. Matt, kick us off. Yeah. So, I mean, well, first, the fact that we've had 326 public companies double or much more in some cases is pretty remarkable. One thing that I asked when looking at this list is, is the business or arts opportunities twice as strong as they were when we started this year? And that really narrowed it down. I'll do somewhat of a control. prairie intake here because I can't, two years ago, I wouldn't have believed I'm saying this. But I'm going to go with Lemonade, ticker symbol, LMND, the insurance technology company that had

Starting point is 00:02:20 a rough few years in 2022 to 2024, but we're really starting to see things come together right now. And although it is, to be fair, still a pretty speculative company. The 114% rally so far this year is well-deserved. The company's top-line growth is not only growing, but accelerating. The company's finally hitting its loss ratio target. Lemonade aims to keep a loss ratio, which is the claims that it pays out as a percentage of its premiums collected of 75% or less. And it's well below that over the past 12-month period. So this isn't just because of seasonality or anything. That's over a year. Lemonade is now cash full of positive, and they expect to be EBITDA break-even by the end of 2026. Another thing I wouldn't

Starting point is 00:03:00 have believed I was saying a couple years ago. And as their car insurance product continues to ramp up, there is a lot of potential upside here still to come. Matt, I want to ask a follow-up question about Lemonade's specifically, and we'll do this with all the companies we're talking about here. I've sniffed at Lemonade a couple times. The loss improvements or loss ratio improvements are really nice. The thing that really sticks with me a little bit and loss ratios, there was also a mild year in terms of weather-related disasters. I think for all insurance companies, we'll keep that in mind. I'm putting that in the we'll see bucket for 2026. My question is combined

Starting point is 00:03:33 ratio losses. This is where you include all the operating expenses. It has very high customer acquisition costs that lead to, you know, gap losses and maybe not cash losses because use some stock-based compensation. Can Lemonade really achieve like that gap profitability and reasonable growth rates without these really high customer acquisition costs? That's the thing that I keep looking at and be like, can they scale down that acquisition cost and deliver profitability and growth? Well, sure. That's a big reason why they're not EBITDAB profitable yet is because of that acquisition cost. And I mean, a couple things. One, as they kind of build their ecosystem, I mentioned the car insurance product. The car insurance product

Starting point is 00:04:17 brings in roughly 10 times what the average renter's insurance policy does, which is their flagship product. So they're not spending 10 times as much to get an auto insurance customer. So as the bigger, more profitable types of insurance kind of build out, that should start to take care of itself. That is part of what they're factoring into their profitability targets for the end of this year. So I think that we're going to see that continue to head in the right direction. It certainly has over the past few years, but you are right that it has been a very mild weather year. As a Florida homeowner, I'm very happy for that, but it's something to watch going forward. John, I know you're in the Florida area, too. I'm sure you enjoyed the mild hurricane season

Starting point is 00:05:00 as well. But when we looked at this list year, what was the stock that really popped out for you? Well, one of the larger market cap companies on this list was Micron Technology, and ticker symbol, MU, with that. This is a computer memory product business. And it's often a good idea to avoid a commoditized business in a cyclical industry. Micron is kind of both of those things. And yet, I do believe that the stock is up for very good reason in 2025. And I believe many investors still don't grasp how much longer current business trends can play out. So, here's what's interesting. Because of AI and some of the present needs, memory products, the demand for memory products is just skyrocketing. Micron itself has already sold out for

Starting point is 00:05:50 2026. And there are some reports out there that are already saying between all of the major players out there, which includes Micron, Samsung, and SK Hynix, there won't be a enough supply for 2027 either, broadly speaking. These are things that can keep the profit margins very high in the past. These players have all kind of been trying to balance supply and demand so that they don't see their profit margins erode away. But right now, the demand is beyond what the three combined can even make. So it's very interesting and very different from past cycles that we've seen in the computer memory space. And it's one reason why I think that, well, not only has Micron already sold out its supply for perhaps the next two years,

Starting point is 00:06:35 but margins could, I believe, hit all-time highs during this trend. And so right now, trading at 15 times its forward earnings, that's not bad. And especially if this trend lasts for longer than what investors believe it will. And so this is very interesting right now, and one that I'm still optimistic on in the coming year. John, how do you think of Micron in terms of an AI, like an AI play. Like, for example, when I think of like Nvidia and AMD, you know, the headline AI names, do you think of

Starting point is 00:07:05 Micron kind of as like the value to their growth? Or is that kind of how you think of it? That's a really good question, Matt. It's not quite how I think about it. Let me answer it like this. If you're bullish on Nvidia here or AMD, for that matter,

Starting point is 00:07:21 you're still expecting this AI trend and the build out of the infrastructure to last at least a couple more years. And I can see why you would prefer Nvidia over AMD or AMD over Nvidia perhaps, because they're very similar in what they do. But if you're bullish on either Nvidia or AMD, I believe that you need to be bullish Micron as well, because what they are supplying to, it's part of the AI infrastructure

Starting point is 00:07:48 buildout, is just as important as what the other companies are providing. So I think it's a both. If you're bullish on the GPU component, you need to be bullish on memory. I feel like a trend here. We're talking about either like AI empowered companies or AI buildouts to companies here in the ones that'll do well in 2026. And I went in the same direction. It leaves me going last. I want to discuss Next Power. The company's name, Ticker, excuse me, is NXT. They recently changed its name. It used to be called Next Tracker, which kind of gives away what they do. Their primary business is building tracking equipment for utility scale solar installations.

Starting point is 00:08:25 so the panel will follow the trajectory of the sun during the day. And they've also branched out into other utility scale components for solar installations, whether that be like structural elements, electrical wiring and harnesses, power converters, software for power output optimization, and even got a cool new thing with like some remote AI powered field monitoring robots. They look really cool. I don't know how much of an actual business it is yet, but looks nice on an investor presentation. I think we've been doing this for a while.

Starting point is 00:08:56 I've been talking solar power quite a bit with some of our stocks on the radar section, and this fits into that theme as well. I think so many people are looking at other power sources to fuel data centers. Of all of them, solar is the fastest right now to deploy at scale relative to anything else. And for all the headaches that solar panel creates with like intermittency of power and grid strain, which is a real thing that we, don't talk about as much with solar power. They are still extremely cheap electrons, and the speed to scale up power production is the fastest you're going to see. I think those

Starting point is 00:09:35 are going to be incredibly valuable traits over the next several years of the AI build-out, while we're all still waiting for the miracle that is these other next generation types of power sources that we don't have. From a company perspective, we got a founder-led business. It's been profitable since going public. You don't see that much in the solar industry. nice balance sheet and the stock, even though it doubled, it's still trading for right around 20 times earnings, which seems pretty reasonable. Yeah, Tyler, I love this idea. And one of the reasons that I love it is because there are so many things that are stretching

Starting point is 00:10:07 our power grid to the max. And I think for investors, a really important thing to consider is how can we do more with what we already have and tracking the sun with the solar panels, I think, is a great way to just maximize what infrastructure we already have. But my question for you is solar tracking tech in my mind seems pretty easy to replicate. And I'm just curious, does Next tracker have any sort of advantage or a moat here? Look, if I'm going to be really honest with myself and scrutinize, they don't. These types of components, there are companies that are in it.

Starting point is 00:10:41 It's hard to really gain any sort of real distinct, like competitive or technology advantage, other than just good execution, good sales team, good products, easy to use, things like that, you're never going to just automatically win in these sort of spaces, much like any type of product manufacturing that you have. It's the idea of just being, presenting solutions to your customers that are going to reverberate well and just continue to execute on that. So far, Next Power has done that. And if it can continue to do that, I think it's going to do incredibly well. And that brings us to most of the companies we saw doing well. And coming up after the break, we're going to look at great 2025 stocks that we think

Starting point is 00:11:21 might not do so well next year. If you're early in your career and looking for insight, inspiration, and honest advice, listen to the Capital Ideas podcast, hear from Capital Group professionals about leaning into the differences that make you unique, making decisions that last, and what it means to lead with purpose. The Capital Ideas Podcast from Capital Group, available wherever you listen, published by Capital Client Group, Inc. Okay, talking about not so great companies for 2026 that did well this past year.

Starting point is 00:11:49 We're going to go snake draft style. So I'm going to go first this time. I think there's a lot of companies on this list. I think you, me, and a lot of other people have seen. It might be a little dubious of. There's some one-time gainers we might never receive again. But for me and the things I've been looking at in this show and what you might detect is a theme here because I'm doing another energy stock.

Starting point is 00:12:10 And the one that I picked out was Oclo. And ticker O-L-L-K-O, sorry, O-K-L-O, very similar to the company name. Now, I don't want to come across as anti-nuclear. I do wish that we could make nuclear a bigger part of the mix. It's just practical realities of nuclear in general have been so hard in the United States that it's making it really challenging. I think the two primary reasons for nuclear in general are cost and time to deploy. I was just talking about it with solar. And I get that in theory, Oclo's approach of using a liquid sodium reactor that U.S. researchers at the Argon National Lab developed back in the 1960s. It could be a faster way to deploy nuclear power

Starting point is 00:12:53 because they're smaller, they're less complex. However, it's still like a theoretical idea. And one of the part of the reasons that this particular reactor never got off the ground in the first place, because it took so long, the world kind of like came up with slightly better solutions. And that's my biggest question with ACHLO into 2026 and beyond is, you know, they want to do a lot of things. They want to design. They want to build. They want to operate. It's something nobody else in the power industry's ever done. And with that, my concern is it will take so long for them to get up to speed that all of these power-hungry data centers aren't going to wait around for the right solution. That might be 10 years out from now. They want the right now solution. And I don't

Starting point is 00:13:34 think that's going to come from nuclear. That'll make sense. As someone who's lived near a nuclear reactor that's been under construction for about 10 years now, I can tell you firsthand that it takes forever. But I think we both agree that there's going to be a massive need for power for all this AI infrastructure. We hear these $100 billion, you know, KAPX and things like that from all these companies. What do you think is going to be the near-term solution? Do you think it's all these solar stocks you're talking about? Do you think it's wind? Do you think it's something else? I think right now, and I think I've mentioned this before, but to me it's going to be solar and natural gas. And I think it's going to push out nuclear in a large way because these people

Starting point is 00:14:12 People aren't going to build data centers and then just wait and twiddle their thumbs until nuclear power is ready 10 years from now. They're going to want these things to go live. You can go live with solar and with gas today. You look at companies like GE-Vernova making natural gas turbines, even caterpillars talking about using gas turbines and diesel turbines as ways to power data centers right now. That's where they're going. And I'm really hard to imagine like 10 years from now, all these data centers would be like, well,

Starting point is 00:14:40 we built all this gas and solar power. But now that nuclear is ready, let's switch to spend all the money to switch to nuclear. I just don't see that happening. And so in the short to medium term, it's going to be those types of power sources that are going to make it happen. With nuclear power and kind of all the big fad trends, one of the big ones so far has been quantum computing. And, John, the one you've been looking at for this particular exercise is in the quantum computing space. Yeah, for sure, Tyler. The one I'm looking at right now is D-Wave Quantum, ticker symbol, Q,

Starting point is 00:15:12 BTS. There are several similar ticker symbols in the space. I want to make sure I get the right one down here. This stock is up more than 230 percent this year. And what is D-Wave Quantum? It's a quantum computing company. It really adamantly pounds a table that it was the first with commercial viability. It sold a quantum computer or something kind of like a quantum computer in 2011. By that definition of commercial viability that it had a sale, I mean practically every single quantum computing company out there is commercially viable. They all have revenue. Most of them have revenue. The question is whether or not they're practical and whether or not enterprises are actually adopting them. And I believe that for the most part, the numbers say no. And so according to

Starting point is 00:15:55 D-Wave's own financial report, most recently its bookings are down. So these are recent orders made by customers. And then its remaining performance obligations are also down. And that's a little bit further out of what it still has to deliver on the contracts it's already announced. And so, granted, there's going to be choppiness. I get that. A single deal here, we are talking about very small numbers, so a single deal could flip it back to growth. But for right now, it's been kind of commercially viable for a long time, and there

Starting point is 00:16:24 aren't really anything in the bookings and RPO trends that say its customers are interested today in adopting the technology. To me, that still points that we're still too far, but ways off. And then when it comes to the outlook for 2026, what it means is we're up in 2025 based on a sentiment. That can easily flip, that can easily flip right back in 2026 because it's not really built on the fundamentals here. And that's normal in stocks.

Starting point is 00:16:50 Fear and greed, always teeter and tottering back and forth. And so I say this is on shaky ground for 26. But the breakthroughs or perpetrated breakthroughs that, like, D-Wave and many of the other quantum companies appear to be, you know, it seems like they're much further away. and more or less, the things that they're doing are somewhat unpredictable on who's actually going to be the winner in this space? In terms of investing in quantum technology, do you see anything that has a commercial viability in the near term?

Starting point is 00:17:22 Or is this all very much a wait-and-see sort of thing? Yeah, I believe that we're really far out for the real practical things that quantum computer might be able to do. and I would say just look at, I think we can all agree that Alphabet's Google is among the leaders in quantum computing. Even if you don't think it's the leader, it's among the leaders for sure. And according to Google's timeline, basically a quantum computing company needs to make, connect, and control at least one million cubits to have something that's really useful, really practical. Make connect and control. Right now, most of these players are dealing in the hundreds of qubits, and they can only connect and control them to varying,

Starting point is 00:18:02 degrees. D-Wave, its most ambitious computer, the Advantage 2 says that it has 5,000 qubits. Still, I mean, you could double that every single year and you're still more than five years away from a million cubic system. And so I think that there's just a lot of hope with this space, but I think we're still a ways off before people are actually using quantum computing for normal things. So we have looked so far at some pretty hyped up things, nuclear power. 10 years out, quantum computing, five years out. Matt, are you continuing our theme of things that are way out in the future we haven't quite actually figured out yet? I think so, and I think that you're kind of on the same page with me. It's rare that we're equally bearish on a stock,

Starting point is 00:18:47 but I think this might be it. I'm going to go with Open Door, ticker symbol, O P-E-N, the real estate I buyer. And to be clear, I think in 30 years, this is how we're going to be buying and selling houses. The real estate market needs disruption. Just no one's really figured out the right way to do it yet. Open Door is more than quadrupled this year. It's up by 10x since its summer lows. It wasn't that long ago when Open Doors management was essentially throwing in the towel and planning a reverse split in a lot of ways. Now investors seem very bullish. A hedge fund manager named Eric Jackson gave 100x call on the stock, laid out a big thesis that some of it was a little far-fetched, some of it made a lot of sense about the company

Starting point is 00:19:26 developing AI tools, the fact that all of its competitors are gone, specifically Zillow and redfin from the eye buying industry, you make some decent points. But the reality is that outside of an abnormally strong real estate market in 2021, we're yet to see if this model can be profitable at scale. So, to be fair, if the real estate market does have some sort of inflection point, it could produce a temporary boost of the stock. They need a good real estate market. There's a lot that needs to go right for Open Doors' current market cap to be justifiable. Matt, you've invested in real estate. You know this space very, very well. What do you think that it would take for one of these companies to be successful in

Starting point is 00:20:06 eye buying at scale? What are the things that investors should look for? Get your cost structure a lot lower. That's really the big issue. It costs companies like Open Door. It costs them a lot right now. They don't automate enough of their business. They're holding their homes for an average of over 100 days in a lot of cases. They're paying interest on those, because they're borrowing money to buy these homes. They're paying interest for that 100-day holding period. Their selling costs aren't what they need to be. I mean, the new CEO took over and essentially said this company's got too many employees and too much infrastructure and we need to automate a lot more. So it's about cost structure,

Starting point is 00:20:44 it's about quickness. There's a lot to it, but it remains to be seen if it is possible. Coming out on the break, we'll do maybe not stock doubles, but certainly stocks on our radar. The old adage goes, it isn't what you say, it's how you say it, because to truly make an impact, you need to set an example and take the lead. You have to adapt to whatever comes your way. When you're that driven, you drive an equally determined vehicle, the Range Rover Sport. The Range Rover Sport blends power, poise, and performance. Its design is distinctly British and free from unnecessary details, allowing its raw agility to shine through.

Starting point is 00:21:19 It combines a dynamic sporting personality with elegance to deliver a truly instinctive drive. Inside, you'll find true modern luxury with the latest innovations in comfort. Use the cabin air purification system alongside active noise cancellation for all new levels of quality and quiet. Whether you prefer a choice of powerful engines or the plug-in hybrid with an estimated range of 53 miles, there's an option for you. With seven terrain modes to choose from, terrain response to fine-tuned your vehicle for the roads ahead. The Range Rover event is on now. Explore enhance offers atrangeover.com. For stocks on the radar this week, I'm going to go with MCOR.

Starting point is 00:21:55 really sticking with the electricity and AI infrastructure buildout here. The ticker is EME. This is one of the nation's largest electrical, mechanical, and HVAC contractors. Yeah, doesn't that sound like an exciting business? But I promise you, this is one of the more compelling investments. I think in terms of that pick and shovels AI buildout sort of phase. This is a company that, I think it's the second largest contractor behind Quanta Systems. And they're more like utility scale power. M-Core is the company that's going into data centers, though, going into EV-electrical manufacturing facilities,

Starting point is 00:22:35 semiconductor facilities. They're the ones that are actually doing a lot of the build-out of the electrical, the mechanical, and all the cooling that you see that needs to be installed in data centers. I think I saw a study one time where 55% of the cost of a data center these days is related to the HVAC electrical mechanical. So there is tons of money that's going to be, to be deployed in this particular part of the buildout for AI. And the next couple of years, it looks like MCOR is going to benefit incredibly well for

Starting point is 00:23:04 this. The stock is, I would say, reasonably-ish valued compared to most electrical contractors. It might be a little expensive, but I think with the growth prospects it has in front of it for the next couple of years, it looks pretty reasonable. Yeah, I'm going to go with Disney. And not just because they announced to deal with Open AI this morning to bring their characters onto their video creation platform. The theme parks are a cash machine. They just are. The cruise line has excellent momentum. It's never been a stronger time for the cruise business, and Disney's

Starting point is 00:23:33 really gone aggressive on that. They're making some really interesting moves in streaming that could boost profitability long term. Who knows? You mentioned the Warner Brothers Netflix deal. Disney could be one of the two streamers left before too long. Simply put, this is a collection of assets and intellectual property that valued at 16 times earnings is an absolute steel. So the Open AI deal is just a bonus for me. Yeah, Matt, I'm going with Mercado Libre today, and that is ticker symbol M-E-L-I. And I know that listeners are probably sick of hearing us talk about this company. But let me tell you, this company is just that good.

Starting point is 00:24:07 You got growth, you got competitive advantages. The valuation, okay, that's a contentious debated subject. But I think it's a great valuation at 30 times its operating income. But let's talk about something we haven't talked about before, and that's autonomy. So earlier this week, Mercado Libre announced that it's partnering with agility robotics to test AI humanoid robots in one of its facilities? Maybe it's nothing. But maybe it's the first step for a greatly improved logistics financials.

Starting point is 00:24:34 So in my view, Mercado Libre's competitors are still trying to figure out how to do logistics in Latin America. Meanwhile, Mercado Libre might be having that all figured out and moving on to efficiency. So I think that this is the name to own in Latin America. I think this might be the, is this the second or third time you may have had Mercado Libreiberi of stocks on the radar this year? Yeah, no, let's say yes. So we got Mercado Libre, Disney, and M-Corps to round out this week. And that's all the time we have for today.

Starting point is 00:25:03 Matt, John, thanks for sharing your thoughts. As always, people on the program may have interest in the stock they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy stocks based solely on what you hear. All personal finance content follows Motleyful editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes. only. To see our full advertising disclosure, please check out our show notes. Thanks, producer Dan Boyd and the rest of the molecule team. For Matt, John, and myself, thanks for listening,

Starting point is 00:25:32 and we'll chat again soon.

Motley Fool Money - Over 300 Stocks Doubled in 2025 -- 3 We Love and 3 We Don't

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.