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

0:04Looking back at some of the stock market darlings of 2025, this is Motley Fool Money.

0:20Welcome to Motley Fool Money. My name is Tyler Crowe, and today I'm joined by longtime contributors Matt Frankel and Jon Quast. The end of the year is sneaking up on us pretty quick, and there's some sort of instinctual feel as investors to look back at the year as December rolls around and takes 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 2026? Normally, we like to do some analysis of companies, a little bit of a reaction to things in the news, but we're going to change it up a little bit on this theme of looking back.

1:00We'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.

1:39So, let's start off on an 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 are its opportunities twice as strong as they were when we started this year? That really narrowed it down. I'll do somewhat of a contrarian take here. 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.

2:20They had a rough few years in 2022 to 2024, but we're really starting to see things come together right now. 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 is finally hitting its loss ratio targets. 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. It's well below that over the past 12-month period. This isn't just because of seasonality or anything. That's over a year.

2:55Lemonade's now cash flow positive, and they expect to be EBITDA break-even by the end of 2026. Another thing I wouldn't have believed I was saying a couple of years ago. 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 specifically, and we'll do this with all the companies we're talking about here. I've sniffed at Lemonade a couple of 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.

3:26I 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 ratio losses. This is where you include all the operating expenses. It has very high customer acquisition costs that lead to gap losses and maybe not cash losses because use some stock-based compensation. Can Lemonade really achieve 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?

4:03Well, sure. That's a big reason why they're not EBITDA profitable yet, is because of that acquisition cost. A couple of things. One, as they build their ecosystem, I mentioned the car insurance product. The car insurance product 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 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.

4:40So, 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 as well. But when we looked at this list here, 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 is that. This is a computer memory product business.

5:17It's often a good idea to avoid a commoditized business in a cyclical industry. Micron is both of those things. Yet, I do believe that the stock is up for very good reason in 2025. I believe many investors still don't grasp how much longer current business trends can play out. 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 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 enough supply for 2027 either, broadly speaking.

6:05These 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, but margins could, I believe, hit all-time highs during this trend. 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.

6:50This 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 play? For example, when I think of NVIDIA and AMD, the headline AI names, do you think of Micron as the value to their growth, or is that 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, 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.

7:37But 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 its part of the AI infrastructure build-out 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 build outs 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.

8:15They 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, so the panel will follow the trajectory of the sun during the day. They've also branched out into other utility scale components for solar installations, whether that be structural elements, electrical wiring and harnesses, power converters, software for power output optimization, and even got a cool new thing with 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 it looks nice on an investor presentation.

8:54I think we've been doing this for a while. I've been talking solar power quite a bit with some of our stocks on the radar section. 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. For all the headaches that Solar Panel creates with 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. The speed to scale up power production is the fastest you're going to see.

9:35I think those 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've got a founder-led business that'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 20X earnings, which seems pretty reasonable. Yeah, Tyler, I love this idea. One of the reasons that I love it is because there are so many things that are stretching our power grid to the max.

10:09And 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 NextTracker have any sort of advantage or emote 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. It's hard to really gain any sort of real distinct competitive or technology advantage, other than just good execution, good sales team, good products, easy to use, things like that.

10:53You'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 presenting solutions to your customers that are going to reverberate well and just continue to execute on that. So far, NextPower has done that. And if it can And can you 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 might not do so well next year. Hey, ich bin der Sparfuchs von sparsim.de. Du bist verliebt in dein Smartphone, aber dein aktueller Handy-Tarif ist eher so toxische Beziehung?

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12:08of. 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 as a theme here, because I'm doing another energy stock and the one that I picked out was Oklo, ticker O-K-L-O-L-K-O, or sorry, O-K-L-O, very similar to the company name. Now, I don't want to come across as like 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.

12:46I was just talking about it with solar. I get that in theory, Oclo's approach of using a liquid sodium reactor that U.S. researchers at the Argonne National Lab developed back in the 1960s. It could be a faster way to deploy nuclear power because they're smaller, they're less complex. However, it's still a theoretical idea. One of the reasons that this particular reactor never got off the ground in the first place is because it took so long, the world came up with slightly better solutions. That's my biggest question with Oclo into 2026 and beyond. They want to do a lot of things. They want to design, they want to build, they want to operate.

13:24It's something nobody else in the power industry has 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 think that's going to come from nuclear. That all makes 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.

13:59We hear these$100 billion CapEx 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. I think it's going to push out nuclear in a large way because 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.

14:27You can go live with solar and with gas today. You look at companies like GE Vernova making natural gas turbines, even Caterpillar is talking about using gas turbines and diesel turbines as ways to power data centers right now. That's where they're going. I'm really hard to imagine 10 years from now, all these data centers will be like, well, we built all this gas and solar power, but now that nuclear is ready, let's spend all the money to switch to nuclear. I just don't see that happening. In the short to medium term, it's going to be those types of power sources that are going to make it happen.

15:02With nuclear power and all the big fad trends, one of the big ones so far has been quantum computing. 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 QBTS. There are several similar ticker symbols in this space. I want to make sure I get the right one down here. This stock is up more than 230 % this year. What is D-Wave Quantum? It's a quantum computing company. It really adamantly pounds the table that it was the first with commercial viability. It sold a quantum computer or something like a quantum computer in 2011.

15:43By 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 D-Wave's own financial report, most recently its bookings are down. So 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.

16:18And 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 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 of a ways off. And then when it comes to the outlook for 2026, what it means is we're up in 2025 based on sentiment. That can easily flip. That can easily flip right back in 2026 because it's not really built on the fundamentals here.

16:56And that's normal in stocks. Fear and greed always teeter and tottering back and forth. And so I say this is on shaky ground for 2026. 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 is, you know, has a commercial viability in the nearer term? or is this all very much a wait and see sort of thing?

17:34Yeah, I believe that we're really far out for the real practical things that quantum computing 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 1 million qubits 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 degrees.

18:12D-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 qubit 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?

18:50I 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, but I think this might be it. But I'm going to go with Opendoor, ticker symbol O-P-E-N, the real estate iBuyer. 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. Opendoor has more than quadrupled this year. It's up by 10X since its summer lows. It wasn't that long ago when Opendoor's management was essentially throwing in the towel and planning a reverse split in a lot of ways.

19:22Now investors seem very bullish. A hedge fund manager named Eric Jackson gave a 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 developing AI tools, the fact that all of its competitors are gone, specifically Zillow and Redfin from the iBuying industry. He makes 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. To be fair, if the real estate market does have some sort of inflection point, it could produce a temporary boost of the stock.

19:58They need a good real estate market. There's a lot that needs to go right for Opendoor's 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 iBuying at scale? What are the things that investors should look for? Chris Hilliard, getting your cost structure a lot lower. That's really the big issue. Companies like Opendoor, 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.

20:34They'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. 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. It's about quickness. There's a lot to it, but it remains to be seen if it is possible. Coming up on the break, we'll do maybe not stock doubles, but certainly stocks on our radar. In January of 1915, Ernest Shackleton's ship, Endurance, became encased in the ice in the Weddell Sea.

21:10Through determination, grit, and savvy, Shackleton would lead his men through a brutal winter, then over hundreds of miles of Antarctic ice, followed by 800 miles across some of the roughest waters in the world. It is one of the most extraordinary and inspirational journeys in the history of exploration. Find this story and many others at the Explorers Podcast, available wherever you get your podcasts or at explorerspodcast.com. For stocks on the radar this week, I'm going to go with MCOR, really sticking with the electricity and AI infrastructure build out here. The ticker is EME. This is one of the nation's largest electrical, mechanical, and HVAC contractors.

21:48Yeah, 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 build out phase. This is a company that I think is the second largest contractor behind Quanta Systems. They're more like utility scale power. These, MCOR is the company that's going into data centers, they're going into, you know, EV electrical manufacturing facilities, 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.

22:27I 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. There is tons of money that's going to have to be deployed in this particular part of the build-out for AI. Next couple of years, it looks like MCOR is going to benefit incredibly well for 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 that it has in front of it for the next couple of years, it looks pretty reasonable. Yeah, I'm going to go with Disney.

23:02Not just because they announced the deal with OpenAI 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 has 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 steal.

23:36The OpenAI deal is just a bonus for me. Yeah, Matt, I'm going with MercadoLibre today. That is ticker symbol M-E-L-I. 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. 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, MercadoLibre announced that it's partnering with Agility Robotics to test AI humanoid robots in one of its facilities.

24:11Maybe it's nothing, but maybe it's the first step for greatly improved logistics financials. So in my view, MercadoLibre's competitors are still trying to figure out how to do logistics in Latin America. Meanwhile, MercadoLibre might be having that all figured out and moving on to efficiency. I think that this is the name to own in Latin America. I think this might be the second or third time you may have had MercadoLibre stocks on the radar this year? Yeah, let's say yes. We got MercadoLibre, Disney, and MCOR to round out this week. That's all the time we have for today. Matt, John, thanks for sharing your thoughts.