A Top-Performing U.S. Stock That Canadian Investors Really Should Own

Amazon (NASDAQ:AMZN) is starting to run faster in the AI race, making it a top U.S. pick for 2025.

| More on:
Income and growth financial chart

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It’s been a fantastic year for the TSX Index, as it looks to close off 2024 with a gain north of the 20% mark. Indeed, a 20% gain is nothing to complain about, especially for long-term thinkers who’ve felt the pains of the 2022 bear market. And while the Canadian stock market has been shining brightly, the S&P 500 looks poised to outdo it once again, as it eyes a 30% gain for 2024 (that’s close to 3% higher from here). Whether a Santa rally will help make it happen remains one of the big stories in the coming weeks.

Either way, I think the U.S. stocks are worth picking up here as markets look to add to their strengths in 2025. Of course, it’s hard to remember the last time the S&P 500 clocked in gains of 20% or more for two straight years. And while three straight years of such spoils may seem unlikely, I’d argue that anything is possible and that a bearish descent (like the one in 2022) isn’t necessarily a given. Does that mean some stocks aren’t overheated and deserving of skating to the penalty box come 2025?

Though there’s some overexcitement in parts of the tech scene, I’m not so sure investors have become nearly as euphoric as they were prior to the 2000 dot-com bust. With investors taking a bit of profit on some red-hot names this Monday, perhaps some valuable lessons from the internet boom were learned.

Arguably, some U.S. stocks still seem cheap relative to the long-term growth that new artificial intelligence (AI) technologies may have freshly paved. In this piece, we’ll look at one U.S. top performer that I think still has another year of impressive gains in the bag for 2025.

Amazon

Amazon (NASDAQ:AMZN) may have been caught offside when the AI boom began. But in recent quarters, the right steps (or should I say leaps?) have been taken to catch up. Some folks on Wall Street think the e-commerce and web services giant has already caught up on AI. Indeed, it’s a mistake to count Amazon out when it comes to any emerging, disruptive technology that has the potential to open doors to new market share-taking opportunities.

With a sound AI cloud strategy in place, a freshly-upped stake in Anthropic AI, and Jeff Bezos reportedly putting in 95% of his time in AI efforts at the company, I’d look for Amazon to emerge as one of the AI leaders over the next three years.

Undoubtedly, you’re getting a lot of innovation from the name. And I think a 36.9 times forward price to earnings (P/E) ratio is way too cheap a price for the calibre of growth you’re getting with the name at new all-time highs of $226 and change. Amazon stock’s breakout has finally arrived (year to date, AMZN stock is up an impressive 51%), and with new catalysts in place, my guess is that the current leg-up could extend for many quarters to come.

Sure, it’s tough to justify getting just US$0.70 per Canadian dollar. But if you’re serious about upping your AI exposure, I think the trade-off is worth making going into the new year, especially since the loonie could still have further to fall as Canadians worry over tariffs under Trump.

Created with Highcharts 11.4.3Amazon PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Should you invest $1,000 in Canadian Natural Resources right now?

Before you buy stock in Canadian Natural Resources, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canadian Natural Resources wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Joey Frenette has positions in Amazon. The Motley Fool recommends Amazon. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

Stocks for Beginners

Dip Buyers Could Win Big: The Best Canadian Stocks to Buy Now

These two growth stocks have taken hits recently, but their fundamentals remain strong, and their growth prospects are intact.

Read more »

A bull and bear face off.
Stock Market

Bear Market Bargains Emerge as Recession Stocks Return

If you want a deal, then go to the best stocks during a recession market dip.

Read more »

Canadian Red maple leaves seamless wallpaper pattern
Dividend Stocks

5 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These Canadian stocks have paid dividends for decades, making them reliable investments to generate regular passive income.

Read more »

An investor uses a tablet
Stocks for Beginners

The Smartest Canadian Stock to Buy With $250 Right Now

Are you looking for the smartest Canadian stock to buy right now? Consider this gem and avoid market volatility.

Read more »

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Investing

Fortis Just Might Be the Best Canadian Dividend Stock to Buy in April

Let's dive into a few reasons why Canadian utility giant Fortis (TSX:FTS) still looks like a screaming buy heading into…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

a man relaxes with his feet on a pile of books
Investing

Got $7,000? How I’d Spread It Across 5 Blue-Chip Stocks for an Investing Foundation

Spreading $7,000 across these five blue-chip stocks provides a solid foundation for long-term financial success.

Read more »