Generating a second income through investing is a goal many aspire to. Immediately achieving significant passive income is challenging without substantial capital to start with. However, I think 2025 presents unique opportunities for investors to build wealth and work towards future income streams.
The US market remains expensive and continues to attract global capital — and suck global capital away from other markets. But savvy investors can find promising investment opportunities everywhere, particularly in advanced technologies.
The rapid advancements in artificial intelligence (AI), quantum computing, biotechnology, and gene editing, to name a few, are creating exciting investment landscapes. The global AI market is projected to compound at around 30% for the rest of this decade. Even better, this technological advancement is also supercharging the pace of global innovation.
For investors looking to capitalise on these trends, diversification is key. A portfolio of well-chosen investments could prosper in 2025 as markets adapt to emerging technologies, shifting economic conditions, and evolving global dynamics.
Success starts in 2025
So, where could investors look for success in 2025? Well, there’s a plethora of opportunities in the US and the UK, as well as elsewhere in the world.
Here are some investment options that rank well on a quantitative basis. Most of these have strong price-to-earnings-to-growth (PEG) ratios. The PEG ratio has traditionally been a useful tool for investors, indicating how expensive a company is relative to its growth forecast.
| 2024 Performance | PEG ratio | |
| Celestica | 231% | 0.88 |
| Gorilla Technology Group | 302% | 0.7 |
| Nu Holdings | 31% | 0.5 |
| IonQ | 264% | N.a. |
| Advanced Micro Devices | -11% | 0.9 |
| Power Solutions International | 1,430% | 0.5 |
| Blue Bird Corporation | 46% | 0.77 |
While past performance and PEG ratios are no guarantees of growth, investors can consider these stocks as potential starting points for building wealth. By putting £500 a month into an ISA and investing in top-rated stocks, investors could put themselves on the path to getting rich and, in the long run, generating a strong second income.
AI can push this stock higher
Celestica (NYSE:CLS) is a compelling investment opportunity in the current AI-driven market, in my view. With a remarkable 231% return over the past year, the stock isn’t short on momentum.
Despite this surge, the company’s valuation remains attractive, trading at 24 times forward earnings with an expected 28% compound annual growth rate in earnings. This results in a favourable PEG ratio of 0.88, indicating potential undervaluation.
Celestica’s success is largely attributed to its Cloud Computing Solutions segment, where the company’s computer hardware has seen increased demand by hyperscalers. Moreover, management’s strategic shift towards higher-margin cloud computing operations has paid off — the CCS segment now accounts for over two-thirds of revenue and grew by 42% in Q3.
Concentration risk does present a concern for investors, with 10 clients representing two-thirds of the business. But I think Celestica’s strong position in the AI and data centre market makes it an attractive option for investors seeking growth and value in the technology sector to consider.
This post was originally published on Motley Fool
