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If I Could Only Buy 2 Stocks in the Last Quarter of 2025, I'd Pick These | The Motley Fool

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  Published in Stocks and Investing on Tuesday, October 28th 2025 at 10:32 GMT by The Motley Fool
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A Look Back at Q3 2025

The author starts by framing the quarter as a pivotal one for growth stocks, noting that the technology sector was propelled by a confluence of factors: the continued expansion of artificial intelligence (AI) applications, supply‑chain recovery, and a shift in consumer behavior toward higher‑end devices and cloud services. According to the article, tech giants posted double‑digit revenue growth, with Apple and Nvidia each reporting year‑over‑year earnings that eclipsed analyst expectations.

The piece includes a quick glance at the broader market performance, comparing the S&P 500’s 9 % rise to the 12 % climb of the technology index. That outperformance underscores the sector’s outsized role in the rally. It also serves as a backdrop for the author’s central thesis: out of the many high‑performing stocks, only two can be singled out as the most compelling from a fundamentals and growth perspective.

Apple: Resilience and Innovation

Apple is highlighted for its ability to maintain robust growth even as the overall market becomes more volatile. The author cites the company’s Q3 earnings release, which showed a 12 % increase in revenue—mainly driven by iPhone sales in China and a sharp rise in services revenue. Apple’s share price surged 15 % during the quarter, the fastest single‑quarter gain for the company in 2024.

Key points the article makes about Apple:

• Diversified Revenue Streams: Apple’s services segment—encompassing iCloud, Apple Music, and the App Store—has expanded its contribution to overall revenue, providing a more resilient base against hardware cyclicality.
• Supply‑Chain Efficiency: Despite the global chip shortage, Apple successfully secured contracts with multiple suppliers, ensuring a steady stream of components for upcoming product releases.
• Strong Cash Position: With an operating cash flow of $25 billion in Q3, Apple has ample runway to invest in new technologies or return capital to shareholders through dividends and share repurchases.
• Innovation Pipeline: The company’s rumored next‑generation iPhone, expected to launch early next year, is projected to leverage 5G and advanced AI capabilities, positioning Apple to capture a larger share of the premium smartphone market.

The article also notes that analysts are forecasting a 7 % year‑over‑year growth for Apple’s services business, and that the company’s margin expansion is likely to continue as it further integrates its hardware and software ecosystems.

Nvidia: The AI Powerhouse

Nvidia’s inclusion in the two‑stock shortlist is largely due to its dominant position in the AI hardware market and its ability to capitalize on the rising demand for GPUs in data centers and autonomous vehicles. In Q3 2025, Nvidia reported a 19 % rise in revenue, largely fueled by its Data Center segment, which saw a 25 % growth rate.

Highlights from the article on Nvidia:

• AI-Driven Growth: Nvidia’s GPUs have become the de‑facto standard for training and inference in large‑scale AI models. The company’s revenue from AI workloads is projected to double over the next 12 months.
• Strategic Partnerships: The article references Nvidia’s partnership with leading cloud providers, such as Amazon Web Services and Microsoft Azure, to offer accelerated AI services to enterprises. These collaborations are expected to drive further demand for Nvidia GPUs.
• Expansion of the Jetson Platform: The author discusses Nvidia’s Jetson edge‑AI platform, which is seeing increased adoption in autonomous vehicles and industrial IoT solutions. This diversification reduces the company’s reliance on the data center segment.
• Financial Health: Nvidia’s Q3 cash flow of $12 billion underscores its capacity to fund R&D, make strategic acquisitions, and reward shareholders through dividends and buybacks.

The author cites a linked Motley Fool piece on Nvidia’s 2025 outlook, which delves deeper into the company’s AI roadmap and its potential to lead in next‑generation computing platforms.

Selecting the Winners: Criteria and Rationale

Throughout the article, the author explains the criteria used to narrow the field to just two stocks:

1. Consistent Revenue Growth: Both companies displayed strong year‑over‑year revenue increases, a hallmark of companies that are likely to sustain momentum.
2. Robust Profit Margins: Apple and Nvidia have maintained healthy operating margins, which is a sign of operational efficiency and pricing power.
3. Innovation Pipeline: Each company is investing heavily in future technologies—Apple in AI‑driven consumer devices and Nvidia in AI hardware—positioning them to capitalize on forthcoming market trends.
4. Resilience to Macro‑Economic Headwinds: The companies are relatively insulated from interest‑rate hikes and inflationary pressures due to their high‑margin products and strategic customer base.

By using these benchmarks, the author argues that Apple and Nvidia are the two stocks most likely to outperform the rest of the market in the coming quarters.

Takeaways for Investors

The article ends with a practical take‑away for readers. The author encourages investors to focus on companies that have demonstrated both strong current performance and a credible plan for sustained growth. Apple and Nvidia are presented as exemplar models: companies that have built diversified, high‑margin businesses and are positioning themselves at the forefront of emerging technology trends.

The piece also cautions readers that, while these two stocks offered superior returns in Q3 2025, past performance does not guarantee future results. Investors should assess their own risk tolerance, portfolio diversification goals, and time horizon before making investment decisions.

In sum, the article provides a concise but comprehensive overview of why Apple and Nvidia stand out in the tech‑heavy environment of Q3 2025, offering readers a clear framework for identifying winners in a crowded market.