5 stocks set to thrive in '25

2025 is shaping up to be a promising year for global equities. Despite economic challenges in recent years, investors now find themselves in an environment ripe with opportunities. With moderate economic growth, tempered inflation, and continued innovation across sectors, the upcoming year has set the stage for stocks to gain traction and deliver attractive returns.

Firetrail Investments' approach—actively seeking businesses with durable competitive advantages and focusing on disciplined, valuation-conscious stock selection—aligns well with the current environment. Rather than relying on macroeconomic trends, we zero in on company fundamentals and earnings potential, aiming to capture market-leading returns by investing in companies that can sustain growth and continue to improve their businesses, even amid external challenges. 

Let’s dive into 5 stocks we believe can thrive in '25, and why select developed-market stocks have positioned themselves to thrive. All are high conviction holdings in the Firetrail S3 Global Opportunities Fund (ASX: S3GO).

Interactive Brokers (NASDAQ: IBKR): Leading the Brokerage Evolution

The brokerage sector has undergone a significant transformation in recent years, and Interactive Brokers (IBKR) is a key player driving this change. IBKR's highly competitive fees, advanced technology platform, and global reach continue to attract a diverse clientele, from retail investors to institutional traders. With the ongoing rise in trading volumes and increasing interest in financial markets from individuals worldwide, IBKR is well-placed to capitalise on secular trends in the brokerage industry.

Moreover, IBKR's efficiency and strong cost controls make it resilient in a volatile environment, allowing the company to maintain robust profit margins even as competition intensifies. The company’s focus on automation also enables it to scale operations without significantly increasing costs, a strategic advantage that sets it apart. As IBKR expands its offerings and customer base, 2025 is likely to be a year of continued growth, with steady gains driven by both new customer acquisitions and deeper engagement from existing clients.

Tenable (NASDAQ: TENB): Securing the Digital Economy

In an era where cyber threats are omnipresent, Tenable (TENB) has emerged as a leading cybersecurity company, specialising in vulnerability management. As organisations across industries enhance their digital defenses, Tenable’s products are crucial for identifying, assessing, and managing cyber risks in real-time. With new and stricter regulations worldwide, companies are under growing pressure to fortify their cybersecurity frameworks, leading to an increased demand for Tenable’s solutions.

The cybersecurity sector is experiencing significant growth as businesses prioritise protecting their data and infrastructure. Tenable has a strong growth trajectory, underpinned by its commitment to innovation and expansion within enterprise solutions. Its ability to cater to both large enterprises and smaller organisations alike broadens its addressable market and offers a diversified revenue stream. In 2025, Tenable is expected to benefit from these industry tailwinds, bolstered by a growing customer base that increasingly views cybersecurity as a top priority rather than a discretionary expense.

Fortum (HEL: FORTUM): Powering Sustainable Energy Solutions

As one of Europe’s foremost providers of clean energy, Fortum has a compelling role in the shift towards sustainability. With global demand for renewable energy increasing, Fortum is positioned to benefit from both government incentives and consumer interest in reducing carbon footprints. The company’s portfolio spans hydro, solar, and wind energy projects, and it has invested heavily in expanding its renewable capacity. Moreover, its partnership with the European Union on green energy initiatives underscores Fortum’s role as a pivotal player in the continent’s clean energy transition.

Fortum’s emphasis on sustainable energy is matched by its focus on operational efficiency and cost reduction. By adopting innovative energy storage solutions and pursuing growth in emerging technologies, Fortum is well-equipped to navigate the challenges of the energy market. In 2025, Fortum’s financial performance is expected to reflect both strong earnings and revenue growth, with potential upsides from additional government-backed energy programs. The stock stands out as an attractive opportunity for those looking to align their portfolios with the green energy trend while targeting a healthy return.

Alcon (SWX: ALC): Vision Care and Surgical Precision

Alcon is a market leader in eye care, specialising in both vision care products and surgical solutions. With an aging global population and an increasing focus on health and wellness, the demand for Alcon’s products is expected to rise significantly. Its extensive product portfolio, which includes contact lenses, surgical equipment, and pharmaceuticals for eye care, is designed to meet a variety of needs across different patient demographics.

Alcon’s strategic investments in research and development position it to capture long-term growth in the healthcare space. Its high margins in the surgical segment, in particular, demonstrate the pricing power Alcon maintains due to its advanced, patent-protected products. As developed markets continue to prioritise healthcare advancements, Alcon is likely to experience both organic growth and incremental gains from innovation-driven product launches. With increasing revenue and strong cash flow generation, Alcon is a solid investment for 2025.

John Deere (NYSE: DE): Innovating the Agricultural Machinery Landscape

John Deere, a powerhouse in agricultural and construction machinery, stands out as a growth story fuelled by technology and innovation. As agricultural practices evolve to accommodate increasing global food demands, Deere's advanced equipment, such as autonomous tractors and precision farming tools, addresses the needs of modern farming. This innovation, coupled with a strong focus on sustainable practices, makes Deere a pivotal player in the agricultural technology sector.

The company’s recent ventures into digital and AI-driven solutions signal its forward-looking approach. John Deere’s expansion into emerging markets also holds potential as demand for more efficient farming solutions grows globally. With a stable business model and a proven track record of strong financial performance, Deere is expected to maintain solid growth in 2025, supported by favourable agricultural trends and technological advancements that improve productivity for farmers worldwide.

Consensus positioning is so concentrated in one corner of the market, it is important to identify the great opportunities emerging elsewhere. Firetrail's clients like our differentiated portfolio construction process and need real alternatives to many of the incumbent managers due to their overlap in positioning. At Firetrail, we create an environment where great analysts are able to think deeply, and conclude differently, to the prevailing consensus. The importance of this can’t be understated as we enter, what feels like to us, a new market regime.