2 Growth Stocks That Could Rocket Higher in the First Quarter of 2025

As the first quarter of 2025 approaches, investors are looking for growth stocks that could deliver significant returns. Two companies, Broadcom (AVGO) and Taiwan Semiconductor Manufacturing (TSM), stand out due to their strong fundamentals and growth prospects.



Broadcom (AVGO) is a leading provider of semiconductor and infrastructure software solutions. In fiscal 2024, the company's revenue grew 44% to $51.6 billion, driven by strong demand for its AI accelerators and networking solutions. Broadcom's AI revenue soared by 220% to $12.2 billion, highlighting the company's exceptional strength in this growing market. The company estimates that its AI serviceable addressable market will reach between $60 billion and $90 billion by fiscal 2027, based on the plans of its three major hyperscaler clients to each deploy 1 million XPU clusters by 2027. With the rising deployment of AI chips in large-scale XPU clusters, demand is also increasing for Broadcom's networking solutions. Finally, Broadcom has successfully integrated VMware ahead of schedule, improving cost efficiency and profitability. These tailwinds position Broadcom for an impressive bull rally in 2025.



Taiwan Semiconductor Manufacturing (TSM) is the world's leading third-party foundry, with a market share of nearly 65% as of the end of September 2024. In fiscal 2024, the company's revenue rose 30% to $90 billion, while its operating margin expanded by 3.1 percentage points to 45.7%. TSMC expects capex of between $38 billion and $42 billion in fiscal 2025, indicating its commitment to maintaining its leadership in advanced semiconductor manufacturing. The company's 3-nanometer (nm) process technology contributed 18% to its wafer revenue in fiscal 2024, up from 6% in 2023. TSMC is gearing up for volume production of chips using its new 2nm process technology in the second half of 2025, with the introduction of N2P and A16 nodes to further boost power benefits and performance. Increasing demand for AI processors such as graphics processing units (GPUs), accelerators (XPUs), application-specific integrated circuits (ASICs), and high-bandwidth memory (HBM) controllers continues to be a major growth catalyst for TSMC. Management expects revenue from AI accelerators to double in 2025, driven by demand for chips to support data center applications as well as AI applications in smartphones. TSMC's AI accelerator revenue is expected to grow at a compound average percentage rate in the mid-40s from 2024 to 2029. Despite these many tailwinds, TSMC trades at a reasonable price-to-sales (P/S) ratio of 10.9, making it an attractive investment opportunity.



In conclusion, Broadcom (AVGO) and Taiwan Semiconductor Manufacturing (TSM) are two growth stocks that could rocket higher in the first quarter of 2025. Their strong fundamentals, growth prospects, and attractive valuations make them compelling investment opportunities for growth-oriented investors. As the first quarter approaches, investors should consider adding these stocks to their portfolios to capitalize on their potential upside.