The 1976 movie All the President’s Men offered perhaps one of the best three-word investment strategies: “Follow the money.” No, the phrase was not used in the context of investing in the movie. However, the best stocks tend to generate the most money in terms of revenue, profits, and free cash flow.
Tracking your money can help you identify good stocks. With that in mind, here are three stocks to buy in 2025 that are essentially money machines.
1. Amazon
There aren’t many companies that generate more revenue than Amazon. (AMZN 0.01%). The e-commerce and cloud services giant generated approximately $620 billion in revenue over the past 12 months. The consensus forecast for Amazon’s sales in 2025 among analysts surveyed by LSEG is about $707 billion.
Previously, Amazon wasn’t too worried about delivering revenue and free cash flow. But that’s no longer true. Currently, the company is focused on both. The proof is in the pudding. In the third quarter of 2024, Amazon’s profits surged nearly 55% year over year to $15.3 billion, and free cash flow in the trailing 12 months soared 123% to $47.7 billion.
Amazon also has huge cash reserves of about $88 billion. This amount is not significantly lower than the company’s record cash balance at the end of 2021, which was fueled by a surge in online shopping due to the COVID-19 pandemic.
But the most important thing to know about Amazon is that it needs to continue to be a money machine. Amazon Web Services has significant growth opportunities as organizations move their apps and data to the cloud. There is still significant room for expansion in the e-commerce market. Amazon is also pursuing new growth opportunities such as healthcare and robotaxis.
2. Alphabet
Google’s parent alphabet (GOOG -0.67%) (Google -0.79%) It lags far behind Amazon in terms of revenue generation. The company’s sales have approached $340 billion in the past 12 months. However, when it comes to profits, it’s a different story. Alphabet generated $94.3 billion in revenue over the past 12 months, and $26.3 billion in revenue in the third quarter of 2024 alone.
The technology leader hasn’t cut corners in the free cash flow department either. Over the past 12 months, Alphabet’s free cash flow exceeded $41 billion. The company reported free cash flow of $17.6 billion in the third quarter.
Most of Alphabet’s revenue (about 87%) comes from Google services such as Google Search, YouTube, Google Maps, Google Play, Android, Chrome, and Devices. Google Cloud’s profits continue to grow rapidly, but Google services are also the company’s largest source of revenue.
Should investors be concerned about regulatory threats? I don’t think so, despite a significant adverse court ruling against Alphabet last year. In my opinion, the company should increase its share of the cloud services market while maintaining its dominance in the search engine market. I also expect Alphabet’s Waymo division to be a major contributor to growth by the end of the decade as the robotaxis market takes off.
3. Eli Lilly
Eli Lilly (LLY 1.80%) It may seem out of place on this list. The company’s sales of $40.9 billion over the past 12 months pale in comparison to those of Amazon and Alphabet. Lilly generated revenue of “just” $8.4 billion in the past 12 months. Free cash flow was negative.
So why do I consider Lily the money machine to buy in 2025? Sometimes chasing the money means looking ahead. Lilly is poised to generate even more revenue in the coming years than it has in the past.
The company’s Mounjaro/Zepbound franchise, which targets obesity and type 2 diabetes, stands out as a major reason for my optimism. Together, the two brands (which are essentially the same drug) generated $11.6 billion in revenue in the first three quarters of 2024. Analysts at UBS predict the franchise could become the “biggest drug of all time.”
Meanwhile, Lilly is touting other key growth drivers, including autoimmune disease drug Taltz and cancer drug Belzenio. Commercialization of the company’s Alzheimer’s disease drug Kisunla is still in the early stages. The company also has a promising pipeline featuring 24 late-stage programs.
Suzanne Frey, an Alphabet executive, is a member of the Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Keith Speights has positions at Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.
