The stock market has faced a challenging start in 2025, with the S&P 500 index experiencing significant declines. However, for investors who adopt a buy-and-hold strategy, the recent valuation discounts in top-tier companies may provide opportunities for strong returns. Two contributors from Motley Fool assert that the stocks of certain companies are likely to outperform the S&P 500 over the next three years.
One company on the brink of a significant breakthrough is Take-Two Interactive Software, a leading entity in the video game industry, which now surpasses the combined size of the movie and music industries. Scheduled to release “Grand Theft Auto VI” (GTA VI) later this year, the company aims to follow up on the massive success of “Grand Theft Auto V.” Since its initial launch in 2013, “Grand Theft Auto V” has sold over 210 million copies and generated substantial revenue from in-game purchases in its online multiplayer mode.
While it is uncertain if GTA VI will match the previous installment’s sales, it is anticipated to become a major revenue driver for Take-Two due to its enhanced online multiplayer offerings and significant in-game purchase opportunities. Reports suggest possible pricing for GTA VI could be around $100, higher than the common $70 price for high-budget games. The release is expected to disrupt the industry significantly, with some publishers opting to avoid releasing their products around the same timeframe. As such, GTA VI is likely to dominate sales and capture considerable player attention.
Another company exhibiting strong growth potential is Dutch Bros, which has seen its stock rise approximately 1% in the current year, in contrast to the 15% decline of the S&P 500. With nearly 1,000 coffee shops as of 2024, Dutch Bros mainly operates drive-thru locations, focusing on creating a welcoming environment even outside its stores. The company emphasizes speed and customer service, with personnel taking orders directly from customers in drive-thru lanes.
Dutch Bros showcases substantial growth, with a 35% increase in revenue year-over-year in the fourth quarter, attributed to the opening of 32 new stores and a 6.9% rise in same-store sales. Company-operated shop contributions increased by 51%, with net income growing from a $3.8 million loss to a $6.4 million gain. Management has set a goal to expand to 4,000 stores over the next 10 to 15 years, with plans to open at least 160 new locations in 2025. The company is also introducing a new mobile-order program, which is already showing promise as a growth catalyst.
Overall, Dutch Bros is positioned to continue its market outperformance over the next several years, with its strategic expansion and customer-focused initiatives driving future success.
