3 Red-Hot S&P 500 Growth Stocks to Buy with Room to Run in the Second Half of 2025

Key Points

• Netflix, Oracle, and Broadcom have been surging, but all three are still good buys for long-term investors.

• Netflix’s customer loyalty speaks for itself.

• Oracle and Broadcom are benefiting from the ramp-up in AI infrastructure spending among hyperscalers.

• 10 stocks we like better than Netflix ›

So far in 2025, Netflix (NASDAQ: NFLX), Oracle (NYSE: ORCL), and Broadcom (NASDAQ: AVGO) have skyrocketed 39.7%, 38.4%, and 18.4%, respectively, compared to a 6.4% gain in the S&P 500 (SNPINDEX: ^GSPC).

Here's why these red-hot growth stocks have more room to run in the second half of the year despite their expensive valuations.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

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Netflix is in a league of its own among streaming platforms

In 2013, CNBC's Jim Cramer popularized the term "FANG stocks" -- referring to Facebook (now Meta Platforms), Amazon, Netflix, and Google (now Alphabet) -- tech companies he singled out for attention due to their explosive growth potential and market-beating gains. And while Netflix had an impeccable run-up in the following years, the original FANG group lost a lot of its luster in 2022 when all four stocks fell by between 39.1% and 64.2% -- with Netflix tumbling 51.1%.

But Netflix has come roaring back. The stock has more than doubled since the start of 2022 -- rewarding those investors who held on with sizable gains even when factoring in that steep sell-off.

Now sporting a $529.9 billion market cap, Netflix has reached a size that will make it more difficult for its stock to produce life-changing gains to shareholders. But that doesn't mean Netflix can't be a solid investment going forward.

In years past, too much of Netflix's massive production budget often went toward shows that weren't received well by audiences, but its occasional big hits would essentially make up for the duds. However, the company has figured out a secret sauce that keeps users engaged with a variety of content that appeals to different audiences across entertainment categories.

Netflix is a much stronger company today because it doesn't rely as much on hit shows. It still has its share of hits, but the real differentiator has been improving the overall quality of its content slate.

Given the stock has run up just under 40% year to date, Netflix will have a lot to prove when it reports earnings on Thursday.

The company needs to continue growing its top line while sustaining high margins. There's also ongoing pressure from consumers, who are tightening their spending. But so far, Netflix has been able to raise prices and retain subscribers. As long as Netflix can continue driving home that loyalty, the stock should continue to be a solid long-term investment. But if not, the stock's lofty valuation could look overextended, and investors may turn sour on the stock.

Oracle is capitalizing on AI investment through subscription services

Oracle has soared by 222% in the last three years. It's part of a cohort of legacy tech companies (like Cisco Systems, International Business Machines, etc.) whose stock prices stagnated for years, but that have lately climbed toward their highest levels in decades. These companies are benefiting from the general uplift of the artificial intelligence (AI) trend across the tech sector through their networking and data services.

But Oracle has taken the transformation a step further by revolutionizing its business model.

The company provides software, platform, and infrastructure cloud services to customers for data management, building and maintaining infrastructure and databases, computing, networking, and other subscription services (including handling AI workloads). The results have been astounding.

In Oracle's fiscal 2025 fourth quarter, which ended May 31, the company reported a 27% jump in infrastructure-as-a-service and software-as-a-service cloud revenue. Management expects its revenue from applications plus infrastructure cloud revenue to increase by 40% in fiscal 2026 compared to the 24% growth booked in fiscal 2025.

Oracle is attracting database revenue from hyperscalers like Amazon Web Services, Google Cloud, and Microsoft (NASDAQ: MSFT) Azure -- a reliable customer base since these companies and their peers have committed to aggressive AI capital expenditures.

Like Netflix, Oracle isn't cheap, but its 34.1 forward price-to-earnings (P/E) ratio is reasonable if the company can keep delivering results.

Broadcom serves a vital role in data centers

Broadcom is yet another company at the cross-section of network connectivity and AI. It's a giant in the areas of networking, storage, broadband, and cybersecurity. But it also provides cloud infrastructure services and infrastructure software thanks to its acquisition of VMware in late 2023.

However, the key driver behind Broadcom's soaring stock price and its rise to a $1.29 trillion market cap is its custom AI chip business.

Broadcom's XPUs are application-specific integrated circuits (ASICs) custom-made to handle AI workloads. These chips are playing a major role in the buildout of AI data centers.

Traditionally, data centers relied on central processing units (CPUs) to perform most computing tasks. Graphics processing units (GPUs), like those made by Nvidia, are parallel processors, capable of performing certain types of complex tasks faster -- among them, parsing large datasets. Because the heaviest parts of AI workloads can only be handled efficiently by parallel processors, GPUs and similar chips are becoming the gold standard of modern data centers.

Broadcom's XPUs are serving unique functions in data centers. These purpose-built chips aren't as flexible as GPUs, and are usually deployed for specific known AI workloads. But they are ideally suited for hyperscalers that are looking to reduce the costs of running large language models.

For example, Google Cloud works with Broadcom to make its custom-designed AI accelerator Tensor Processing Units (TPUs). TPUs power applications like Google Search, Photos, and Maps, as well as Google's AI chatbot, Gemini.

When deployed correctly, Broadcom's chips can reduce server operators' energy costs and run faster than GPUs. Broadcom sees sustained demand for XPUs from key hyperscale customers. As long as these customers keep aggressively spending on AI, it's likely that Broadcom's earnings will continue to impress.

Broadcom's valuation has gone up substantially to a lofty 41.4 forward P/E. So the stock should only be a buy for those who are confident that the AI infrastructure investment cycle will persist for quite some time.

Red-hot for all the right reasons

Netflix, Oracle, and Broadcom can continue running higher because they have clear paths toward earnings growth.

Netflix has separated itself from its streaming rivals by developing a formula for producing content with the quality, quantity, and variety to appeal to a diverse group of viewers. Once thought of as a discretionary expense, a Netflix subscription has become a borderline staple for many households. That status should help Netflix produce solid results even during economic downturns.

Oracle and Broadcom have established footholds in existing industries but are also directly benefiting from hyperscalers' spending to keep up with AI-driven demand. Companies like Amazon, Microsoft, Alphabet, and Meta Platforms are ramping up their spending on AI, and chances are, a good chunk of that spending will go to companies like Oracle and Broadcom. However, their links to those key customers could prove to be a double-edged sword -- if the hyperscalers pull back on spending, it would sap Oracle and Broadcom's results and could cause both stocks to sell off.

Netflix, Oracle, and Broadcom are expensive because all three companies are executing. But it would be best to only consider buying these stocks if you have a long-term horizon for your investments, because their elevated valuations make them vulnerable to significant sell-offs if investor sentiment turns negative.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Cisco Systems, International Business Machines, Meta Platforms, Microsoft, Netflix, Nvidia, and Oracle. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.