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artificial intelligence became about 10 times smarter by 2024, and as such, I thought it could be pretty good at picking stocks. So, I asked GoogleGemini's Gemini (formerly Bard) artificial intelligence (ai) platform for the five best stocks to buy in 2025. Here's what it said.
Google says…
Predicting which are the “best” stocks is risky, as the market is constantly changing. However, based on current trends and analyst views, here are five UK stocks that could do well in 2025:
- Diageo: This global beverage giant owns iconic brands such as Johnnie Walker, Guinness, and Smirnoff. It has a solid growth track record and a resilient business model.
- AstraZeneca: a leading pharmaceutical company with a strong portfolio of innovative medicines. AstraZeneca is well positioned to benefit from the world's aging population and growing demand for healthcare.
- Unilever: a consumer goods giant with a diverse portfolio of brands, including Paloma, Liptonand Ben & Jerry's. Unilever's strong brand recognition and global reach make it a relatively stable investment.
- NatWest Group (LSENWG) – The UK's second-largest bank is benefiting from rising interest rates, which are increasing its lending margins. However, the economic outlook remains uncertain, which could affect the bank's performance.
- Shell: The oil and gas major is transitioning to renewable energy sources, but still generates significant profits from its fossil fuel businesses. The price of oil and gas is volatile, creating risks and opportunities for investors.
Conventional options
Well, where to start? It is perhaps best to start by highlighting that NatWest is not the second largest bank in the UK. Other than that, though, these look like fairly conventional stock picks, with a weighting toward consumer goods stocks, which may perform better in rate cut cycles.
Likewise, Shell and AstraZeneca are the two largest stocks by market capitalization in the market. FTSE 100. Shell is a diversified energy company, although it remains heavily dependent on hydrocarbon revenues. It also trades at a steep discount to its US Big Six peers.
Meanwhile, AstraZeneca shares have fallen in recent months following the launch of an investigation in China. However, several analysts have suggested that this could be a good opportunity to buy shares of the biotech-pharmaceutical giant, as the price-earnings-growth (PEG) ratio is falling to 1.4.
Why NatWest?
Gemini's investment theses may lack detail, but there are compelling reasons to believe NatWest could rebound strongly in 2025. Banks have historically performed well during interest rate cut cycles, which could create conditions favorable for NatWest to continue to rebound.
Lower interest rates often stimulate borrowing and economic activity, boosting banks' profitability through greater demand for loans. Additionally, banks have hedging strategies to mitigate the impact of interest rate fluctuations, and these strategies can actually increase margins when central banks cut rates.
While challenges remain, including managing economic uncertainties and the resurgence of inflation partly driven by Labour's first budget, the potential for better performance in a favorable monetary environment makes NatWest a stock to watch.
