How to protect your portfolio from a tech market crash

Laith Khalaf  Thursday, January 30, 2025

UK investors might feel a million miles away from Silicon Valley, but their pensions and investment portfolios are probably brimming with US technology stocks. This has no doubt served them incredibly well in the past decade, and the Magnificent Seven may well continue to leave the rest of the market chomping at their heels.

But this week saw a wobble in stock prices stemming from Chinese AI app DeepSeek’s announcement of an AI model developed at a fraction of the typical cost, raising concerns about the necessity of substantial investments in AI infrastructure and leading to significant declines in tech stocks, particularly Nvidia. DeepSeek’s new large language model highlights the risks to incumbents in the tech sector from the AI arms race that is currently underway.

The artificial intelligence boom definitely dug the US tech sector out of a hole in 2022, and has so far been a rising tide that has lifted all boats. But it has also increased capital expenditure among the Magnificent Seven, while lessening revenue visibility. Alphabet’s chief executive Sundar Pichai said the risk of under-investing in AI is dramatically greater than the risk of over-investing. That may be so, but that’s not to say the latter doesn’t present any danger to stockholders. Ultimately if there is one big winner from the AI race, the also-rans may find the money they have spent along the way doesn’t generate the profits necessary to justify the premium valuations currently attached to them.

The tech risk in your tracker fund

Despite knocking over half a trillion dollars off the market value of Nvidia, the sell-off sparked by DeepSeek’s technology might prove to be short-lived, or relatively contained, or both. Certainly not all of the Magnificent Seven have so far been impacted to the same degree, with shares in Apple actually posting a decent increase on the day thanks to its relatively modest AI spending and the potential for cheaper AI to boost usage via mobile devices (see table below).

Even so, the wobble caused by DeepSeek does highlight the potential for the AI arms race to disrupt the hegemony currently enjoyed by the big US tech titans. The disruptive threat could come from an outsider, like DeepSeek, or from other companies within the Magnificent Seven taking a leading role in the AI industry at the expense of competitors.

The unveiling of the DeepSeek model also caused big share price movements in companies outside the Magnificent Seven but involved in the AI supply chain. However, the particular threat to investors presented by the Magnificent Seven is their hefty presence in the S&P 500, and by extension US and Global tracker funds.

The table below shows the proportion of a typical US tracker fund invested in these seven companies, notably the day before the DeepSeek impact, which will have reshuffled the pack a bit. Also included is Broadcom, which isn’t a Magnificent Seven stock, but is still a semi-conductor company that has rocketed on the back of the AI boom and now finds itself in the top 10 holdings of S&P 500 tracker funds.

	Share price performance 27th January 2025	% of S&P 500 tracker*
Apple	+3.2%	6.50%
Alphabet	-4.20%	4.11%
Amazon	+0.24%	4.24%
Meta	+1.91%	2.72%
Microsoft	-2.10%	6.37%
Nvidia	-17%	6.75%
Tesla	-2.30%	2.19%
Broadcom	-17.40%	2.21%

Sources: Refinitiv, iShares. *iShares Core S&P 500 ETF as at 24 January 2025.

At an index level, the impact of the sell-off was relatively muted, with the S&P 500 falling by 1.5% on Monday. A stumble, but by no means a catastrophe. US tech bulls could point to this market turbulence as an example of how the Magnificent Seven do not wax and wane in lockstep, and how actually we shouldn’t be too worried about their dominance of the index, and by extension tracker funds.

There is some truth in this, but the recent sell-off was pretty focused in terms of its cause and implications, stemming from the launch of a single new AI model. A wider technology sell-off would be less forgiving at an index level, as we saw in 2022.

This is especially the case seeing as US stock valuations are currently in the top 2% of readings, according to Robert Shiller’s CAPE index, a widely used measure of stock market valuation, which exhibits a high inverse correlation with subsequent market returns (see chart below). This measure has only been higher during two periods, the pandemic-induced tech melt-up of 2021 and the dotcom boom, which were followed by a substantial correction and a stock market crash, respectively. At the very least the DeepSeek shockwave serves as a timely prompt for investors to review their US technology exposure and make sure they’re happy with their current positioning.

US CAPE ratio at historic high:

Source: Shiller Data

UK investor exposure to the Magnificent Seven

The Global and North America fund sectors are two of the most popular destinations for UK investors, commanding £331 billion of assets under management, according to Investment Association data. Combined with the fact we’ve also seen elevated sales of passives compared to active funds in recent years, this will leave many UK investors with high exposure to Magnificent Seven stocks.

An S&P 500 tracker fund now has a third of its portfolio invested in these seven companies. A typical global tracker fund has around three-quarters of its portfolio invested in the US, and consequently just under a quarter of its portfolio invested in the Magnificent Seven.

Investors in these funds might well decide they want that level of exposure to the US tech sector. It has no doubt served them exceptionally well in recent years, and may continue to do so. But the current sell-off provides a timely nudge for investors to check in on their overall exposure to the US stock market, and in particular to the technology sector.

The strong performance of the US tech titans has resulted in their stature within US and global funds growing, and also means those funds now probably make up a bigger share of investors’ portfolios to boot. Consequently, investors may find they have more invested in these stocks than they ever intended.

How to protect your portfolio from a tech market crash

A correction in the tech stock prices may not be on the cards, but investors would be prudent to establish their overall exposure to the US technology sector, and assess if they are happy with it, or wish to dial it down. Those who choose the latter do need to acknowledge the risk that if the US technology sector continues to perform strongly, their portfolio may get left behind.

There are a number of ways to reduce exposure to Magnificent Seven stocks in a portfolio. Probably the simplest strategy is to diversify away from the US and into other regions such as the UK, Europe, Japan, or emerging markets. This can be achieved by choosing active funds in these regions, or passively through trackers and ETFs. While this strategy can be executed passively, it is still active at an asset allocation level if investors are moving away from a global tracker fund, which passively allocates money depending on stock size, towards a regional split decided by each investor. In other words, via an active allocation of capital.

For investors who want to shift away from the Magnificent Seven but still want to retain exposure to the wider US stock market, they might consider an active fund which has lower exposure. This may be achieved by investing in value managers or investing in US smaller companies.

Another option would be to seek out an equally weighted S&P 500 tracker, which allocates money to each of the stocks in the US index equally. While this strategy is passive in that it follows an automatic rules-based investment policy, it’s not passive in the sense that it doesn’t allocate money based on the size of a company, which is the more usual, if not universal, passive methodology.

The momentum-based approach has served the size-weighted index better in recent times. Over the past five years the S&P 500 index has returned 105% compared to 77.6% from the equal weighted version (source: FE, total return in GBP). Clearly that’s a period dominated by US mega cap tech outperformance, and weaker performance from the Magnificent Seven would hit the traditional size weighted index harder.

Some investors might decide the recent jitters in the highly valued US stock market are cause for a reduction in equity risk altogether. They might therefore consider upping exposure to more cautious multi-asset funds, money market funds, or indeed individual gilts, which confer certain tax advantages for those investing outside a SIPP or ISA.

If investors are adjusting their portfolios, there’s no need to throw the baby out with the bathwater. Managing a portfolio needn’t be an all-or-nothing endeavour, and investors can tilt their portfolio towards or away from any given region or sector without executing a wholesale switch. Given the importance of the Magnificent Seven to the global stock market, it may be unwise to ditch all exposure to these companies. But the potential for upheaval as the AI race progresses might mitigate in favour of a more thoughtful, nuanced approach to investing in these companies.

These articles are for information purposes only and are not a personal recommendation or advice. Past performance isn’t a guide to future performance, and some investments need to be held for the long term. Forecasts are not a reliable indicator of future performance.

AJ Bell

Discount Watch

We estimate the number of funds trading at year-high discounts to net assets jumped by eight to 24 last week. No surprise to learn that alternatives still dominate the list with 16 names – stubbornly high bond yields continue to weigh on sentiment and share prices.

By Frank Buhagiar

We estimate there to be 24 investment companies saw their share prices trade at 52-week high discounts to net assets over the course of the week ended Friday 24 January 2025 – eight more than the previous week’s 16. Usual graph below but, as it’s still early days for 2025, the number of year-high discounters is shown on a rolling rather than year-to-date basis.

A look at the top five table below tells the story. All five funds with the widest discounts to net assets are alternatives. In other words, week ended Friday 24 January 2025 saw a continuation of the theme that has dominated the Discount Watch in recent weeks, even months: share prices being marked down in anticipation that higher bond yields will lead to higher discount rates and lower asset valuations. Of the 24 funds on the list this week, 16 are alternatives: eight renewables; three from property; one from private equity plus another from growth capital; and three from infrastructure.

It’s a theme that looks likely to run for a while longer, at least until bond yields show signs of coming down.

Top five

Fund	Discount	Sector
Ceiba Investments CBA	-74.95%	Property
Gore Street Energy Storage GSF	-54.07%	Renewables
Ecofin US Renewables RNEW	-53.19%	Renewables
Foresight Environmental Infrastructure FGEN	-40.30%	Renewables
Octopus Renewables Infrastructure ORIT	-39.21%	Renewables

The full list

Fund	Discount	Sector
JPMorgan China Growth & Income JCGI	-16.15%	China
European Assets EAT	-14.84%	Europe
Schroder BSC Social Impact SBSI	-29.30%	Flexible
North Atlantic Smaller Cos NAS	-35.20%	Global Smaller Companies
Schroder British Opportunities SBO	-37.08%	Growth Capital
International Public Partnerships INPP	-26.30%	Infrastructure
HICL Infrastructure HICL	-31.23%	Infrastructure
BBGI Global Infrastructure BBGI	-21.69%	Infrastructure
Weiss Korea Opportunities WKOF	-11.04%	Korea
Literacy Capital BOOK	-16.78%	Private Equity
Supermarket Income REIT SUPR	-27.67%	Property
Care REIT CRT	-33.05%	Property
Ceiba Investments CBA	-74.95%	Property
Bluefield Solar Income BSIF	-33.43%	Renewables
Greencoat Renewables GRP	-31.90%	Renewables
Foresight Environmental Infrastructure FGEN	-40.30%	Renewables
Octopus Renewables Infrastructure ORIT	-39.21%	Renewables
Renewables Infrastructure Group TRIG	-34.84%	Renewables
Gore Street Energy Storage GSF	-54.07%	Renewables
Ecofin US Renewables RNEW	-53.19%	Renewables
Greencoat UK Wind UKW	-25.35%	Renewables
Merchants MRCH	-4.95%	UK Equity Income
Oryx International Growth OIG	-35.60%	UK Smallers Companies
Vietnam Enterprise VEIL	-24.43%	Vietnam

Fund Monitor

Herald’s (HRI) independent shareholders resoundingly reject Saba’s proposals. Message to the other six funds in the sights of the activist investor – mobilise shareholders to vote and Saba can be seen off. Elsewhere, a Supermarket Income REIT (SUPR) Director goes bargain-hunting, while CC Japan Income & Growth (CCJI) cuts its fees.

By Frank Buhagiar

Herald shareholders resoundingly reject Saba

One down six to go after Herald (HRI) became the first of the seven trusts targeted by Saba Capital to see off the activist’s attempts to gain control of the fund and change its mandate from an investor in global tech to an investor in other investment trusts. And it was an outright rejection too. As per HRI’s press release, 65.10% of total votes cast were against Saba’s Requisitioned Resolutions. What’s more “Excluding the votes Saba cast in favour of their own Requisitioned Resolutions (being 14.1m votes, representing approximately 34.75% of the votes cast), only a further 59,221 Shares, representing just 0.15% of the votes cast, voted in favour of the Requisitioned Resolutions. This is a damning indictment of Saba’s proposals by the Company’s non-Saba Shareholders.”

As for the remaining six funds that are due to hold their general meetings in the coming weeks, no time to ease off the gas. One of the reasons why HRI was able to fend off Saba was thanks to a huge turnout by shareholders – over 80%. As Numis notes “with 99.8% of non-Saba votes being against the resolutions,” this represents “a pretty embarrassing rebuttal from independent shareholders for Saba Capital.” Although the broker notes “Saba remains a c.29% shareholder which still leaves the Board with a problem to solve.”

Supermarket Income REIT insider goes shopping

Supermarket Income REIT (SUPR) announced Non-executive Director, Roger Blundell acquired 100,000 SUPR Ordinary Shares on 16 January 2025 at a price of 69.9p a share, equating to an investment of £69,900. That’s Blundell first purchase of the fund’s shares but with the share price trading at a 28% discount to net assets, be interesting to see if he goes back for more.

CC Japan Income & Growth cuts fees

CC Japan Income & Growth (CCJI) unveiled a reduction in fees alongside its final results. Out goes the old structure of a flat fee of 0.75% per annum on net assets. In comes a new one calculated on a tiered basis of 0.75% per annum on the first £300m of net assets and 0.60% on net assets in excess of £300m. This way shareholders will be able to “share in the benefits of scale”. According to the press release, it also shows that the fund “demonstrably represents value for money”.

The Results Round-Up: The week’s investment trust results

Hat trick of funds this week: Henderson Smaller Companies HSL (along with the rest of the sector) finds the going tough because there’s too much doom and gloom; Patria Private Equity PPET reports a +24.9% share price total return in what was a ‘year of ‘transition’; and CT Global Managed Portfolio Trust CMPI/G is ready for some new news after a sedate first half for both the fund and the market.

By Frank Buhagiar

Henderson Smaller Companies (HSL) thinks there’s too much doom and gloom

HSL reported a -3.8% net asset value (NAV) total return for the latest half year. Neither the benchmark nor HSL’s peers fared much better: the Deutsche Numis Smaller Companies ex-Investment Companies Index managed to squeak into positive territory, up +0.8%, while the AIC UK Smaller Companies sector average NAV was down -1.1%. That points to challenging markets. As Chair Penny Freer notes “headwinds to performance, (were) driven primarily by rising bond yields which continue to hamper economic recovery and put pressure on company valuations.”

Despite the difficult first half, Freer believes, “there is evidence that too much doom and gloom has been priced into the market following the Budget.” For “Whilst interest rates may be cut more slowly, in contrast to the last decade, their relatively high starting point provides a strong and stimulating lever for policy makers to pull on should economic activity slow further.” And then there are valuations. According to the fund managers “the equity market is trading below its long-term averages.” That may be partly down to uncertainty “around short-term economic conditions.” Not that the fund managers sound too concerned “we think that the portfolio is well positioned both to withstand current challenging economic conditions and to participate in any potential upswing.” A portfolio for all seasons then. Market hedging its bets too – shares edged a penny higher to close at 810p.

Winterflood: “Underperformance attributed to stock selection, gearing and expenses. Negative contribution from stock selection including rising bond yields having detrimental impact on valuations of HSL’s predominantly pro-cyclical and interest rate sensitive portfolio. In addition, a ‘small number’ of company-specific issues impacted performance; the managers believe these issues are temporary or more than fully reflected in share prices and expect these companies to recover over time.”

Numis: “HSL remains one of our top picks within the UK smaller companies sector. The managers, Neil Hermon and Indri van Hien, follow a stock-picking approach focused on growth at a reasonable price (GARP). We rate the experienced management team highly, despite a period of poor performance, and welcome the news of Indriatti’s appointment as co-PM. The fund retains its strong long term track record, with NAV total returns of 1,215% (12.3% pa) compared to 792% (10.3% pa) for its benchmark, since Neil’s appointment in November 2002. The shares are currently trading on a c.12% discount to NAV, which we think is a good entry point for an attractively valued portfolio.”

Patria Private Equity’s (PPET) busy year

PPET’s share price total return of +24.9% stole the show in the latest full-year results. That compares to the NAV total return which, at +2.4%, was lower than the long-term average. Foreign exchange movements largely to blame. Strip these out and the portfolio return in local currency terms was +8.8%. Not bad going then, particularly as Chair Alan Devine notes, “The last 12 months have been a year of transition since our Manager had a change in ownership and, as a result, the Board rebranded the Company to Patria Private Equity Trust plc.” And if that wasn’t enough, “At the same time, we appointed a new corporate broker, launched a share buyback programme and conducted a successful secondary sale of a non-core portfolio of fund investments.” Phew.

Looking ahead, Devine is feeling “optimistic about PPET going forward.” Optimism is centred around a pick-up in private equity investment activity, as “Increased activity will drive portfolio company exits and cash distributions and should in theory act as a tailwind to NAV growth, since exits are typically realised at an uplift to prior valuation.” And, as the investment manager points out, “The PPET portfolio continues to perform resiliently and remains well-positioned for a pick-up in activity levels. As such, we are excited about the potential for PPET as we look forward to 2025.” Finally, good to see the Chair beating the drum for investment trusts “I continue to believe that investment trusts are the best way for smaller investors to access private equity, due to features like daily liquidity, the evergreen nature of the portfolios and long-term track records”. Well said, sir. Market liked what it heard too – shares tacked on 5p to close at 562p.

JPMorgan: “The valuation multiples for most of the portfolio seem reasonable and they have delivered good revenue and EBITDA growth and are not excessively leveraged. The current price of 553pps implies a headline discount of 29.9%. Taking into account listeds, and also look-through fund level debt, the implied discount on the unlisted is similar at 29.3%. This remains a little narrower than peers and so we see no reason to change our Neutral recommendation.”

Numis: “Key performance drivers included uplifts on exits (26% average uplift) and double-digit portfolio earnings growth (18%) which covers c.64% of the portfolio. It is positive to see PPET buying back more shares in recent months, helped by an improved balance sheet given the sale of a secondary portfolio of fund investments. The secondary sale completed at a c.5% discount, which demonstrates the value in the Listed PE sector, with PPET’s shares currently trading on a c.29% discount to our estimated NAV, which we believe is excessive and offers value, along with a number of other LPE ICs.”

CT Global Managed Portfolio Trust (CMPI/G) ready for some new news

CMPI / CMPG reported a +0.6% NAV total return for the Income shares and a +1.9% return for the Growth shares for the half year, the latter in line with the FTSE All-Share’s +1.9%. In his statement, Chairman David Warnock lists a number of uncertainties – inflation, interest rates and the economic impact of the UK and US elections. But as Warnock points out, “None of these observations is new news and so should be discounted already by stock markets. As ever, markets respond in either direction to events or news that is not discounted.”

Having said that, markets could well have a fair bit of new news to digest soon. “With a new and seemingly quite unpredictable US President having taken office, the potential for new news is even higher than usual.” Just as well then that “The Board and Manager believe the portfolios comprise quality investment companies and are well diversified. In particularly uncertain times, these characteristics should encourage investors, whatever new news appears.” Market waiting to see what this new news will be – both classes of shares were unmoved on results day.

Winterflood: “Growth Shares: NAV TR +1.9%, in line with performance of FTSE All Share. Principal contributors were investment trusts exposed to US stock market. Key contributors were JPMorgan American (JAM), Allianz Technology Trust* (ATT) and Polar Capital Technology (PCT). Income Shares: NAV TR +0.6% vs FTSE All Share +1.9%. Underperformance driven by lack of exposure to investment trusts invested in US stock market.”

This passive income plan is boring and unimaginative. That’s why it actually works !

Christopher Ruane explains how he is keeping things simple when it comes to earning passive income streams, using a proven technique.

Posted by Christopher Ruane

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. 

Passive income plans can come in all sorts of weird and wacky forms.

But the whole point of passive income is that should be (more or less) effortless.

Learning about a new business and setting it up does not seem passive to me. Nor is it guaranteed to generate income – in fact, it could eat up money instead of producing it.

So my own approach is based on a few basic principles – I want it to be passive and I want to have a strong chance of earning income.

Why reinvent the wheel?

Many businesses already know how to generate income.

In fact, they generate so much more income than they need for their own business needs that they give some of it to shareholders on a regular basis, in the form of dividends.

An example is Games Workshop (LSE: GAW).

At the start of June, it had £108m of cash and cash equivalents. Over the next six months, its operations generated £133m of cash. Even after spending on product development and sending a cheque to the taxman, Games Workshop divvied up £61m among its shareholders.

Yet it still ended the period with around £18m more in cash and cash equivalents than it began with.

In recent years, the FTSE 100 company has paid shareholders five dividends a year. All they need to do is spend money buying the share, sit back, and let the money roll in.

Taking a smart approach to income generation

But there are risks. Games Workshop’s concentrated manufacturing footprint means that if a key factory goes offline for any reason, sales could fall sharply. It plans a new factory in Nottingham, due to be completed next year.

Even a great, proven business can run into difficulties. So the savvy investor spreads money across multiple businesses to help mitigate the risk that one will do badly and reduce or cancel its dividends.

That does not necessarily take a lot of money – it is possible to buy shares even with a modest budget.

How much money could someone earn?

I use this strategy myself but I do not own Games Workshop shares, even though I think its fantasy universe and intellectual property are excellent competitive advantages.

Why ? The share looks pricy to me.

It also has a dividend yield of 3.6%, meaning that if I invest £1,000 today I would hopefully earn £36 per year of passive income.

That is not bad: in fact it is in line with the FTSE 100 average. But I am earning much higher yields owning other shares, like 8.6%-yielding Legal & General and M&G, with its 9.5% yield.

Those are different companies to Games Workshop and each has their own risks as well as positive points. But by carefully selecting a diversified range of companies, I earn passive income from the hard work and proven business models of large blue-chip firms.

That need not be complicated.

An investor can start with how much they can spare, set up a share-dealing account or Stocks and Shares ISA then – having learnt something about key stock market concepts like valuation – start looking for income shares to buy.

Changes to the portfolio.

ADIP and LTI leave the portfolio

Added to the portfolio ORIT, PEYS, TORO, RCOI

The added Trusts are not buy recommendations but Trusts to DYOR.

I will publish some information next week to assist your decision making.

QuotedData’s morning briefing 31 January 2025 – LBOW, ESCT, THRG, IEM, ORIT

ICG-Longbow Senior Secured UK Property Debt (LBOW) has issued an update in which it says it continues to make progress in exiting its three final investments in what remain challenging market conditions. The asset securing the Affinity loan has been placed under offer for sale following a competitive bidding process, and LBOW says that it continues to see buyer interest for the Southport hotel asset, however the exit of this position is taking longer than anticipated. Lenders to the RoyaleLife Loan, including LBOW, are working to restabilise the portfolio of assets that are securing that loan under the new Regency Living brand. LBOW says that home sales having restarted in earnest in the fourth quarter of 2024 and exit of this portfolio is anticipated when the conditions are right for sale. LBOW’s board has also agreed that it is time to reduce the size of the board. Stuart Beevor, who has served as Director and Fiona Le Poidevin, who has served as a Director and Chair of the Audit and Risk Committee, will retire from the Board of the Company with effect from 31 January 2025, with Jack Perry and Paul Meader will remain as Directors. Paul Meader will be appointed as Chair of the Audit and Risk Committee with effect

from 31 January 2025 following Fiona Le Poidevin’s retirement.
Janus Henderson has purchased a 4.9% stake in The European Smaller Companies Trust (ESCT) – a fund that it manages, that is under attack from the US hedge fund Saba Capital.

Blackrock Throgmorton (THRG) has published a circular in relation to a general meeting that is to be held on 17 February where the board is asking shareholders to renew its buyback authority as it believes the existing authority could be fully utilised before the next AGM at the end of March.

Impax Environmental Markets (IEM) has declared a second interim dividend for the 2024 financial year of 3.2p per share (2023: 2.9p), payable on 7 March 2025 to shareholders who appear on the register on 7 February 2025, with an ex-dividend date of 6 February 2025. This equates to a total dividend for the 2024 financial year of 5p per share (2023: 4.6 pence), an increase of 8.7 per cent. IEM pays out substantially all of its earnings by way of a dividend.

Octopus Renewables Infrastructure Trust (ORIT) has declare an interim dividend in respect of the fourth quarter of 2024 of 1.51 pence per ordinary share, payable on 28 February 2025 to shareholders on the register at 14 February 2025 (the “Q4 2024 Dividend”). The ex-dividend date will be 13 February 2025. The Q4 2024 dividend brings the ORIT’s total dividend for the year ended 31 December 2024 to 6.02p per share (2023: 5.79p per share) meeting the trust’s dividend target for the last financial year in full. ORIT says that the dividend is fully covered by cash flows arising from its portfolio of assets. A portion of the Company’s dividend is designated as an interest distribution for UK tax purposes. The interest streaming percentage for the Q4 2024 Dividend is 57.2%. ORIT has also increased its dividend target for the current financial year ending 31 December 2025 by 2.5% to 6.17p per share. The increase is in line with the increase to the Consumer Price Index (CPI) for the 12 months to 31 December 2024 and marks the fourth consecutive year that ORIT has increased its dividend target in line with inflation. ORIT says that this new target dividend is expected to be fully covered by cash flow generated from its operating portfolios.

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Revealed: Investing.com’s Top 10 Stocks for 2025

By Investing.com Blog – What’s New

Revealed: Investing.com’s Top 10 Stocks for 2025
By Investing.com Blog – What’s New

What are the top stocks in the US market poised to beat the index in 2025?

Investing.com’s ProPicks AI Top 10 Stocks of 2025

1. Monolithic Power Systems (NASDAQGS:MPWR)
   Designs power management chips for computing, automotive, and industrial markets.
   ➡️ 2025 projections show $2.2B revenue with strong EPS of $14.09
   ➡️ Analyst consensus shows 9.2% upside with $791.51 mean target by 2025
2. Applied Materials (NASDAQGS:AMAT)
   World’s largest manufacturer of semiconductor manufacturing equipment.
   ➡️ Projected 8.1% revenue growth to $29.38B by 2025
   ➡️ Strong Buy rating with $210.86 target driven by AI chip demand
3. J.B. Hunt (NASDAQGS:JBHT)
   Major transportation company specializing in intermodal freight services.
   ➡️ Projected $12.44B revenue with improving market conditions
   ➡️ Strategic focus on operational efficiency enhancing margins
4. HCA Healthcare (NYSE:HCA)
   Largest U.S. hospital operator with over 180 facilities.
   ➡️ 2025 projections indicate $74.57B revenue with $6.16B net income
   ➡️ Strong EPS forecast of $24.32 with 26.5% upside potential
5. Lockheed Martin (NYSE:LMT)
   Leading aerospace and defense company specializing in military aircraft.
   ➡️ Projected 5.5% revenue growth to $71.26B
   ➡️ Strong defense spending driving $555.30 mean price target
6. LPL Financial (NASDAQGS:LPLA)
   Largest independent broker-dealer providing investment advisory services.
   ➡️ 20.7% projected revenue growth to $12.13B
   ➡️ Exceptional 50.2% ROE with strong market position
7. Fortinet (NASDAQGS:FTNT)
   Global leader in cybersecurity solutions and network security.
   ➡️ 11% revenue growth to $5.89B with $1.73B net income
   ➡️ Strong margins with 35.1% operating efficiency
8. IDEX (NYSE:IEX)
   Manufactures specialized pumps and engineered industrial products.
   ➡️ Stable $3.28B revenue forecast with $598M net income
   ➡️ Consistent 18.1% ROE with strong dividend growth
9. KLA (NASDAQGS:KLAC)
   Leading provider of semiconductor manufacturing process control solutions.
   ➡️ 18% revenue growth to $11.57B with $4.04B net income
   ➡️ Strong Buy rating with $785.84 mean price target
10. Intel (NASDAQGS:INTC)
    Designs and manufactures processors and AI chips.
    ➡️ $52.64B revenue forecast with focus on AI transformation
    ➡️ Strategic foundry services expansion driving growth potential

Each bull case of the stocks above was generated by WarrenAI, your personal AI researcher.

Octopus Renewables Infrastructure Trust plc

(“ORIT” or the “Company”)

Q4 2024 Dividend Declaration and FY25 Increased Dividend Guidance

Q4 2024 Dividend Declaration

The Board of Octopus Renewables Infrastructure Trust plc is pleased to declare an interim dividend in respect of the period from 1 October 2024 to 31 December 2024 of 1.51 pence per ordinary share, payable on 28 February 2025 to shareholders on the register at 14 February 2025 (the “Q4 2024 Dividend”). The ex-dividend date will be 13 February 2025.

The Q4 2024 dividend is the final of four dividends totalling 6.02 pence per Ordinary Share (FY 2023: 5.79 pence per Ordinary Share) for the financial year to 31 December 2024 (“FY 2024”), meeting the Company’s FY 2024 dividend target in full. The dividend is fully covered by cash flows arising from the Company’s portfolio of assets.

A portion of the Company’s dividend is designated as an interest distribution for UK tax purposes. The interest streaming percentage for the Q4 2024 Dividend is 57.2%.

Increased Dividend Guidance for FY 2025

In line with the Company’s progressive dividend policy, the Board of Octopus Renewables Infrastructure Trust plc is pleased to announce an increase in the target dividend to 6.17p* per ordinary share for the financial year from 1 January 2025 to 31 December 2025 (“FY 2025”).

This increase of 2.5% over FY 2024’s dividend target is in line with the increase to the Consumer Price Index (CPI) for the 12 months to 31 December 2024 and marks the fourth consecutive year the Company has increased its dividend target in line with inflation. The FY 2025 dividend target is expected to be fully covered by cash flow generated from the Company’s operating portfolios.

Phil Austin, Chair of Octopus Renewables Infrastructure Trust plc, commented: “The Board is pleased to declare its final interim dividend for the financial year which, combined with the three prior quarters, meets our FY 2024 target of 6.02 pence per Ordinary Share and delivers shareholders with a yield of 8.9% at yesterday’s closing share price.

“We are also pleased to announce, for the fourth consecutive year in a row, an increase in dividend guidance in line with inflation. This is expected to be fully covered by operating cash flows and demonstrates our commitment to a progressive dividend policy.”