Artificial intelligence became approximately 10 times smarter in 2024, and as such, I thought it might be pretty good at stock picking. So, I asked Google’s artificial intelligence (AI) platform Gemini (formerly Bard) for the five best stocks for me to buy in 2025. Here’s what it said.
Google says…
Predicting the ‘best’ stocks is risky, as the market is constantly changing. However, based on current trends and analyst opinions, here are five UK stocks that could potentially perform well in 2025:
- Diageo: this global beverage giant owns iconic brands like Johnnie Walker, Guinness, and Smirnoff. It has a strong track record of growth and a resilient business model.
- AstraZeneca: a leading pharmaceutical company with a robust pipeline of innovative drugs. AstraZeneca is well-positioned to benefit from the aging global population and the increasing demand for healthcare.
- Unilever: a consumer goods giant with a diverse portfolio of brands, including Dove, Lipton, and 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 boost its lending margins. However, the economic outlook remains uncertain, which could impact the bank’s performance.
- Shell: the major oil and gas company is transitioning to renewable energy sources, but still generates significant profits from its fossil fuel businesses. The price of oil and gas is volatile, which creates both risks and opportunities for investors.
Conventional choices
Well, where to start? Maybe it’s best to start by highlighting that NatWest isn’t the UK’s second-largest bank. However, other than that, these look like some fairly conventional stock picks, with a weighting toward consumer goods stocks, which may perform better in rate cutting cycles.
Likewise, Shell and AstraZeneca are the two largest stocks by market cap on the FTSE 100. Shell is a diversified energy company although it remains highly reliant on hydrocarbon revenues. It also trades at a pronounced discount to its Big Six American peers.
Meanwhile, AstraZeneca shares have pushed lower in recent months following the commencement of an investigation in China. However, several analysts have suggested this could be a good opportunity to buy stock in biotech-pharma giant with the price-to-earnings-to-growth (PEG) ratio falling to 1.4.
Why NatWest?
Gemini’s investment theses might lack detail, but there are compelling reasons to believe NatWest could rebound strongly in 2025. Historically, banks have performed well during interest rate cutting cycles, which could create favourable conditions for NatWest to rally further.
Lower interest rates often stimulate borrowing and economic activity, boosting bank profitability through increased loan demand. Moreover, banks have hedging strategies to mitigate the impact of fluctuating interest rates, and these strategies can actually push margins higher when central banks cut rates.
While challenges remain, including navigating economic uncertainties and resurgent inflation partially driven by Labour’s first budget, the potential for improved performance in a supportive monetary environment makes NatWest a stock to watch.
