The Most Popular Stocks for Investors in February 2025: Trends, Analysis, and Tips
February 2025 proved to be a rollercoaster for global investors, marked by escalating trade tensions, geopolitical risks, and rapid shifts in artificial intelligence (AI) investments. As markets grappled with the ripple effects of U.S. tariff policies and heightened defence spending, certain stocks emerged as clear favorites. In this deep dive, we analyze the top-performing sectors, highlight key stocks like Rolls-Royce (RR.L), Nvidia (NVDA), and Supermicro (SMCI), and provide actionable strategies for navigating post-tariff volatility.
Market Overview: Trade Wars and Geopolitical Risks
The month began with renewed trade tensions as former U.S. President Donald Trump announced reciprocal tariffs on China and ongoing disputes with Canada and Mexico. These policies stoked fears of inflation and slower economic growth, triggering a global sell-off. Meanwhile, geopolitical tensions flared after a contentious meeting between Trump and Ukrainian President Volodymyr Zelensky, prompting European nations to pledge increased defence budgets.
Against this backdrop, investors flocked to sectors with resilient growth potential: defence, AI infrastructure, and tech innovation. Below, we break down the standout performers.
1. Defence Stocks Surge Amid Geopolitical Uncertainty
Rolls-Royce Holdings (RR.L) emerged as a top pick on platforms like Interactive Investor and Hargreaves Lansdown as Europe’s defence spending surged. The Munich Security Conference in mid-February set the stage for heightened military investments, with nations prioritizing security amid escalating U.S.-Europe tensions.
- Why Rolls-Royce?
The British engineering giant, known for its aerospace and defence systems, saw increased demand for its propulsion technologies. With governments modernizing fleets and boosting cybersecurity, Rolls-Royce’s diversified portfolio positioned it as a safe haven. - Sector Outlook:
Analysts predict sustained growth in defence stocks as NATO members aim to meet 2% GDP spending targets. Competitors like BAE Systems (BA.L) and Lockheed Martin (LMT) also gained traction, but Rolls-Royce’s innovation in sustainable aviation fuels added an ESG edge.
2. AI Stocks: Volatility Meets Opportunity
The AI sector faced headwinds as DeepSeek launched a low-cost AI model, sparking concerns about overspending by tech giants. However, long-term optimism prevailed, with three stocks dominating conversations:
Nvidia (NVDA): The Chipmaker’s Rollercoaster
Nvidia’s stock tumbled 17% in February after its Q4 earnings missed lofty expectations. However, its CUDA software platform and 90% market share in AI GPUs kept investors engaged.
- Key Catalyst:
Despite tariff concerns, Nvidia’s chips remain critical for AI infrastructure. Analysts highlight a forward P/E of 24 and PEG ratio below 0.5, signaling undervaluation. - Risks:
Delays in data center spending and competition from AMD (AMD) could pressure margins.
Supermicro (SMCI): A High-Risk, High-Reward Play
Supermicro’s shares swung wildly, surging 11% on March 11 after Rosenblatt Securities raised its price target to $60. The server maker, which partners with Nvidia, rebounded from accounting scandals and delisting fears.
- Technical Analysis:
The stock broke out of a pennant pattern, with resistance levels at 48and48and63. Support sits at $38, making it a volatile but enticing pick for traders. - Growth Potential:
AI-driven revenue now accounts for 70% of sales, with 2025 projections hinting at a 34% YTD gain.
The Trade Desk (TTD): Betting on CTV Advertising
The ad-tech firm’s focus on connected TV (CTV) and AI-powered Solimar platform drove a 19% revenue CAGR. With a $29.9B enterprise value, it trades at 10x sales, appealing to growth-focused portfolios.
3. Value Picks: Stability in Turbulent Times
While AI and defence dominated headlines, value investors found opportunities in overlooked sectors:
Verizon (VZ): Dividend Aristocrat in the Making
Verizon’s 9.9x forward P/E and 6% dividend yield attracted income seekers. Strong cash flow ($19.8B in 2024) and broadband growth offset slower revenue gains.
Alibaba (BABA): AI Breakthroughs Spark Revival
Alibaba surged 15% in late February after unveiling an AI model rivaling DeepSeek. With a PEG ratio of 0.8 and e-commerce recovery in China, it’s a contrarian play.
4. Investor Tips for Navigating Post-Tariff Volatility
- Diversify Across Sectors: Balance defence stocks (stability) with AI growth picks (upside).
- Monitor Technical Levels: For volatile stocks like SMCI, set stop-loss orders near key supports (38,38,26).
- Focus on Cash Flow: Prioritize companies like Verizon with strong dividends and buyback programs.
- Stay Informed on Tariffs: Track updates on U.S.-China policies, which could impact tech and manufacturing.
- Long-Term AI Trends: Look beyond short-term noise; AI infrastructure spending is projected to exceed $500B by 2027.
Conclusion: Positioning for March and Beyond
February’s market shifts underscored the importance of agility. While defence stocks like Rolls-Royce offered shelter, AI leaders like Nvidia and Supermicro presented buying opportunities amid dips. As trade tensions persist, a mix of value and growth stocks—paired with disciplined risk management—will be key to thriving in 2025’s uncertain landscape.