From cutting-edge semiconductor software to strategic airport operations, critical mineral development and commercial aircraft leasing, these stock picks reflect a shared emphasis on innovation, resilience and the ability to capitalise on evolving market dynamics.
In this first instalment of our series, we hear from asset managers who are spotlighting the sectors they believe will see significant growth in 2025. Their insights focus on emerging trends, evolving market demands and the strategic approaches they see as key to capitalising on the opportunities ahead.
Patrick McKeegan, CFA, portfolio manager and research analyst, Franklin Equity Group
One investment that we think has significant potential is Synopsys (Nasdaq: SNPS). Synopsys is a leading provider of electronic design automation software that is critical for the development of new semiconductor chips. Synopsys is a highly innovative technology leader, and the strength of their products has contributed to a duopoly-like structure globally for their “mission critical” offering. We believe that both the broadening use cases for semiconductors (for example, they are now in washing machines) and the increasing complexity and sophistication of semiconductor design (such as the latest graphics processing units and artificial intelligence accelerators that power the generative AI evolution) will contribute to strong and sustained growth for Synopsys’ subscription-like services.
Additionally, we see Synopsys’ announced acquisition of Ansys (expected to close in the first half of 2025) as transformative, and we see their goal of enabling and accelerating the integration of systems and silicon as visionary.
Charles Hamieh, portfolio manager, ClearBridge Investments
Fraport, the operator of Frankfurt Airport – one of Europe’s busiest travel hubs – is more than just a leader in Germany. It has a global footprint, managing airports in Greece, Brazil and Peru.
Frankfurt Airport benefits from a dual-till regulatory system, which not only provides stable aeronautical revenues but also allows the company to unlock higher returns from its unregulated retail and service operations.
Looking ahead, Fraport’s Terminal 3 project is set to take off in 2026. With advanced security technology and a 12,000 square metres premium retail space featuring 60 new shops, it promises to significantly boost earnings and operational efficiency.
Furthermore, the project is expected to position Fraport to free cash flow positive, paving the way for dividend reinstatement and balance sheet strengthening. With the recent share price dips tied to geopolitical uncertainties, Fraport presents a compelling investment opportunity. Its strong infrastructure, strategic initiatives, and long-term potential make it a standout in the sector.
Emanuel Datt, CIO, Datt Capital
WA1 Resources (ASX: WA1) is a mineral developer in the process of commercialising its world-class Luni niobium project, located in Western Australia, the world’s best mining jurisdiction. Luni has an incredible resource endowment that has the potential to support a multigenerational life of mine likely to be well in excess of 100 years, at grades similar to the world’s largest producing mine.
Niobium is an incredibly rare critical metal used primarily in high-quality steels and has emerging uses in fast-charging battery technologies. Niobium is produced solely from three operating mines globally, two located in Brazil and one located in Canada. Niobium is a highly strategic critical metal given its importance in advanced, emerging technologies and its scarcity in supply. It is listed within the top three most critical metals by all leading major economies including the US, EU, UK, Japan, India, Korea and Australia.
Luni is the only commercial niobium asset globally that has no Chinese stakeholders and represents an important source of future niobium supply wholly controlled by a single Western company. We anticipate positive returns as the company continues along its path of commercialising the project.
Sorin Roibu, CFA, portfolio manager and research analyst, Brandywine Global
AerCap, the world’s largest owner of commercial aircraft, is well-positioned to capitalise on the current shortage of planes due to Boeing’s production issues. It already is a global leader in commercial aircraft leasing. The company’s scale and market leadership enabled it to command favourable pricing in the current environment. Aircraft production shortfalls are coming up against growing demand for air travel. Aircraft lessors and premier airline franchises that can capitalise on constrained industry supply may benefit.
The airline industry is facing a significant challenge that could impact travellers’ wallets in the coming years: a shortage of commercial aircraft. Due to manufacturing issues at Boeing, including the grounding of the 737 Max and production slowdowns from COVID-19, approximately 2,700 new planes that were expected to be built over the last five years never materialised. This supply crunch is happening at the same time that demand for flights has largely recovered to pre-pandemic levels in most markets outside of China.
It could be good news for investors in aircraft lessors and premier airline franchises that can capitalise on constrained industry supply. We see opportunity in this imbalance between constrained supply and rebounding demand. Additionally, valuations across the airlines sector are attractive.
The information featured in this article is general in nature and does not take into consideration your financial consideration or individual needs, and should not be relied upon.
