The first half of 2025 was a gauntlet for markets. U.S.-China trade tensions reignited with tariffs averaging 15.8% by June, the highest since 1936, threatening to push consumer prices higher. Geopolitical flare-ups in the Middle East sent oil prices on a rollercoaster ride, while supply chain snags persisted. Moreover, inflation, while down from 2024’s 2.9% to 2.7% by June, still hovers above the Fed’s 2% target, with core inflation at 2.9% signaling persistent pressures.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
A tech sector correction and a volatile VIX added to the chaos. Yet, Booking Holdings (BKNG), Taiwan Semiconductor (TSM), and Caterpillar (CAT) powered through, hitting all-time highs.
Here’s why these three stocks are shining at the midway point of 2025, despite the chaotic market events that have unfolded over that time.
Booking Holdings (NYSE:CAT) | Travel’s Comeback King
Booking Holdings is currently riding a wave of wanderlust, with its stock surging 15% year-to-date, hitting record highs, after its already 40%+ rally last year. Analysts at J.P. Morgan raised their price target to $6,000 in June, citing solid travel demand, with Q1 gross bookings up 10.2% year-over-year to $43.5 billion. As we advance, growth is expected to be powered by strong hotel and alternative accommodation bookings. Then you have their AI-driven personalization potential, such as tailored trip suggestions, which is likely to unlock significant value, thus keeping investors excited.
All of this momentum, of course, is powered by a durable post-COVID rebound in global travel, especially in the Asia-Pacific region, where bookings grew 15% year-over-year, and a push into experiences, such as tours and activities, which now accounts for 12% of revenue.
However, there are some headwinds, including rising fuel costs and foreign exchange fluctuations, which could put pressure on margins. I would also flag stiff competitive pressures from Airbnb (ABNB). Still, Booking’s scale, with 1.8 million properties across its platforms, and data-driven edge make it a powerhouse in a world itching to explore. At 26 times this year’s expected EPS, the valuation isn’t crazy either.
Is BKNG a Buy, Hold, or Sell?
Currently, most analysts covering BKNG stock are bullish. The stock now carries a Moderate Buy consensus rating, based on 18 Buy and eight Hold ratings assigned over the past three months. Notably, no analyst has assigned the stock a sell rating. However, BKNG’s average stock price target of $5,605.52 implies ~1% downside over the next twelve months, suggesting that Wall Street believes BKNG is already priced to perfection.
TSMC (NYSE:TSM) | The Chipmaker of Tomorrow’s World
Taiwan Semiconductor is the backbone of the AI revolution, so it’s not surprising its stock is up 25% year-to-date. The company’s Q2 profit soared 61% to NT$361.56 billion (~$12.3 billion), with June revenue up 26.9% and first-half sales climbing 40%. Needham raised its price target to $270, citing AI chip demand through 2027, while Barclays has raised its target to $275 with a Strong Buy rating. Morgan Stanley views TSMC’s 30% revenue growth forecast for 2025 as a buy signal, although Bernstein has trimmed its target to $249 due to a stronger Taiwan dollar.
Overall, TSM’s prospects remain excellent. The company dominates the global chip foundry market with a 60% share and accounts for 90% of advanced chip production, supplying giants such as Nvidia (NVDA) and Apple (AAPL).
Their 3nm chips, which account for 22% of Q1 revenue, are fueling AI’s rise. To counter tariff risks, such as the 32% tariffs Taiwan faces, they’re expanding into Japan and the U.S., thereby bolstering supply chain resilience. Currency headwinds and trade tensions could pose challenges, but TSM’s grip on cutting-edge technology keeps it indispensable.
At 25x forward consensus EPS estimates, the stock remains attractively priced, in my view, especially considering that it is no longer a cyclical company, given the long-term tailwinds AI brings to the semiconductor space.
Is TSMC a Good Stock to Buy?
TSM is currently covered by six Wall Street analysts, all of whom hold a bullish outlook. The stock carries a Strong Buy consensus rating with all six analysts assigning a Buy rating over the past three months. TSM’s average price target of $254.33 suggests ~3.5% upside potential over the next twelve months.
Caterpillar (NYSE:CAT) | Digging Deep in a Shifting Economy
Caterpillar is the quiet industrial giant, grinding out a 16% stock gain thus far this year despite economic headwinds. Its Q1 revenue rose 5% year-over-year, with strong margins in the Energy & Transportation segment. Additionally, J.P. Morgan raised its price target to $475 from $395 in July, citing global infrastructure spending and favorable legislative tailwinds, such as bonus depreciation, which are expected to benefit the stock. Demand in emerging markets, particularly for mining and power generation, continues to drive cash flow, and that trend doesn’t seem to be fading away anytime soon.
CAT’s strength lies in its diversified portfolio, which ranges from bulldozers to generators, and capitalizes on global projects. Their pricing power offsets rising steel costs, though supply chain hiccups and softening U.S. demand pose risks.
Still, their push into sustainable technology, like electric construction equipment, positions them for growth. I don’t think Caterpillar is a cyclical industrial play, but a bet on a world that’s always building. At 22x this year’s expected earnings, CAT stock isn’t exactly a value play, but I don’t believe it’s expensive either.
Is Caterpillar a Buy or Sell?
On Wall Street, CAT stock carries a Moderate Buy consensus rating based on eight Buy and six Hold ratings. Notably, no analyst rates the stock a sell. CAT’s average stock price target of $410.43 implies roughly 2% downside potential over the next twelve months.
Final Thoughts
Despite a rocky macro backdrop, Booking, TSMC, and Caterpillar are proving that strong fundamentals and clear structural tailwinds can still drive outperformance. Whether it’s surging travel demand, the unstoppable rise of AI, or global infrastructure buildouts, each company is leaning into its edge.
Risks abound, from tariffs to FX shocks, but market leadership in today’s climate isn’t about perfection; it’s about resilience. In a jittery market, investors seem to be rewarding clarity, scale, and execution, and these three names boast all these qualities in abundance.