Prediction: These 2 Stocks Will Crush the S&P 500 Over the Next 3 Years

The stock market has gotten off to a bumpy start in 2025, with the S&P 500 index down sharply. On the other hand, taking a buy-and-hold approach to great companies on the heels of recent valuation discounts could open the door for patient investors to see very strong returns.

With that in mind, read on to see why two Motley Fool contributors think that these stocks below will crush the S&P 500 over the next three years.

This company is on the verge of a game changer

Keith Noonan (Take-Two Interactive): The video game industry is now bigger than the movie industry and the music industry combined, and Take-Two Interactive Software (TTWO 0.09%) stands out as a leading player in the space. In fact, Take-Two would be my hands-down, go-to pick if I had to choose the one company most likely to release this next decade’s most successful entertainment product.

Later this year, the company is scheduled to launch Grand Theft Auto VI (GTA VI), the follow-up to the most profitable entertainment product ever. First released in 2013, Grand Theft Auto V has now sold more than 210 million copies. The game has also generated massive amounts of high-margin revenue through in-game purchases made by players of its online multiplayer mode.

GTA VI may or may not be able to match the unit sales of its series predecessor, but it’s almost certain that the game is going to be a massive earnings generator for Take-Two. The game is set to take the online multiplayer component to an even higher level, and in-game purchases made through Grand Theft Auto VI will be a huge performance driver for the company.

It is poised to be a disruptive release in the video game industry — so much so that some other publishers plan on avoiding the game’s release window rather than trying to release competing products in the same window. The highly awaited sequel is on track to dominate the sales charts this year and soak up tons of attention from players.

Some reports have even suggested that Take-Two could price a copy of Grand Theft Auto VI at roughly $100, which is significantly above the $70 level that’s the norm for big-budget, current-generation games. Whether or not the company will make that move is still unclear, but it wouldn’t be shocking to see the publisher flex the pricing power of its upcoming landmark release.

With GTA VI seemingly on the verge of shaking up the entertainment industry, Take-Two is one of my favorite stocks right now.

A no-brainer path toward growth

Jennifer Saibil (Dutch Bros): Dutch Bros continues to crush the market right now, up roughly 1% this year as the S&P 500 is down 15%. It has tons of opportunity, and it’s likely to keep outperforming the market over the next three years and beyond.

It operates a chain of nearly 1,000 coffee shops as of the end of 2024, and many of them are just drive-thrus. However, even outside of its stores, it’s creating an ambiance that consumers are warming up to, with broistas (its term for baristas) walking through the lanes and taking orders.

The focus is on speed and customer service, and as it rolls out new stores, it’s working with different formats to be able to handle demand efficiently. Customers also enjoy its distinctive branded beverages and price point, which is cheaper than leader Starbucks.

Dutch Bros is demonstrating robust growth and increasing profits. Revenue rose 35% year over year in the fourth quarter, driven by 32 new stores and a 6.9% year-over-year increase in same-store sales. Company-operated shop contribution profit increased 51% with a 28.9% margin, up 2.4 percentage points. Net income increased from a $3.8 million loss to $6.4 million.

Management has ambitions to expand to 4,000 stores over the next 10 to 15 years. It’s planning to open at least 160 stores in 2025, and it will need to accelerate the rate of openings to reach that goal. But if it can, it’s a no-brainer for sales growth.

At the same time, it’s rolling out stores with consumer preferences and profitability in mind. As it builds its brand presence and gains loyalty, it should be able to continue enjoying same-store sales growth as it expands, raising its potential. It also just launched a new mobile-order program that’s gaining traction and demonstrating promise as a growth driver.

There’s so much to expect from Dutch Bros over the next three years and longer, and the stock is a strong contender to keep beating the market.