In this evolving world, attention to the surrounding environment and governance is required for companies to function efficiently and emerge as investors’ top preference. This is because many investors are prioritizing investing in ESG-compliant stocks in place of their non-compliant counters.

Against this backdrop, fundamentally sound ESG-led stocks Apple Inc. (AAPL), Microsoft Corporation (MSFT), and Tesla, Inc. (TSLA) could be ideal portfolio additions for potential gains in 2025.

The rising environmental concerns and increasing exploitation of natural resources have resulted in the inevitable need for reforms in the present system. Governments and regulatory bodies across the world are adopting stringent regulations to regulate the utilization and preservation. Alongside this, investors are becoming more aware and investing in ESG-focused stocks.

This has led to increased ESG compliance and reporting. ESG emphasizes the holistic view that sustainability extends beyond just environmental issues. Given the ongoing surge in ESG requirements, evolving regulatory frameworks, and rising investor expectations, US companies are increasingly prioritizing ESG initiatives and transparent disclosure.

In the New Year, certain ESG trends that will navigate operations include enhanced SEC climate disclosure rules, focus on social issues, the rise of ESG data and technology, and integration of ESG into financial reporting.

Further, the combined assets of mutual funds and ETFs, which invest as per the ESG criteria, increased by $24.62 billion to total $597.88 billion in last November, according to the Investment Company Institute’s monthly surveys. Environmental focus asset investing increased by 5.2% from the prior month to $63.50 billion, whereas Broad ESG Focus and Religious Values Focus investing grew by 4.1% over the month.

Amid this, investors could bag stocks of some industry-leading companies that not only have profitable potential but also operate ethically and adhere duly to the ESG requirements. Therefore, let’s look at some quality ESG stocks, AAPL, MSFT, and TSLA, which could be wise investment prospects this year.

Let’s discuss the fundamentals of these stocks in detail:

Apple Inc. (AAPL)

AAPL designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories globally. It offers iPhone, Mac, iPad, and wearables, as well as home accessories, including AirPods, Apple TV, Apple Watch, Beats products, and HomePod.

On December 11, AAPL released iOS 18.2, iPadOS® 18.2, and macOS® Sequoia 15.2 and launched a brand-new set of Apple Intelligence™ features to elevate users’ experience with iPhone®, iPad®, and Mac®. It features Image Playground, Genmoji, Writing Tools enhancements, seamless support for ChatGPT, and visual intelligence.

On December 9, AAPL announced its plans to expand in the Kingdom of Saudi Arabia, beginning with the launch of the Apple Store® online in the summer of 2025. The online store will allow customers across Saudi Arabia access to new ways to shop Apple’s full range of products. Customers will be offered exceptional service and support directly from Apple in Arabic for the very first time.

Also, on October 30, AAPL launched MacBook Pro®, powered by the M4 family of chips – M4, M4 Pro, and M4 Max, which offers much faster performance and enhanced capabilities. The new MacBook Pro is created for Apple Intelligence™, the personal intelligence system to make work, communication, and expression more efficient while protecting their privacy.

For the fourth quarter that ended September 28, 2024, AAPL’s total net sales increased 6.1% year-over-year to $94.93 billion. Its operating income came in at $29.59 billion, up 9.7% from the prior year’s quarter. The company’s adjusted net income and adjusted EPS stood at $24.98 billion and $1.64 for the quarter, respectively.

Furthermore, the company’s total assets were $364.98 billion as of September 28, 2024, compared to $352.58 billion as of September 30, 2023.

Analysts expect AAPL’s revenue and EPS for the first quarter (ended December 2024) to increase 4% and 8% year-over-year to $124.32 billion and $2.35. Furthermore, the company has surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.

Shares of AAPL have soared 10.7% over the past six months and 31.4% over the past year to close the last trading session at $243.85.

AAPL’s POWR Ratings reflect its robust outlook. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has an A grade for Quality and a B grade for Momentum. AAPL is ranked #20 out of 41 stocks in the Technology – Hardware industry.

Click here to access additional AAPL ratings for Sentiment, Growth, Value, and Stability.

Microsoft Corporation (MSFT)

MSFT develops and supports software, services, devices, and solutions worldwide. The company operates through Productivity and Business Processes segment; Intelligent Cloud segment; and More Personal Computing segment. It offers Office, Exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft Viva, and Microsoft 365 Copilot.

On November 19, MSFT and C3 AI (AI), the Enterprise AI application software company, entered into a strategic alliance to accelerate the adoption of Enterprise AI on Microsoft Azure.

The agreement marked a significant milestone in the companies’ existing collaboration, further combining C3 AI’s Enterprise AI–native application software, including C3 Generative AI, with Azure’s robust and expansive ecosystem to benefit enterprises globally.

On November 14, MSFT, along with Accenture (ACN) and Avanade, launched a copilot business transformation practice. The companies are co-investing in new capabilities, solutions, and training to help organizations securely and responsibly reinvent their business functions with generative and agentic AI and Copilot technologies.

For the third quarter that ended September 30, 2024, MSFT’s total revenue increased 16% year-over-year to $65.58 billion. The company’s operating income grew 13.6% from the year-ago value to $30.55 billion. Also, its net income and EPS of $24.67 billion and $3.30 indicate increases of 10.6% and 10.4% over the prior year’s quarter, respectively.

Street expects MSFT’s revenue for the second quarter (ended December 2024) to increase 11.1% year-over-year to $68.87 billion. Similarly, the company’s EPS for the same period is expected to grow 7.1% year-over-year to $3.14. Moreover, the company surpassed the consensus EPS and revenue estimates in all of the trailing four quarters.

Shares of MSFT have gained 12.9% over the past year to close the last trading session at $418.58.

MSFT’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Stability and Quality. Within the B-rated Software – Business industry, MSFT is ranked #17 of 41 stocks.

Click here to access additional ratings of MSFT for Sentiment, Value, Momentum and Growth.

Tesla, Inc. (TSLA)

TSLA designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems internationally. The company operates through two segments, Automotive, and Energy Generation and Storage.

TSLA’s trailing-12-month EBITDA and net income margins of 13.63% and 13.07% are 19% and 204.4% higher than the respective industry averages of 11.45% and 4.30%. Likewise, the stock’s trailing-12-month ROTA of 10.60% is significantly higher than the industry average of 3.97%.

During the fourth quarter, TSLA produced approximately 459,000 vehicles, delivered approximately 495,000 vehicles, up 6.9% from the prior quarter, and deployed 11.0 GWh of energy storage products.

TSLA’s total revenues rose 7.8% year-over-year to $25.18 billion during the third quarter that ended September 30, 2024. Its total automotive revenues increased 2% from the prior-year quarter to $20.02 billion. The company’s total gross profit grew 19.6% year-over-year to $5 billion. Also, TSLA’s adjusted EBITDA was $4.66 billion, reflecting an improvement of 24.1% from the prior year’s quarter.

Analysts expect TSLA’s revenue for the fourth quarter (ended December 2024) to increase 8.4% year-over-year to $27.28 billion. Likewise, the consensus EPS estimate for the same quarter of $0.76 indicates an improvement of 7.6% year-over-year.

TSLA’s stock has surged 64% over the past six months and 52.7% over the past year to close the last trading session at $379.28.

TSLA’s POWR Ratings reflect its promising outlook. The stock has a B grade for Sentiment and Quality. TSLA is ranked #33 of 51 stocks within the Auto & Vehicle Manufacturers industry.

To see additional POWR Ratings of TSLA for Growth, Value, Stability, and Momentum, click here.

What To Do Next?

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AAPL shares were trading at $242.88 per share on Friday afternoon, down $0.97 (-0.40%). Year-to-date, AAPL has declined -3.01%, versus a 0.98% rise in the benchmark S&P 500 index during the same period.

About the Author: Rjkumari Saxena

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More...

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