They say a rising tide lifts all boats. Well, the reverse is true, too: A falling tide lowers all boats. As it is in the water, so it is in the stock market.

Case in point: As of this writing, the tech-heavy Nasdaq Composite (^IXIC 1.41%) has fallen by more than 9% year to date. As the index has fallen, so have many prominent tech stocks. Apple is down 15%, Alphabet has lost 15%, and Nvidia has given up 12% of its value so far this year.

Yet, some notable stocks have stood out. Let's examine two that have outperformed the market so far: Spotify Technology (SPOT 2.84%) and Meta Platforms (META 0.25%).

Image source: Getty Images.

1. Spotify Technology

First up is Spotify Technology.

As of this writing, the audio streaming giant is up an impressive 28% year to date. That shows what's called relative strength -- meaning the stock is outperforming, regardless of whether the market is moving up or down. Basically, relative strength is a sign that investors favor a particular stock over the average stock that could be purchased.

So, why are investors excited about Spotify? In a nutshell, investors like the company's growth -- along with its newfound profitability.

Spotify has a long history of fast growth. Over the last five years, the company has averaged quarterly revenue growth of nearly 18%.

SPOT Operating Revenue (Quarterly YoY Growth) data by YCharts

Yet, what seems to be behind the company's recent stock surge is its skyrocketing profitability. Like fellow video-streaming provider Netflix, Spofity seems to have worked out the formula for maximizing its profits. It has turned recent net losses in 2022 and 2023 into profits in 2024 thanks to a combination of price increases and cost-cutting.

Back in 2021, Spotify reported an annual diluted earnings per share (EPS) loss of $3.54. In 2024, the company turned that around, notching a positive diluted EPS of $5.95.

SPOT EPS Diluted (Annual) data by YCharts

That's an impressive turnaround, and it's why long-term growth investors should keep Spotify on their radar in 2025.

2. Meta Platforms

Then there's Meta Platforms.

As of this writing, shares of Meta are essentially unchanged for the year. That's hardly remarkable for a stock that has delivered greater than 100% gains in several years, but it is a significant outperformance compared to some of the major stock indexes this year.

So what's Meta doing right?

First, one of Meta's greatest assets is its sheer scale. Because the company has over 3.3 billion daily average users (DAUs), much of its business model runs almost on autopilot. Every day, billions of people log in to view Facebook and Instagram, check their feeds, and are served up with a smattering of ads. As a result, Meta rakes in around $500 million every day from advertisers who place ads on its social media feeds.

What's more, Meta then ensures that a gargantuan share of that revenue is converted into profit and free cash flow. In its most recent quarter (the three months ending Dec. 31), Meta generated:

• $48 billion in revenue
• $21 billion in net income
• $13 billion in free cash flow

That's an extraordinary amount of sales, profits, and free cash flow. And crucially, free cash flow can be used to increase shareholder value through stock buybacks, reducing debt, or paying dividends.

In short, Meta's shares are gaining relative strength thanks to the company's lucrative business model that delivers robust sales, big profits, and steady free cash flow that can be used to grow the business or return cash to shareholders. That makes it a leading tech stock that investors might want to consider in 2025.