Wedbush says that technology stocks will rise 25% in 2025 once the new administration starts easing up on regulations. They also say that the AI change will create 10 winners, with Nvidia Corp. being the market leader.
Analysts led by Dan Ives wrote in a note to clients on Tuesday that software companies are finally joining the list.
“It’s time for the software industry as a whole to join the AI party because we think the use cases are going to explode. The enterprise consumption phase will start in 2025, LLM models will be released across the board, and generative AI will really take off. These will be huge steps forward for the software industry, and key players will be able to benefit from this once-in-a-generation fourth industrial revolution that will help the tech space,” Ives wrote in the note.
Ives wrote that Palantir PLTR -0.58% and Salesforce CRM -0.39% are still the two best software plays, but that many other companies are also in a good position to join the group. Six software names are on the list. MongoDB (MDB -0.15%), Pegasystems (PEGA +0.56%), and Snowflake (SNOW -0.06%) are among them.
Ives wrote, “The AI Software era is now here in our view.”
It will still be Nvidia NVDA -1.58% and other cloud leaders that drive AI.
The expert wrote, “The Godfather of AI Jensen and Nvidia started all of this $2 trillion+ in AI spending. They are still the only game in town, and their chips are the new gold and oil.”
When the next part of the AI revolution starts, other cloud and hyperscale players will also be very important. Microsoft MSFT -0.60% and Alphabet’s GOOGL -0.73% will be in the lead. Google Cloud Platform and Amazon Web Services (AMZN -0.44%) are also seeing growth in AI and the cloud in the coming years.
It is thought that the Trump White House will be less strict on regulations than the Federal Trade Commission was led by Lina Khan. Khan stopped a number of mergers and acquisitions on competition grounds and worked to limit the power of Big Tech.
Ives does admit that tech companies will face “white knuckle” moments, such as Trump’s planned tariffs on foreign goods, concerns about the Federal Reserve’s monetary policy with interest rates still high, and valuations that are already too high.
But, Ives said, “this will give us the chance to own the tech theme and key names, which has been our main tech investing playbook for the last two years.”
In 2024, Nvidia stock has gone up 177%, while the S&P 500 SPX -0.34% has gone up 24%.
