
Stage Set for AI-Driven Tech Rally Into Year-End, According to Wedbush
Tech stocks are set for a double-digit increase by the end of the year, with an even more robust bull market expected in 2025, according to analysts from Wedbush.
After an extended visit to Asia, Wedbush has expressed heightened confidence in its “AI Revolution” demand thesis, noting exceptional demand within the supply chain for AI chips, particularly driven by Nvidia.
The analysts highlight that this surge in demand is leading to a substantial rise in enterprise spending as AI applications grow across various sectors. They forecast that the overall AI infrastructure market could expand tenfold by 2027, anticipating $1 trillion in AI capital expenditures over the next three years.
This wave of technology spending is viewed as a significant advantage for well-positioned companies in semiconductors, software, infrastructure, and cybersecurity, as generative AI-driven models become integral to business operations.
Analysts noted, “We continue to see AI projects and strategic initiatives prioritized within many enterprise IT budgets for 2025. We believe we are on the brink of a major phase of software-driven growth as the ‘AI use case phase’ captures the attention of CIOs.”
While Nvidia and Microsoft remain at the forefront of the AI sector, other prominent tech firms are also contributing to the AI revolution, including Oracle, ServiceNow, Palantir, Salesforce, Dell, IBM, Apple, AMD, and more.
In summary, analysts believe the conditions are ripe for tech stocks to rally over 10% towards the year’s end and an additional 20% in 2025, as the tech bull market enters its next phase driven by AI advancements.
They also mentioned that with the Federal Reserve beginning an aggressive rate-cutting cycle, the economy is likely headed for a soft landing while tech spending on AI could represent a generational shift just beginning to impact the tech sector.
Wedbush believes that the market is underappreciating the far-reaching effects of the transformational trend led by AI-related tech spending. They expect that the growth and margin benefits from AI will be crucial in driving tech stocks upward through 2025.
Additionally, while some volatility may occur in the lead-up to the U.S. Presidential Election, Wedbush analysts forecast a strong Q3 earnings season for the tech industry.