Stage Set For AI-Driven Tech Rally By Year-End, Says Wedbush By Investing.com

Tech stocks are poised for double-digit growth through the end of the year, followed by an even stronger run in 2025, Wedbush analysts said on Sunday.

After spending several weeks in Asia, Wedbush said it became even more confident in its “AI Revolution” claim. The firm highlights unmatched demand in the supply chain for AI chips, led by Nvidia (NASDAQ:

Analysts say this increase in demand is driving a significant increase in enterprise spending as AI use cases expand across industries. They estimate that the overall AI infrastructure market could grow tenfold by 2027, with $1 trillion in capital spending expected over the next three years.

Wedbush believes this wave of technology spending is seen as a major headwind for companies well-positioned in semiconductors, software, infrastructure and cybersecurity as more generative AI-based models become central to enterprise operations.

“We continue to see AI projects and strategic initiatives gain top priority in many enterprise IT budgets for 2025, which we believe is on the cusp of a major software-driven growth phase as the ‘use phase of AI’ becomes in the center of attention. CIO,” the analysts said in the note.

While Nvidia and Microsoft (NASDAQ: ) remain the main players in AI, they also see other major tech companies leading the AI ​​revolution, including Oracle (NYSE: ), ServiceNow (NYSE: ), Palantir (NYSE: ), Salesforce (NYSE: ), Dell (NYSE: ), IBM (NYSE: ), Apple (NASDAQ: ), AMD (NASDAQ: ) and others.

“In short, we believe the stage is set for tech stocks to move 10%+ by the end of the year and another 20% in 2025, as this tech market is just entering its next stage driven by the AI ​​Revolution,” the analysts continued.

“In our view, as the Fed and Powell begin their aggressive rate cut cycle, the macrosoft landing remains the way, and AI tech spending remains a generational spending cycle that is just beginning to touch the shores of the tech sector,” they added them.

Wedbush believes the market is underestimating the unique effects of the AI-driven technology spending transformation trend. The firm expects margin and upside benefits from AI to serve as a key catalyst for growth in tech stocks through 2025.

Also, while volatility is possible ahead of the US presidential election, Wedbush analysts anticipate a “very strong Q3 tech earnings season.”