Big tech stocks could have another big year in 2025.
Nvidia (NVDA),Amazon(AMZN), alphabet (google), Apple (AAPL) could continue to be some of the biggest winners Artificial intelligence-driven stock boomDavid Dietze, senior portfolio strategist at Peapack Private Wealth Management, said this in the latest episode of “Quartz AI Factor,” a video series set on the Nasdaq MarketSite.
Shares of AI chipmaker Nvidia (the “grandfather of them all,” in Dietze’s words) have soared more than 170% this year, giving it a market capitalization of about $3.3 trillion. Amazing revenue growth And overwhelming demand for that AI chip. The stock price of e-commerce giant Amazon is Participate in chip gamessoared more than 50%. Shares of Google’s parent company Alphabet rose 40%, while Apple rose more than 35%.
Magnificent 7 — Apple, Microsoft (MSFT), Nvidia, Alphabet, Amazon, Meta (meta), Tesla (TSLA) — has accounted for about a third of the S&P 500 index’s gains this year, driven largely by excitement around new AI technologies. However, Goldman Sachs (G.S.) warned This “extraordinary degree of market concentration” could pose major risks next year.
Stocks that benefited from the AI boom have done so largely independent of interest rates. But that doesn’t mean there’s no room for correction as the market settles from its post-election rally. Dietze said that could happen in the not-too-distant future.
“They’re riding a long-term tailwind of extreme innovation, and they have the potential to break through,” Dietze said. “That said, no department operates in a silo or a vacuum. If everything else around them is struggling, they’re going to struggle a little bit.”
Dietze said one of the key themes for 2025 will be “Show me the money.” Big companies like Amazon, Microsoft and Alphabet are pumping billions of dollars into AI partnerships and their own initiatives, but Dietze said investors will likely start looking for evidence of returns next year.
“Wall Street is a place where you say, ‘Show me the money like it was yesterday,'” he says. “These investments and capital expenditures are great, but when will the cash flow start coming in? And a lot of AI companies are admitting that now, but I think Wall Street will increasingly start saying, “No, I’ve seen the capital investment, it’s labeled as AI, but now I want to see the cash.” That’s where the flow comes in. ”
“And we’re going to be watching that closely next year,” Dietze said.
Watch the latest episode of Quartz AI Factor above.
