After a pullback in late 2024, AI stocks are poised to resume their climb in 2025, a Wall Street analyst says.
"We believe tech stocks will be robust in 2025 on the shoulders of the AI Revolution and $2 trillion+ of incremental AI capex (spending) over the next 3 years," Wedbush Securities analyst Daniel Ives said in a client note late Monday.
Ives said he expects tech stocks to rise 25% in 2025 as Wall Street and investors digest "a less regulatory spiderweb" under the administration of President-elect Donald Trump. Also, stronger artificial intelligence initiatives in the federal government should give the sector a boost, he said.
However, there could be some "white-knuckle moments" in the year ahead over Federal Reserve actions, the "China tariff poker game," and a chorus of bears saying valuations are stretched, he said.
"This will create the opportunities to own the tech theme and key names which has been our core investing tech playbook the last 2 years," Ives said.
Nvidia Tops Among AI Stocks
Ives identified 10 stocks that he called "tech winners for the AI revolution in 2025."
AI chip powerhouse Nvidia leads the list, followed by cloud computing giant and OpenAI partner Microsoft.
Rounding out the list are Palantir, Tesla, Google parent Alphabet, Apple, MongoDB, Pegasystems, Snowflake and Salesforce.
Among AI stocks, Nvidia and the cloud computing stalwarts remain the driving force in the artificial intelligence megatrend, Ives said. However, software makers are set to join the "AI party" as use cases increase, he said.
"The AI Software era is now here in our view," he said. "We believe the two best software plays on the AI Revolution into 2025 remain Palantir and Salesforce."
AI Stocks On IBD Lists
Of the 10 AI stocks named by Wedbush, five are on IBD's Tech Leaders list. They are Alphabet, Apple, Nvidia, Palantir and Salesforce.
Nvidia also is on IBD's Leaderboard and SwingTrader lists. Alphabet and Tesla are on Leaderboard as well.
Palantir is on three stock lists: IBD 50, Big Cap 20 and Sector Leaders.
And Microsoft is in the Long-Term Leaders Portfolio.
Elsewhere on Wall Street, research firm Evercore ISI on Tuesday released its top software stock recommendations for 2025.
Evercore named Microsoft, Salesforce and Oracle as its top "core compounders." It said those companies are well positioned to integrate AI into corporate systems for its customers.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
