Tech Stocks Set for Rally

Tech stocks are poised for a double-digit rally by year-end, followed by a stronger bull run in 2025, according to Wedbush analysts.

After spending several weeks in Asia, Wedbush has grown more confident in its “AI Revolution” demand thesis. The firm highlights unmatched demand for AI chips in the supply chain, primarily driven by Nvidia (NASDAQ:NVDA).

Analysts indicate that this surge in demand is causing a significant rise in enterprise spending as AI use cases proliferate across various industries. They estimate that the overall AI infrastructure market could grow tenfold by 2027, predicting $1 trillion in AI capital expenditures over the next three years.

Wedbush views this trend in tech spending as a major boon for well-positioned companies in sectors like semiconductors, software, infrastructure, and cybersecurity, as generative AI-driven models become integral to enterprise operations.

Analysts noted that AI projects and strategic initiatives are becoming top priorities within many enterprise IT budgets for 2025. They believe the tech industry is on the brink of a significant phase of software-driven growth, with the “AI use case phase” becoming central for CIOs.

While Nvidia and Microsoft (NASDAQ:MSFT) are leading in the AI domain, other tech giants like Oracle (NYSE:ORCL), ServiceNow (NYSE:NOW), Palantir (NYSE:PLTR), Salesforce (NYSE:CRM), Dell (NYSE:DELL), IBM (NYSE:IBM), and Apple (NASDAQ:AAPL) are also propelling the AI revolution.

Wedbush asserts that tech stocks are anticipated to increase by over 10% by year-end and another 20% in 2025, marking the next phase of the bull market driven by the AI Revolution.

They believe that the market is underestimating the extensive effects of this transformational trend in AI-led tech spending. The firm expects that the margin and growth benefits from AI will be key catalysts for boosting tech stocks into 2025.

Although volatility is expected leading up to the U.S. Presidential Election, Wedbush analysts predict a strong Q3 tech earnings season.