Palantir and Nvidia were among the top five winners of the Nasdaq 100 Index for 2024, up roughly 340% and 171%, respectively.
The two companies are leaders in their industry. Nvidia focuses on artificial intelligence hardware, providing GPUs that can power AI computing, and Palantir offers AI-driven data analytics software used by the U.S. government and enterprises.
Now, the story is continuing.
Wedbush expects tech stocks to rise 25% in 2025. Although risks arise from Federal Reserve interest rate policy, President-elect Donald Trump’s tariff proposals, and stretched stock valuations, “this will create the opportunities to own the tech theme and key names,” Wedbush analysts led by Daniel Ives wrote in a Dec. 30 report.
“We believe tech stocks will be robust in 2025 on the shoulders of the AI Revolution and $2 trillion+ of incremental AI [capital spending] over the next three years,” the firm said.
Wedbush analysts predict that 10 AI stocks will shine in 2025: Nvidia, Microsoft, Palantir, Tesla (TSLA) , Alphabet, Apple (AAPL) , MongoDB, Pegasystems, (PEGA) Snowflake and Salesforce.
Nvidia is still the king of AI
Nvidia (NVDA) and the cloud giants remain the AI driving force, Wedbush said.
“The start of this $2 trillion+ of AI spending all began” with Nvidia and “the godfather of AI,” Chief Executive Jensen Huang, “as they remain the only game in town, with their chips the new gold and oil,” Wedbush added.
Nvidia stock faced some recent weakness, closing at $138.31 on Jan. 2, off more than 7% since Nov. 7. Nonetheless, many Wall Street analysts remain bullish on Nvidia.
Related: Analysts reset Nvidia stock forecast ahead of major conference
Bank of America reiterated a buy rating on “sector top pick” Nvidia ahead of the CES event, thefly.com reported on Jan. 2.
The CES trade show in Las Vegas, kicking off on Jan. 6, will spotlight Nvidia with a keynote address from Huang. Bank of America sees it as a potential catalyst to affirm Nvidia’s “platform dominance.”
Morgan Stanley recently said “strong demand for Blackwell,” the company’s newest chip platform, “will prevail” over worries about Nvidia. The investment firm has an overweight rating and $166 price target on Nvidia stock.
Wedbush also predicts that cloud giants like Microsoft (MSFT) Azure, Google Cloud, and Amazon AWS will “continue to play an instrumental role in this key phase of the AI revolution,” gaining momentum into the coming years.
Related: Analysts revamp Microsoft stock price targets on AI chip-demand shift
AWS (AMZN) leads the cloud services market with a 31% share in Q3 2024, according to Synergy Research Group. Microsoft Azure held 20%, while Alphabet’s (GOOGL) Google Cloud edged up to 13% from 12% the previous quarter.
The next AI focus is software
Wedbush says that in 2025, the focus of the AI boom will shift from hardware titans like Nvidia to software disruptors, who are poised to steer those engines and empower enterprises to use data effectively.
“Software now invited to the AI party as use cases explode,” Wedbush said. “Now the time has come for the broader software space to get in on the AI party as we believe the use cases are exploding. [The] enterprise consumption phase is ahead of us beginning in 2025.”
Palantir and Salesforce (CRM) could benefit most from the shift.
Palantir (PLTR) joined the Nasdaq 100 Index on Dec. 23. The stock gained roughly 340% in the past year, making it one of the top performers among the index.
The surge in Palantir’s shares is driven by the company’s expanding role in AI and increased demand for the technology and its applications. Wedbush calls it “the Messi of AI,” a nod to the soccer star Lionel Messi.
Palantir helps governments and enterprises quickly and securely uncover insights from large datasets, with major clients including the U.S. government, Airbus, and Merck KGaA.
Related: Analysts sound alarms on Palantir stock into 2025
“This will be a major growth driver for the U.S. commercial business over the next 12 to 18 months as more enterprises head down the AI path with Palantir,” the investment firm said in a Dec. 26 report.
Salesforce stock rallied 25% in the past year, and Wedbush is optimistic about it into 2025.
Salesforce uses AI agents to help businesses connect with customers. The company reported fiscal-third-quarter results on Dec. 3. Revenue exceeded expectations, but earnings fell short.
With the AI revolution entering the software phase, Salesforce is well positioned to capture its share of an expanding market, a $7 trillion digital labor opportunity, Wedbush noted.
“We believe CRM is a clear second derivative beneficiary of the AI revolution that could add ~$80 per share to the CRM story as this monetization story takes shape over the next 12 to 18 months,” Wedbush added.
Two AI stocks that fell in ’24
Snowflake (SNOW) lost 22.4% in 2024, while MongoDB lost 43%, making it one of the biggest losers in the Nasdaq 100 Index.
MongoDB develops commercial support for open-source databases, enabling businesses to manage data across the cloud. It competes with cloud giants like AWS and Azure.
Shares of MongoDB tumbled in 2024 due to slowing revenue growth and disappointing guidance. Moreover, the company lost 17% on Dec. 10 after it said that Michael Gordon, longtime chief financial officer and chief operating officer, would leave at the end of January.
Analysts are mixed about MongoDB’s prospects.
More stocks’ performance in 2024
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Research firm Monness Crespi downgraded MongoDB to sell from neutral with a $220 price target, thefly.com reported.
MongoDB’s Atlas, one of its most popular managed database services, is “mired in a protracted growth slump and void of the powerful tailwind implicit in the industry’s [generative] AI propaganda,” the analyst said.
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