Wall Street Analyst Dan Ives Sees Tech Stocks Jumping Another 25% in 2025. Time to Buy?

Arguably, there’s been no bigger bull in the artificial-intelligence (AI) rally than Wedbush’s Dan Ives.

Ives has been cheerleading the AI boom since shortly after the debut of ChatGPT. In February 2023, the analyst said an AI arms race was shaping up following the launch of the generational AI chatbot.

That statement has been borne out, as Nvidia has raced ahead among chip stocks, fending off recent challenges from AMD and Intel. In addition, cloud infrastructure companies such as Microsoft, Alphabet, Amazon, and Oracle are rapidly buying Nvidia components to serve the AI demands of their own customers.

Ives’ prediction that tech stocks would gain 20% in 2023 was also accurate, as the tech-heavy Nasdaq index finished up 24%. He also called 2024 the “year of AI,” saying that tech stocks would jump 25%. That was also correct.

Now, Ives is banging the drum for tech stocks to continue to rise in 2025, driven by the AI boom. In a recent post on X, Ives predicted that stocks would jump 25% in 2025, building on its gains over the past two years.

An investor reading the newspaper. — Image source: Getty Images.

Ives has argued before that the AI boom will take the form of a multiyear rally in the stock market, much like the dot-com boom of the 1990s, which lasted for five years before ending in a crash.

Despite some concerns that an AI bubble may be forming, signs are generally pointing to a continued rally in AI stocks. First, revenue and profit are likely to continue to soar as stocks like Nvidia are still reporting rapid growth, and other stocks are joining the AI rally, including Micron and now a number of software companies.

There are also larger macro trends that could drive tech stocks higher. In particular, Ives noted a benefit from Lina Khan’s stepping down as head of the Federal Trade Commission. Khan has led several high-profile lawsuits against big tech companies, and the regulatory framework is expected to be friendlier to big business under President Trump.

In addition, investors seem to be anticipating support from the new administration for AI initiatives, as tech stocks jumped following the election. Meanwhile, the race to artificial generative intelligence is well under way, and as long as companies such as OpenAI are working toward achieving that goal, spending on cybersecurity is likely to remain strong.

Tech stocks are coming into 2025 with a lot of momentum, but the biggest risk factor at this point is the valuation. The Nasdaq is up more than 50% over the past two years, and it’s now about as expensive as it’s been at any point since the dot-com bubble.

The Invesco QQQ Trust (NASDAQ: QQQ), which tracks the Nasdaq 100, or the 100 most valuable Nasdaq stocks, now trades at a price-to-earnings (P/E) ratio of 35, and many of the “Magnificent Seven” stocks that make up much of the value of the Nasdaq seem inflated. Apple, for example, now trades at a P/E of 41, and its market cap is approaching $4 trillion, even as revenue is expected to grow by only mid-single digits this year.

Ives’ bullishness isn’t unreasonable, as spending on capital infrastructure to support AI is likely to increase. But with valuations already looking stretched, achieving another 25% increase for the Nasdaq won’t be so easy.

Rather than piling into tech stocks on autopilot, a better strategy would be tactfully investing in this industry. Either wait for pullbacks in specific stocks after doing due diligence in the underlying business, or buy ETFs such as the Invesco QQQ Trust to help diversify risk, or use a combination of both.

With stocks now trading at lofty valuations and a new administration likely to introduce more uncertainty into the stock market, 2025 is likely to be a volatile year for investors. But they’ll probably have opportunities to capitalize on sell-offs, much as we saw after the Federal Reserve scaled back its forecast for rate cuts.

Keeping some dry powder on hand for such movements will almost always pay off, as the AI boom still has the ability to carry the tech sector higher over the next few years. But there should be plenty of pullbacks as the market wrestles with higher prices for the biggest tech stocks.

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Invesco QQQ Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $842,611!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of December 30, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Amazon. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Intel, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short February 2025 $27 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Wall Street Analyst Dan Ives Sees Tech Stocks Jumping Another 25% in 2025. Time to Buy? was originally published by The Motley Fool

As we head into the new year, Wall Street analyst Dan Ives is making bold predictions about the future of tech stocks. According to Ives, he sees tech stocks jumping another 25% in 2025, signaling a potentially lucrative opportunity for investors.

With the rapid advancements in technology and the increasing reliance on digital solutions, it’s no surprise that tech stocks are continuing to soar. Companies in sectors such as artificial intelligence, cloud computing, and e-commerce have shown tremendous growth potential in recent years, and Ives believes this trend will only continue in the coming years.

For investors looking to capitalize on this projected growth, now may be the perfect time to buy tech stocks. While there is always some level of risk involved in investing, the potential rewards could be substantial for those willing to take the leap.

Of course, it’s always important to do your own research and consult with a financial advisor before making any investment decisions. But with Ives’ optimistic outlook on tech stocks, it may be worth considering adding some tech companies to your portfolio in 2025.

Tags:

Wall Street analyst
Dan Ives
Tech stocks
Stock market
Investment opportunities
Financial predictions
Market trends
Buying stocks
Stock market forecast
Technology sector
Investment advice
Wall Street predictions
Tech industry analysis
Stock market growth
Financial analysis

#Wall #Street #Analyst #Dan #Ives #Sees #Tech #Stocks #Jumping #Time #Buy

Wall Street Analyst Dan Ives Sees Tech Stocks Jumping Another 25% in 2025. Time to Buy?

Comments

Leave a Reply Cancel reply

More posts

Deb Haaland, Ex-Interior Secretary, Is Running for Governor of New Mexico

Understanding the Value of IT Consulting in Today’s Technology Landscape

Exeter City v Nottingham Forest, Juventus v PSV, and more: football – live | Champions League

The Cost of Downtime: Why Business Continuity Planning is Essential for Every Business