AI-driven earnings growth is poised to become a critical driver for tech stocks in 2025, according to Barclays strategists led by Venu Krishna.
Key Highlights:
2023-2024 AI Impact:
AI narratives boosted equity returns significantly, with global AI stocks delivering 16.5% year-to-date returns compared to the MSCI ACWI Index’s 6% returns.
Gains thus far have been concentrated in hyperscalers (like Big Tech) and semiconductor companies.
Software Sector’s Surge:
Recent advancements, including generative AI co-pilots and Agent AIs, have propelled the software sector to outperform foundational hardware and hyperscalers.
Barclays predicts higher EPS growth in software stocks, driven by new AI functionalities and wider adoption.
AI Monetization Prospects:
Emerging AI applications promise significant productivity gains, creating new revenue streams and higher valuations in the tech sector.
Analysts see this as a key barometer for tech stocks, catalyzing sustained growth.
Relevant Data Insights:
Market Biggest Gainers API:
This API can track the biggest gainers in the market, providing insights into how stocks within sectors like technology and infrastructure have been performing amid the stimulus.
Sector Historical API:
This API offers a look into sector performance over time, useful for analyzing how market trends have shifted in response to similar fiscal measures in the past.
Market Context:
The shift to AI comes amid broader economic uncertainties, such as the Federal Reserve’s recent rate cuts and declining crude oil prices. The Nasdaq 100, dominated by tech, fell 0.4% on Tuesday, signaling market caution ahead of central bank decisions.
