New Years Special: Tech Trends with Ives and Munster
Dec 31, 2024
auto_awesome
Gene Munster, Managing Partner at Deepwater Asset Management, and Dan Ives, Global Head of Tech Research at Wedbush Securities, dive deep into 2024's tech landscape and future trends. They discuss the transformative potential of artificial intelligence and its implications for both software and hardware companies. The duo predicts a burgeoning bull market fueled by AI, advises on key investment strategies, and highlights major players like NVIDIA and Palantir. Additionally, they touch on the competitive dynamics between the US and China in the realm of sovereign AI.
The ongoing evolution of AI is likely to lead to a robust bull market primarily benefiting hardware companies like NVIDIA in the near term.
In 2025, the tech landscape is expected to shift favorably towards software firms like Salesforce and Palantir as AI adoption accelerates across industries.
Deep dives
The Evolving AI Landscape
The ongoing development of artificial intelligence (AI) is presenting a transformative opportunity in the financial markets. Analysts believe that we are currently witnessing the early stages of a robust bull market in AI, with predictions suggesting significant growth over the next few years. One notable point is the substantial potential for hardware companies, with firms like NVIDIA leading the way as AI adoption swells. Despite this, the overall growth in software capabilities remains critical, as subtle improvements in software performance can signal a broader acceptance and implementation of AI technologies.
Investment Trends in Technology
In 2025, a major shift is anticipated within the tech investment landscape, particularly favoring software firms over traditional hardware companies. Analysts identify software giants like Salesforce and Palantir as key players poised to capture market share as the use cases for AI become more widespread. There is an expectation that software and tech services will see rapid growth due to increasing demand for AI capabilities across various sectors. As there is a move toward software-driven solutions, companies that adapt swiftly will be well-positioned to benefit from this change.
The Impact of Regulatory Changes
The regulatory environment surrounding big tech is expected to evolve in 2025, potentially lifting restrictions that have previously hampered growth and innovation. Analysts suggest that with a friendlier administration, there may be an uptick in significant acquisitions, enabling firms to bolster their AI capabilities and market reach. Historically, major tech companies faced periods of uncertainty; however, minor market pullbacks can present lucrative opportunities for experienced investors. This indicates a potential for healthy market fluctuations and a conducive environment for tech firms to thrive despite some initial regulatory hurdles.
The Future of AI Development
Looking ahead, the focus on capital investment in AI is predicted to sustain its momentum, with analysts projecting a heavy influx of $2 trillion in AI capital expenditure. This level of investment sets the stage for a thriving AI sector, surpassing previous technological booms such as the internet era. Moreover, as AI technologies permeate various industries, many believe that the capabilities developed today will fundamentally reshape productivity across the economy. Companies that effectively leverage AI advancements are expected to rise significantly, creating a landscape filled with winners in the technology sector.
Bloomberg’s Nathan Hager looks at the biggest tech stories from 2024 and what we can expect for 2025. He speaks with Gene Munster of Deepwater Asset Management and Dan Ives from Wedbush.