According to JP Morgan, the S&P will propel to new heights this New Year, and artificial intelligence is one of the reasons why. Besides AI, Strategist Dubravko Lakos-Bujas pointed to a resilient economy and the possibility of easier industry regulations as reasons for the boost, setting 6,500 as his 2025 target for the broad market index.
The U.S. will remain “the global growth engine with the business cycle in expansion, a healthy labor market, broadening of AI-related capital spending, and prospect of stronger capital market and deal activity”.
– Lakos-Bujas.
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US equities have already enjoyed a strong 2024, up 26% year to date due to enthusiasm around AI and a resilient economy. A tighter labor market, record wealth, and “potentially lower energy prices” are also reasons to celebrate. Investors have been happy about Donald Trump’s win as well, noted Lakos-Bujas, fueling their expectations of lower taxes and deregulation across industries.
“Heightened geopolitical uncertainty and the evolving policy agenda are introducing unusual complexity to the outlook, but opportunities are likely to outweigh risks. The benefit of deregulation and a more business-friendly environment are likely underestimated along with potential for unlocking productivity gains and capital deployment”.
In other news, artificial intelligence is stepping in to keep the Thanksgiving cheer alive, making sure holiday staples stay abundant and affordable for years to come.
“Cranberry production is challenging … [and] growers are really concerned about heat stress events”.
– Dr. Jeffrey Neyhart
Artificial intelligence is helping by speeding up the process of identifying heat-resistant varieties for cranberries. Researchers like Dr. Neyhart are using AI to save years of work and improve crop resilience in the face of climate change.
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A financial analyst looking at the news, analyzing the trends of the insurance market.
10. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 26
Lumen Technologies, Inc. (NYSE:LUMN) is a facilities-based technology and communications company, whose AI-driven fiber deals and other digital services have been helping it benefit from AI growth.
On November 29, Citi analyst Michael Rollins raised the firm’s price target on Lumen Technologies, Inc. (NYSE:LUMN) to $8 from $6.50 and kept a “Neutral” rating on the shares. The analysts reviewed Q3 results that were “generally mixed with respect to the operations”, and stated that the potential to monetize fiber services is becoming more important for wireless carriers. This is because they are facing tough competition from cable companies offering combined mobile and broadband packages, the analysts noted. The company has been expanding its network infrastructure to support the increasing demand for fiber services, leveraging AI-driven technologies to optimize network performance and deliver enhanced connectivity.
9. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 36
SAP SE (NYSE:SAP), a market leader in ERP software, leverages AI to enhance its enterprise resource planning (ERP) solutions.
On November 28, Stifel Nicolaus analyst Chandramouli Sriraman maintained a “Buy” rating on SAP SE (NYSE:SAP) and set a price target of €245.00. The buy rating comes from SAP SE’s robust growth prospects in its Cloud business, with projected mid-20s growth in Cloud revenue driven by the conversion of a large maintenance base, potentially adding over €25 billion in revenue. Moreover, SAP’s strategic initiatives, including the adoption of Business Technology Platform (BTP), RISE with SAP, and Cloud ERP Suite, are expected to boost cross-selling opportunities. Meanwhile, new AI tools from the company are further expected to bolster growth. These reasons, coupled with improving Cloud gross margins and economies of scale, justify the buy rating.
8. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 42
HP Inc. (NYSE:HPQ) is a technology company that specializes in personal computing and printing solutions.
On November 27, Goldman Sachs analyst Michael Ng reiterated a “Neutral” rating on HP Inc. (NYSE:HPQ) with a price target of $38, up from $35. The company delivered fiscal fourth-quarter 2024 EPS of $0.93, aligning with firm estimates. The Print segment’s performance was also strong and offset the miss in the Personal Systems (PS) division. Besides these factors, the firm expects mid-single-digit growth in PS for fiscal 2025, driven by Windows 10 end-of-life, a refreshed PC installed base, as well as the rise of AI PCs, which are anticipated to comprise 20% of shipments. HP anticipates stronger performance in the second half of fiscal 2025 due to an acceleration in PC demand, driven by the commercial segment, premium consumer systems, and AI PCs.
7. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 54
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.
On November 27, JPMorgan analyst Alex Yao downgraded Baidu, Inc. (NASDAQ:BIDU) to “Neutral” from Overweight. The downgrade comes from sharply decreasing macro earnings visibility due to uncertainty about the macro environment and the impact of its generative AI content. As a result, the firm has lowered its 2025 earnings outlook for Baidu, cutting estimates by 21%, 17% below Bloomberg’s consensus. The firm also forecasts Baidu’s core ads revenue growth weakness will bottom out in Q1 of 2025, followed by acceleration in each of the following quarters; albeit at an uncertain pace.
6. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 71
Datadog, Inc. (NASDAQ:DDOG) offers a cloud-based SaaS platform for monitoring and analytics, specializing in cloud computing and AI-powered cybersecurity products.
Datadog specializes in observability software whose products are built atop an artificial intelligence (AI) engine that helps with incident resolution by automating alerts, insights, and root cause analysis. On November 27, The Investment Committee on CNBC debated the latest Calls of the Day. Bofa raised the price target to $175 from $156 on Datadog, Inc. (NASDAQ: DDOG). A software name that has reawakened after being dormant for several years, there is plenty of room for it to accelerate further to the upside. Moreover, the recent pullback gives investors an opportunity to get back in.
5. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in cloud-delivered endpoint and cloud workload protection.
On November 27, KeyBanc maintained its Overweight rating on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and a price target of $395.00. The AI-powered cybersecurity firm reported strong third-quarter results. Its revenue of $1.01 billion rose 29% year over year and surpassed the consensus mark of $982.3 million. The company reported over $600 million in Falcon Flex bookings for the quarter and demonstrated significant growth in its Security Information and Event Management (SIEM) offerings. To conclude, KeyBanc expressed confidence in CrowdStrike’s position as a leading player in streamlining security spending. This is reinforced by field insights that highlight strong customer loyalty to the AI-native Falcon platform.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is an American multinational automotive and clean energy company. It leverages advanced artificial intelligence for autonomous driving, energy optimization, and manufacturing innovations.
On November 28, Tesla Vice President of AI Software Ashok Elluswamy shared an update about Full Self Driving (FSD) v13. Tesla’s Full Self-Driving (FSD) is a semi-autonomous driving feature that adds advanced driver assistance features to Tesla vehicles. Based on the post, it seems like the FSD V13, bringing higher resolution video, bigger AI models, audio intake, and improved smoothness and safety in future updates is going to be a notable improvement over the current version. On November 1st, Elon Musk revealed on X that the Tesla FSD is now “almost entirely AI”.
3. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 107
Micron Technology, Inc. (NASDAQ:MU), a US-based innovative memory and storage solutions provider, supports the development of artificial intelligence and generative AI applications.
On November 28th, Bloomberg reported that the Biden administration is weighing additional curbs on sales of semiconductor equipment and AI memory chips to China. The measures, aiming to curb Beijing’s tech advancements, are less strict than previously discussed. The restrictions could be announced next week, impacting companies in the space such as Micron. Back in 2023, China’s cyberspace regulator said that U.S. memory chipmaker Micron Technology products had failed its network security review and it would bar operators of key infrastructure from buying from the company, a move perceived as a response to US sanctions on China’s semiconductor industry.
2. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Alibaba Group Holding Limited (NYSE:BABA), an online retailer, leverages AI in its e-commerce business. It has recently launched more than a hundred new AI models as part of its AI push.
Alibaba Group Holding Limited (NYSE:BABA) has a workplace collaboration app called DingTalk. On November 29, Alibaba Group Holding Limited (NYSE:BABA) announced that it has launched DingTalk in Hong Kong as a key step in its global expansion strategy. DingTalk will be establishing a new service team in the city to “better respond to customer needs and focus on building a localized ecosystem and service system”. The Alibaba-owned communication application offers several artificial intelligence features such as real-time translation, AI search, virtual assistants, and automated replies to address cross-market and cross-cultural business needs.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that leverages Apple Intelligence, its AI-driven personal system, to augment its devices and services worldwide.
On November 29, Wedbush analyst Daniel Ives maintained a “Buy” rating on Apple Inc. (NASDAQ:AAPL) and set a price target of $300.00. According to the firm, iPhone 16 sales have met or exceeded global expectations. Moreover, the anticipated launch of Apple Intelligence in China and other markets, supported by a soon-to-be-announced Chinese technology partner, will potentially boost Apple’s competitive position. The company plans to release version 18.2 of its software next week, introducing key AI features such as ChatGPT integration. The firm expresses confidence in the company’s trajectory.
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