Market Trends Point to a Strong 2025 for Tech Stocks
Historical data suggests that the Nasdaq and other benchmark indexes tend to rise in the months following a presidential election. This trend has held true in 2024, with the tech-heavy index surging around 10% since the election. As political uncertainty subsides, investors are becoming more confident in holding assets, driving market growth.
A New Era of Growth for AI Tech
The AI revolution is gaining momentum, and Wall Street is pouring money into this emerging technology. Two stocks, Advanced Micro Devices (NASDAQ: AMD) and a diversified tech giant, are poised to ride this wave into another year of stellar growth.
AMD: A Chipmaker with a Diversified Business Model
Despite being a major player in the hardware side of AI, AMD’s shares have fallen 13% this year. However, its diversified business model, which includes a strong data center segment, makes it an attractive alternative to Nvidia. With a reasonable valuation and a forward price-to-earnings (P/E) multiple of 25, AMD is a compelling investment opportunity.
Data Center Growth Drives AMD’s Success
AMD’s third-quarter revenue grew 17% year over year to $6.8 billion, driven by the spectacular performance of its data center segment, which soared 122% to $3.5 billion. The company plans to release new, advanced chips to compete with Nvidia, further driving data center growth.
A Diversified Tech Giant with a Strong AI Footprint
The other stock, a diversified tech giant, has a strong presence in e-commerce, cloud computing, and AI infrastructure. Under the leadership of CEO Andy Jassy, the company has shifted its focus from growth-at-all-costs to sustainable profitability. This strategic pivot has led to impressive operational results, with Q3 earnings increasing by 11% year over year to $158.9 billion.
AWS: The Cornerstone of Profitability
The cloud-computing segment, Amazon Web Services (AWS), is the backbone of the company’s bottom line, representing $10.4 billion in operating income. AWS provides exposure to the picks-and-shovels side of the AI opportunity, allowing the company to “rent out” Nvidia GPU computing power to AI start-ups.
A Safer Bet in a Speculative Industry
While the generative AI industry has created immense wealth, it remains highly speculative. Companies like AMD and the diversified tech giant offer a safer investment opportunity, providing exposure to the AI revolution while maintaining diversified business models.
Expert Insights for Long-Term Growth
Our analyst team has identified these two stocks as ideal for long-term growth. With a proven track record of outperforming the market, their recommendations are worth considering.
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