AI momentum could drive more gains for tech in second half: Wall Street
'We believe tech stocks will have a very strong second half of the year,' Wedbush analysts wrote, pointing to the ongoing 'AI Revolution tailwinds now accelerating across semis, software, and the enterprise and consumer landscape.'
With $2 trillion in expected AI-related spending over the next three years, Wedbush sees tech positioned for another '10%+ move higher' led by major players like Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), Palantir (NASDAQ:PLTR), and Amazon (NASDAQ:AMZN).
Wedbush added that software is set to join chips as a major AI beneficiary, noting that 'true adoption has begun by going from idea to scale,' with the 'enterprise consumption phase' ahead in 2H25.
Despite tariff headwinds, Wedbush believes the Trump administration will likely 'soften its stance' and pursue trade deals that keep the AI investment landscape intact.
Wolfe Research echoed that view, highlighting a resurgence in demand for secular growth. 'Our sense is the fall in long-term interest rates, lingering economic growth concerns and a revitalization of the AI Spending Narrative has pushed investors back into owning secular growth,' Wolfe analysts said.
They noted strong year-to-date gains in Communication Services and Industrials and expect the trend favoring the Nasdaq 100 to persist 'unless payrolls is a shocker on Thursday.'
Together, the two firms suggest AI demand and easing macro risks could fuel further tech sector outperformance in the coming months.
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