According to a famous Wall Street brokerage Goldman Sachs, the S&P 500 index will reach 6,500 by the end of 2025. The US economy and corporate earnings are expected to continue growing, a key factor driving the optimism behind this forecast. Another brokerage, Morgan Stanley, has made a similar prediction, stating that US earnings will continue to grow in 2025. This can be expected if the Federal Reserve cuts interest rates next year and there are signs of a stronger business cycle. The ‘Magnificent 7’ stocks, which are key tech giants leading in AI innovation, are likely to outperform the rest of the 493 companies in the benchmark index next year, Goldman notes. The outperformance, however, is only predicted to be by 7 percentage points, the slimmest margin in seven years.
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The Latest Developments in AI
As companies increasingly leverage artificial intelligence to drive growth, the pivotal role that AI technology is playing in influencing market trends becomes increasingly undeniable. In the latest news, AI-powered search engine Perplexity is reportedly taking a jab at some of the tech giants by launching its very own shopping feature that it claims is a “one-stop solution where you can research and purchase products.”
“You can use it to research and make purchases on all things like building your library, buying electronics for throwing a party, and so on,”
-Perplexity said in a thread on X that also included a short video (below) showing the new feature in action.
The shopping tool allows users to enter queries, refine results, and includes features such as one-click checkout. Its major point of differentiation, however, is that it describes its results as “unbiased recommendations” that are powered by AI and based on in-platform reviews.
“When you ask Perplexity a shopping question, you’ll still get the precise, objective answers you expect, plus easy-to-read product cards showing the most relevant items, along with key details presented in a simple, visual format.”
In other news, Coca-Cola is facing backlash with an AI-made advertisement. Originally meant to pay homage to a classic 1995 commercial, many creatives have drawn criticism, stating that it is distasteful for the company to use AI technology to create the video instead of the work of artists. As per Forbes, the video was created by three AI studios, namely Secret Level, Silverside AI, and Wild Card, and used four different generative AI models.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A financial analyst giving a presentation to a group of investors about annuity insurance.
10. Penguin Solutions, Inc. (NASDAQ:PENG)
Market Capitalization: $894.2 million
Penguin Solutions, Inc. (NASDAQ:PENG) is a technology company and a leading AI infrastructure provider for organizations looking to build and operate state-of-the-art generative AI facilities.
On November 18, JMP Securities initiated coverage of Penguin Solutions, Inc. (NASDAQ:PENG) with an “Outperform” rating and a $23 price target. As per the analysts, Penguin Solutions, Inc. (NASDAQ:PENG) is an enterprise artificial intelligence solutions innovator offering hardware, software, and services solutions across a variety of end markets. JPM believes the stock has potential for long-term growth, with several key strengths that will fuel it.
9. Bloom Energy Corporation (NYSE:BE)
Market Capitalization: $5.19 billion
Bloom Energy Corporation (NYSE:BE) designs, manufactures, sells, and installs solid-oxide fuel cell systems for on-site power generation; helping meet the rising energy demands of AI data centers.
On Monday, November 18, Wells Fargo raised the firm’s price target on Bloom Energy Corporation (NYSE:BE) to $22 from $14 and kept an “Equal Weight” rating on the shares. Bloom Energy recently reached an agreement with American Electric Power to power artificial intelligence data centers, supplying up to 1 gigawatt of its products. According to Wells Fargo, the deal is a positive milestone, but the pacing and magnitude of future order growth remain unclear. This is because AEP is not obligated to place additional orders, the analyst notes in a research note. The firm believes a reasonable amount of future orders is now reflected in Bloom’s valuation.