Last year was a very good year to invest in stocks. The S&P 500 returned more than 20% for the second year in a row, with major stock indexes consistently setting new all-time highs in the process.
It was an even better year for those lucky or smart enough to have invested in tech stocks. Growth stocks outperformed value stocks, and technology stocks were among the best performers, largely because enthusiasm for artificial intelligence (ai) dominated the headlines.
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For example, among the companies in the Russell 1000 index that generated returns of 100% or more last year (note: there were 23), 8 are related to ai, including Palantir Technologies. (PLT) Vistra Corp. (VRT) Nvidia Corp. (NVDA) Vertiv Holdings and Axon Enterprises (AXON) .
tech's winning ways may not be over yet, as many expect artificial intelligence to remain a big focus in 2025. However, the individual stocks generating the biggest returns could be slightly different.
While spending on ai infrastructure will remain high, we will also start to hear a lot more about agent ai, which many believe will be the next big trend in ai.
Why is there so much enthusiasm for ai?
According to a recent research report from Goldman Sachs, ai could boost global growth by 7% over the next decade, increase S&P 500 corporate profit margins by 4%, and increase labor productivity growth in the United States. by just under 1½ percent annually over a 10-year period. period of the year.
No wonder ai has captured the zeitgeist.
On January 21, OpenAI CEO Sam Altman added to the excitement when he went to the White House alongside SoftBank CEO Masayoshi Son and Oracle President and CTO Larry Ellison to announce a important new agreement on ai.
Related: Sam Altman's Net Worth: OpenAI Founder Now a Billionaire
Together, the three billionaires pledged to spend up to $500 billion building artificial intelligence infrastructure in the United States, one of several high-profile announcements made during the new Trump administration. So far, US technology partners mentioned in the deal include Nvidia, Oracle, Microsoft and Arm Holdings. (ARM) .
According to information from various sources, the joint venture would be called Stargate and will begin with a data center in Texas.
President Trump said he would create more than 100,000 American jobs almost immediately. So far, 10 data centers are being built in the United States and 20 more are planned.
Real estate company CBRE recently stated: “The rapid growth of digital services, cloud computing, artificial intelligence (ai) and 5G is driving a persistent increase in demand for data center capacity.”
They added: “Despite record construction activity, the data center market will struggle to keep pace with demand, leading to higher utilization rates at existing facilities and tighter vacancy rates. The vacancy rate average for primary markets fell to a record low of 2.8% and the average pre-leasing rate for new construction hit a record high in 2024.”
According to a recent Blackstone report, “artificial intelligence is powered by data, and in recent years, total data generation has doubled every three years. Between 2010 and 2025, the amount of data created, consumed, and stored will increase by more than 100 times. All this data needs a place to live, which in turn has unleashed a huge need for data centers.
And it's not just ai: social media, cloud migration, content creation and streaming media are all helping to generate more data. Meeting this demand and fully realizing the ai opportunity will require an estimated investment of $2 trillion in global digital infrastructure by 2030.”
So, briefly, what is ai?
According to Chat GPT 4.0:
“ai focuses on reasoning, problem solving, perception, language understanding and decision making. ai can be classified into two main types:
1. Narrow ai (weak ai): It is designed to perform a specific task, such as voice assistants, recommendation systems, or image recognition. It is highly specialized and does not have general intelligence.
2. General ai (Strong ai): This is a more advanced form of ai that would be able to understand, learn and perform any intellectual task that a human can perform. “General ai is still a theoretical concept and has not yet been realized.”
Moving on…what is agent ai?
A new, more advanced area of ai is starting to emerge, called Agent ai.
Chat GPT describes Agentic ai as “artificial intelligence systems that can autonomously make decisions and actions based on their programming or learned experiences, with the ability to achieve specific goals or perform tasks in dynamic environments.
Related: An ai Stock Has Become Analysts' Top Pick for 2025
Some literature refers to these decision makers as “Agents.” Unlike traditional ai, which may require continuous human supervision or intervention, Agentic ai operates independently to achieve its goals.”
In other words, compared to previous technology, agent ai models represent a more sophisticated evolution that incorporates advanced reasoning capabilities, autonomous decision-making, and complex problem-solving.
These agents can be used as tools, for example, to help software engineers code faster. Or they can replace certain job functions, such as online customer service.
Who could be the big winners in agent ai in 2025?
Merrill Lynch recently published a research report on agent ai called “The New Wave: Agent ai.”
Here are some of the highlights from the report:
- New and disruptive ai capabilities are rapidly emerging.
- Agent ai and autonomous agents taking action usher in the third wave of ai (the first wave was pre-GenAI from 1940 to November 2022, and the second was GenAI from November 2022 to October 2024).
- ai capabilities seem to be emerging weekly, if not daily.
- ai capabilities are advancing so rapidly that ai agents (think Agentic ai) can complete end-to-end software engineering tasks, answer customer service calls, or book your next vacation.
- We are approaching an accelerated super cycle of innovation, in which increasingly powerful models produce increasingly powerful applications, which in turn drive additional model advancements and application capabilities.
According to a recent Wall Street Journal interview, companies such as Johnson & Johnson, Moody's, and eBay are in various stages of testing and implementing Agentic ai.
Looking ahead, many tech-related names are involved in developing, enabling and helping develop agent ai. There are many others, but this is a small list of names investors might want to watch in 2025:
No. 1: Semiconductor companies Nvidia, Marvell technology (MRVL) Credo technology Group (CRDO,) and Monolithic Power Systems Inc. (MPWR) .
Related: The Analyst Who Bet Right on 2024 Reveals Top ai Stock Picks for 2025
These companies provide computing processing power, high-speed connectivity solutions, and power solutions for data infrastructure.
No. 2: The diversified technology company Google (GOOGLE) .
Google offers a wide range of services, including cloud computing, online advertising, online search, email, and hardware. The company has incorporated ai into several of its services, including search, maps, ads, and more.
No. 3: Microsoft software companies (MSFT) oracle (ORCL) IBM IBM, Service Now (NOW) and Salesforce Inc. (CRM) .
Related: Analyst Reviews IBM Stock Price Target Ahead of Earnings and Investor Day
All of these large global technology software companies are involved in developing ai technology or providing end-user applications that use ai.
No. 4: Internet retailer amazon (AMZN) .
amazon is a global retail and technology company that sells products online, offers cloud computing services, and provides digital streaming and artificial intelligence services.
No. 5: Global IT services firm Accenture. Accenture is a global technology services company that provides consulting and outsourcing services and helps businesses in advanced areas including artificial intelligence, analytics and automation.
No. 6: The computer networking company Arista Networks (Aneta) .
Arista is an industry leader focused on networking, data centers and routing.
This ai industry is evolving and advancing rapidly as billions of dollars pour into the sector. 2025 is likely to follow in the footsteps of 2024 and bring a lot of interesting news, new developments and breakthroughs for various technology-related companies.
Related: Veteran Fund Manager Issues Dire S&P 500 Warning for 2025
