Technology shares are heading into the second half of the year on a bullish footing, with growing adoption of artificial intelligence expected to drive another leg higher in the sector's rally.
Wedbush predicts a further 10% gain for tech stocks by the end of 2025, with Nvidia Corp (NASDAQ:NVDA, ETR:NVD), Microsoft Corp (NASDAQ:MSFT), Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB), Palantir Technologies Inc (NYSE:PLTR) and Tesla Inc (NASDAQ:TSLA) flagged as top picks.
The investment bank believes markets are still underestimating the scale of AI-driven growth, with enterprise and government spending on the technology set to exceed $2 trillion over the next three years.
"We have barely scratched the surface of this fourth industrial revolution," it said, calling Nvidia and Microsoft the poster children of the AI boom.
Wedbush expects the focus to shift increasingly toward software stocks, as more companies move from testing AI to deploying it at scale.
The launch of large language models and the need to boost productivity are expected to trigger broader adoption in the second half of 2025.
Nvidia, in particular, is seen as the linchpin of the AI buildout. For every $1 spent on its chips, Wedbush estimates there is an $8–$10 multiplier effect across the rest of the tech ecosystem.
It expects Nvidia and Microsoft to reach the $4 trillion market capitalisation mark this summer, with a potential $5 trillion milestone in sight over the next 18 months.
Geopolitical risks, including tariffs, have been less disruptive than feared, and the broker anticipates further trade deals under a second Trump administration. That could help maintain momentum in what Wedbush describes as a "golden age" for technology.