2025 Trend Watch: Where Markets Are Heading Next!

Welcome back to our latest edition of Market Insights with Sanjeev Kaushik.

In this edition, we explore the buzz surrounding the markets as we step into 2025.

While some key themes from previous years are set to persist, others may shift or pave the way for fresh trends.

Here’s a deep dive into five compelling industries to watch closely in the year ahead.

1. Top 5 Market Trends to Watch in 2025

As we step into the new year, the markets are buzzing with anticipation for what 2025 will bring.

While some of the major themes from previous years are poised to continue, others may evolve or give way to new trends. Here's a deep dive into five compelling themes to keep an eye on in the year ahead.

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1.1 AI: The Evolution Continues

Artificial Intelligence (AI) remains the centerpiece of market conversations, with its influence only growing stronger. In 2025, we expect to see a shift from the infrastructure phase to the platforms and applications phase of AI investment. This evolution could redefine enterprise tech spending, balancing day-to-day software applications with advanced AI solutions.

Companies to Watch:

1. NVIDIA (NVDA): Continues to lead in AI chip technology.
2. Snowflake (SNOW): Driving data management for AI platforms.
3. Teradyne (TER): Supporting AI in automated testing.
4. Sempra Energy (SRE): Powering AI data centers.

AI’s potential for exponential growth could sustain market indices. Watch for advancements in generative AI and machine learning applications that enhance efficiency and innovation.

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1.2 De-regulation, M&A and Capital Markets

A shift in the political landscape could create a favorable environment for mergers and acquisitions (M&A) and capital market activities. The financial sector, in particular, stands to benefit from reduced regulatory hurdles under a second Trump Administration.

Companies to Watch:

1. Citigroup (C): Poised to capitalize on M&A activity.
2. Evercore (EVR): A leading M&A advisory firm.
3. Vulcan Materials (VMC): Positioned for infrastructure-driven growth.
4. S&P Global (SPGI): Essential for capital market analytics.

Stay alert for sector-specific M&A opportunities and monitor the regulatory landscape for signals of increased activity.

1.3 Re-powering America

America’s energy infrastructure is undergoing a transformation to meet growing demands from AI-driven data centers, electrified transportation, and the manufacturing renaissance. This "re-powering" effort is driving significant investment in utility capital expenditures (CapEx).

Companies to Watch:

1. Sempra Energy (SRE): Leading efforts in sustainable energy solutions.
2. Vulcan Materials (VMC): Benefiting from infrastructure projects.

The intersection of sustainability and technology creates long-term opportunities. Look for investments in energy infrastructure and companies supporting the clean energy transition.

1.4 Deglobalization: Reshaping Supply Chains

The trend toward deglobalization, i.e the process of reducing the interconnectedness between countries, particularly in terms of trade and economic relations, is accelerating.

The United States, in particular, is expected to impose higher tariffs on imports, creating challenges and opportunities.

Companies to Watch:

1. Vulcan Materials (VMC): Benefiting from domestic infrastructure demand.
2. Woodward (WWD): Supporting localized manufacturing efforts.
3. Meritage Homes (MTH): Positioned for growth in domestic construction.

Deglobalization could lead to sector-specific winners and losers. Focus on companies with robust domestic operations and those adapting to evolving trade policies.

1.5 A Resilient US Consumer

Despite ongoing challenges, the US consumer remains a cornerstone of economic growth. Analysts predict another year of resilience, fueled by rising discretionary cash flow and higher savings rates.

Companies to Watch:

1. Burlington Stores (BURL): Thriving in the retail sector.
2. Norwegian Cruise Line (NCLH): Benefiting from the travel boom.
3. Uber (UBER): Capitalizing on consumer mobility.
4. BRX Properties (BRX): Gaining from retail property demand.
5. Conagra Brands (CAG): Leveraging innovative consumer products.
6. Meritage Homes (MTH): Strong position in residential housing.
7. Pinterest (PINS): Engaging consumers through digital platforms.

The US consumer’s resilience offers a stable foundation for market growth. Look for innovators and market share leaders in discretionary spending categories.