Predicted Tech Shares that Analysts Believe May Surge in 2025
The tech industry is a goldmine for top-performing investment opportunities, as demonstrated by the impressive growth of the Nasdaq Composite index over the past five years. With artificial intelligence (AI) garnering increased attention from Fortune 500 corporations, there's still plenty of room for smart investors to reap significant long-term rewards.
Wall Street analysts have a bullish outlook for tech powerhouses like Advanced Micro Devices (AMD) and Monday.com in 2023.
1. Advanced Micro Devices (AMD)
The rapid advancement of AI software is triggering substantial investments in advanced hardware for data centers. AMD, a trailblazer in CPU and GPU manufacturing, is perfectly positioned to capitalize on this trend.
Graphics processing units (GPUs), crucial for training AI models, have netted AMD substantial revenue gains in the last year. Analysts have a median 12-month price target for AMD shares at $183, representing a 52% increase over its current $120 price point.
AMD's Q3 2023 data center sales soared 122%, reaching $3.5 billion, due in part to strategic partnerships with tech giants like Microsoft and Meta Platforms. AMD management estimates the $500 billion market for AI accelerators could soon become a reality by 2028.
In addition to its AI and data center activities, AMD is also a key provider of central processing units (CPUs) and has been gaining market share at the expense of Intel in recent years. AMD's client segment, which encompasses its PC CPUs, experienced a 29% year-over-year sales surge in Q3 2023.
Market analysts anticipate AMD's total revenue to surge by 27% to $32 billion in 2025, accompanied by a 54% increase in earnings. Investors can acquire shares at a modest forward price-to-earnings ratio of 24, positioning AMD for strong earnings growth and the potential to meet Wall Street's lofty price targets.
2. Monday.com
Monday.com bridges the gap between workflow management and automation, helping businesses optimize operational efficiency. Its cloud-based platform, subscribed to by countless businesses, fosters seamless collaboration among teams and enables project customization.
With an estimated 30% annual sales growth rate, Monday.com is on pace to surpass the $1 billion revenue threshold as we head into 2025. Wall Street analysts have a $319 median price target on Monday.com shares, representing a 35% upside from their current $235 valuation.
Both dominant competitors and new entrants populate the workflow management software market; however, Monday.com continues to thrive, thanks to its robust growth and ability to innovate. Operating at a price-to-sales multiple of 13, Monday.com's stock price has climbed 25% in the last 12 months. To achieve an additional 35% growth by meeting Wall Street's forecasted 12-month price target, the company needs to either surpass revenue estimates in 2025 or raise its valuation multiples.
In summary, AMD is poised to capitalize on the AI and data center market with its Instinct GPUs and EPYC server CPUs, while Monday.com's cloud-based workflow management solutions and disruptive AI-powered capabilities continue to propel its growth trajectory.
- In the context of finance and investing, the average profit margins for tech stocks in the Nasdaq Composite index have been quite impressive, contributing to the attractiveness of this sector for long-term investments.
- Given the promising prospects of these top-performing tech companies like AMD and Monday.com, many investors are adopting a diversified approach to their portfolio, allocating a portion of their funds towards these stocks to potentially increase their overall returns.
