The use of AI is rocketing higher.
As Elon Musk points out, the amount of AI coming online is increasing by a factor of 10 every six months.
That’s enormous.
It’s sent stocks like Nvidia soaring… up over 4,000% in the last five years. And 500,000 people have become AI millionaires.
But Musk is warning President Trump that there AI has a fatal flaw.
He is predicting a major shortage in Trump’s first year that could stop AI growth in its tracks.
If you are invested in AI… or considering it in the future… you need to see Musk’s dark warning right away. Not only could it help you protect yourself… but there is BIG opportunity here as well.
Trump has made it a priority to solve this problem. And a handful of companies are in a position to receive billions of dollars as a result. Now is the time to move on these companies… before the story is widely known.
Get the details on the three companies solving AI’s fatal flaw right here.
– Nicole Labra, Senior Managing Editor
What does 2025 have in store for investors?
It’s the question on every investment strategists mind about this time of year. Any investor who can answer it with certainty could place their bets now and retire on their gains at the end of 2025.
While that’s just a fun fantasy, Wall Street, in fact, does put a massive amount of research into answering that very question.
Around mid-December every year, just about every investment bank looks at a host of factors – from potential changes to regulation and taxes, to the health of consumer and business finances, to what the Federal Reserve is expected to do, among many others – and comes up with a single number: the S&P 500 level at the end of the following year.
Here are a few of the bigger investment banks’ targets for the S&P 500 by the end of 2025 – as well as the percentage gains those targets imply for the index this year. (Note: The S&P 500 ended 2024 at about 5880.)
The average predicted gain for the S&P 500 here is about 14%, which is a few percentage points higher than the average 10% annual gain over the index’s history.
Variable Factors
Of course, those are mere predictions based on a host of highly variable factors. And historically, they’ve been only moderately accurate. Last year, the big banks underestimated the S&P’s gain by about 18% on average (the index rose almost 24% in 2024). Three years ago, they overestimated it by 26% (the index fell 18% in 2022).
So we should take these targets for what they’re worth – merely directional indications of which way the market is expected to go. And for this year, that’s up.
That still may be a tall order considering that the market posted gains of 20% or better in the last two years, the first instance of consecutive 20% plus returns since 1998.
But there are good reasons that strategists expect another good year for the market in 2025.
- Deregulation and tax reform. President-elect Donald Trump campaigned on a very business-friendly policy regime, including deregulation of certain industries, particularly energy and financial services – which should give many companies the ability to achieve higher revenues and earnings. He also promised tax cuts for businesses, which will give them additional funds to expand their operations and add staff, all of which will be good for both the economy and earnings.
- Lower borrowing rates. The Federal Reserve is expected to continue cutting interest rates this year, though gradually. The ability to borrow more cheaply will be welcome by many U.S. companies, particularly small caps and microcaps.
- Higher profitability: Analysts are expecting S&P 500 companies to achieve record profit margins in 2025. This will be driven by tax cuts, artificial intelligence, and other productivity-enhancing technologies. Earnings could grow as much as 15% year over year, which should send share prices higher.
That said, there are a few potential headwinds to the bull market this year. It’s not yet clear what the extent and impact of tariffs the Trump administration is promising will be. The effect could be negative if it drives inflation higher or ignites a global trade war.
And the housing sector remains a problem. Mortgage rates are now at a six-month high, which renders a home purchase impossible for many families and will continue to depress home construction and sales.
Finally, even if the market does achieve double-digit growth this year – and I don’t doubt that it could – there will still be drawdowns. In 2023, when the market rose 26% for the year, there was a 10% correction along the way. Last year, when the market rose almost 24%, there was a 9% drawdown.
Drawdowns or minor corrections are normal even in strong bull markets. Smart investors will see them as buying opportunities.