The Trump trade agenda just triggered the biggest stock market rally since 2008. But is this the beginning of a bull run—or just the eye of the storm?
With Donald J. Trump now officially the 47th President of the United States and backed by a Republican-controlled House and Senate, investors are staring down a market unlike any in modern memory. The post-election rally that erupted in late 2024 has morphed into something far more volatile and uncertain.
On April 9, the S&P 500 soared 9.5%—its best day in nearly two decades—but only after Trump paused large portions of his sweeping global tariff plan. Trump’s tariffs sparked a bruising stretch of steep losses, fueled by the administration’s aggressive trade blitz and internal friction between Trump loyalists and key voices like Elon Musk, now heading the Department of Government Efficiency.
But the markets pulled a fast one the very next day.
After the largest single-day gain in years, stocks snapped back violently. The S&P 500 is down more than 5%, the Nasdaq’s bleeding, and the Russell 2000 is leading the dive.
What happened?
The math caught up.
The big headline—a 90-day pause on country-specific tariffs—looked like a major shift. From confrontation to conversation. Markets cheered.
But the numbers tell a different story:
- U.S. average tariff rate before the pause: 26.85%
- After the pause: 26.25%
- Net drop: Just 0.6%
That’s not a pivot. That’s a rounding error.
Why so little change?
Because the two biggest factors—China and steel/aluminum—weren’t touched. China’s tariff rate jumped to 145%, and metals still face 25% duties. These account for huge trade volumes, so leaving them out neutered the entire move.
Wall Street noticed.
And that’s why we’re red today.
And the broader economic implications?
According to Fed modeling, each 1-point increase in the average U.S. tariff rate = ~0.14% drag on GDP.
In 2024, the average tariff rate was just 2.5%. Even with the pause, the increase is still over 23 percentage points, translating to a ~3.3% GDP hit.
So, Wall Street took a closer look… and realized not much had really changed.
But… What if the signal matters more than the substance?
Yes, the tariff pause did next to nothing mathematically. But markets aren’t reacting to math—they’re reacting to fear.
- Stocks are down 20% to 30% on what could happen, not on what already has.
- The tariffs haven’t even hit the real economy yet.
- Investors want assurance. Not perfection.
And the pause on tariffs? That was the first real assurance we’ve seen in a long time.
The White House changed its tone.
In the last 24 hours (as of this writing):
- Officials confirmed talks with 70+ countries
- 20 nations submitted trade deal proposals
- 2 deals are reportedly near the finish line
- Trump praised the EU and China, calling President Xi a “very smart man”
That’s not just diplomatic fluff. That’s a message.
It means this administration is finally blinking.
That’s a big signal. It tells us that this administration is taking diplomacy seriously.
The pause wasn’t just a headline—it was the beginning of a broader pivot toward de-escalation.
Sure, the average U.S. tariff rate may not have changed yet, but it likely will drop a bunch over the next 2–3 months
This is what matters. The direction of travel has changed.
And markets notice. They always do.
Meanwhile, the U.S.-China dynamic also seems to be moving toward resolution—albeit more slowly.
Yes, the China situation remains tense. But China didn’t match the U.S. hike. Instead, they raised tariffs to 84%—far below the U.S. rate.
That’s not retaliation. That’s restraint.
Trump echoed the change: “China wants to make a deal.”
And then, he doubled down on those comments and even called President Xi of China a “very smart” man.
This mutual de-escalation is key. Translation? Both sides want to stop the bleeding.
We’re not calling a deal imminent. But we are saying that the worst-case scenario is fading fast.
And that’s where the real opportunity lies.
So where does all this leave us? Medium- to long-term, we’re staying very bullish.
We have high confidence in the following:
- Multiple trade deals will be signed in the next 90 days
- The average U.S. tariff rate will fall to ~10%
- The GDP hit will shrink from ~3.3% to ~1%
- That smaller drag can be offset by tax cuts or deregulation
- Risk sentiment will recover
- AI stocks will be meaningfully higher in 6–12 months
Bottom line? We’re still bullish—especially over the next 6 to 12 months. That said, the short term could stay ugly.
April 9: +9% rally.
April 10: -4% drop.
Since 1950, when the S&P 500 pulls this two-step, the next five days are always red.
But one year later? The S&P is always higher:
So yes, short-term pain is likely. But it’s also likely that this is the opportunity before the recovery.
Our strategy amidst this backdrop is to keep strategically nibbling.
But it’s important to note that the markets are in headline ping-pong mode, and there’s no clear catalyst over the next few days to decisively move markets higher.
Instead of jumping on stocks, wait for the next real upside catalyst. We think it could come from:
- More trade deal announcements (likely staggered over the next few weeks)
- The Fed’s May meeting
Speaking of the Fed…
The recent CPI inflation report gave us some fantastic news:
- Headline CPI: -0.1% MoM (vs. +0.1% expected)
- Core CPI: +0.1% MoM (vs. +0.3% expected)
- YoY inflation dropped to 2.4% (headline) and 2.8% (core)—lowest levels since early 2021
That’s major.
It means:
- Inflation is under control
- The Fed has cover to cut rates soon
- Liquidity support is coming
We don’t expect a rate cut in May—but we do expect the Fed to guide toward a June cut.
And that is another reason for medium/long-term optimism: The “puts” are back.
Trump, in recent remarks, admitted that the market selloff influenced his decision to pause tariffs
Translation: he cares again.
And with inflation fading, the Fed is soon to follow. The “Fed put” is coming back, too.
With the Trump and Fed puts coming back, stocks should get back into an uptrend.
Which Sectors Could Thrive—or Dive—Under Trump 2.0?
To answer this question, we analyzed the latest data, parsed White House signals, and reviewed historical patterns from similar periods of economic turbulence.
Despite the noise, our team sees a familiar setup—one that mirrors previous market bottoms like 2008 and 2020. Yes, the short-term remains volatile. But zoom out, and a generational opportunity could be forming for high-conviction investors.
Our perspective:
- Short-term: Headline-driven ping-pong behavior. Expect more whiplash.
- Right now: No clear catalyst. They’re watching for a Fed rate cut or formal trade deals.
- Medium-term: Tone shift from confrontation to negotiation. That’s bullish.
- Long-term: If policy clarity emerges, tech and AI stocks could lead the next leg up.
Despite the drama in Washington, the AI megatrend hasn’t slowed. In fact, it’s accelerating. That’s why we’re doubling down on our top seven AI stock picks for this administration.
One of the clearest signals from the new administration: Biden’s 2023 executive order on AI risk is on the chopping block. That order created the U.S. AI Safety Institute (AISI) and required transparency from AI companies around model training and security. Critics claimed it would stifle innovation.
Now, the AISI faces shutdown, and if it goes, federal oversight of AI could splinter into a patchwork of state-level laws. States like California, Tennessee, and Colorado already have AI rules on the books. But the real wildcard is what happens if Washington walks away entirely.
The likely outcome? A hypercharged race for AI innovation, driven by less regulation and more political backing for tech.
That said, Trump’s 10% blanket tariff on all imports, plus a 100%-plus tariff on Chinese goods, could slow down AI hardware development—especially the supply of GPUs essential for training large AI models.
Semiconductors are ground zero. If Republicans follow through on efforts to repeal or gut the CHIPS and Science Act, domestic chip production could stall. That would put further pressure on companies already facing hardware shortages and talent bottlenecks due to H-1B visa restrictions.
So yes, deregulation might accelerate AI—but logistics, hardware, and immigration limits could become chokepoints.
Yet, even amid tariff shocks and regulatory whiplash, Big Tech is crushing it with AI.
Just take a look at these developments:
Amazon (AMZN)
- 12th-gen fulfillment robots have cut processing time by 25%.
- GenAI tools are fueling 20%+ ad revenue growth.
- AWS AI is scaling faster than AWS did during its early years.
Result: Operating profits are up 55% year-over-year, and the stock is up roughly 50%.
Alphabet (GOOGL)
- Gemini is gaining traction across Google services.
- AI Overviews are increasing search usage.
- Margins are expanding as AI boosts efficiency.
Microsoft (MSFT)
- Copilot is already adopted by 70% of the Fortune 500.
- Its new Fabric platform is becoming a cornerstone for enterprise AI.
- Azure AI demand is driving strong cloud revenue growth.
Meta (META)
- Meta AI assistant already has 500 million monthly users.
- AI-driven content recommendations are increasing user time spent.
- Margins are up thanks to AI-powered operational improvements.
Across the board, these companies are using AI to launch new products, streamline operations, and unlock explosive profit growth.
If federal guardrails fall, AI innovation could hit another gear. Imagine Amazon scaling fulfillment even faster, or Meta’s assistant going multimodal. Without Washington slowing things down, the next generation of AI breakthroughs could arrive far sooner than expected.
That’s why we’re zeroed in on the seven best AI stocks to buy for 2025.
These aren’t speculative moonshots. These are high-conviction companies with the potential to 10X, each dominating a unique slice of the AI economy—cloud, chips, robotics, media, and more.
Let’s take a look…
The Top AI Stocks to Buy for 2025 #1:
Palantir (PLTR)
Forget money. In the business world, data is king.
It can help businesses create better products, enhance marketing campaigns, reach targeted customers, and glean sentiment.
Data can assist with mitigating risk, predicting business outcomes, optimizing supply chains, streamlining functions, and automating various processes.
For a business, data can do everything.
It should be no surprise, then, that data-driven companies are 23 times more likely to outperform in customer acquisition, 19 times more likely to stay profitable, and roughly seven times more likely to keep their customers. Further, a 2021 Gartner survey found that in 75% of large organizations, the office of chief data officer is seen as a mission-critical function, on par with IT, business operations, HR, and finance.
Welcome, friends, to the Intelligence Economy — a new era where enterprises are unlocking the power of big data to drive better business outcomes through AI.
And in today’s world, it’s dog eat dog — if you don’t adopt data-driven decision-making, you’ll be driven out of business by someone who does.
To that end, the Intelligence Economy boom has only one ending — where, by 2030, every business in the world is data-driven.
And yet, a 2019 New Vantage survey found that only 31% of companies have pivoted to data-driven decision-making.
This delta between the current state of the enterprise market (less than one-third adoption of Big Data software) and its future state (100% adoption) implies enormous growth potential for the Intelligence Economy over the next decade.
More specifically, it means that the companies at the epicenter of intelligence — the AI firms creating analytics software — are poised for significant revenue growth in the 2020s.
The time to invest in these often still-small AI/Big Data stocks is now because they won’t be small for long.
One such company is Palantir (PLTR): a revolutionary data science firm that is pioneering an AI-powered approach to data analytics, which the company hopes will one day be standardized across the industry.
Palantir got its start in 2003 to develop advanced software for the U.S. intelligence community’s counterterrorism investigations and operations. The technology the company has built to that is world-class.
Since 2003, Palantir has grown this government-focused data science platform by leaps and bounds. Today, Palantir’s platform is considered the “gold standard” in government data analytics and has been used to power emergency noncombatant evacuation operations from Afghanistan; power the U.S. vaccines program; help identify a $200 billion Russian money-laundering operation; and fuel the Public Safety Power Shutoff program to mitigate wildfire risks.
Now Palantir is further commercializing that technology by expanding into Corporate America. Thus far, those expansions have been wildly successful. Commercial revenues have been growing in excess of 15% for the past several years.
The Denver-based company plans to continue to rapidly scale its government and commercial businesses via new customers, new product launches, and higher fees. Behind that growth engine, Palantir’s management team expects to grow commercial revenues in excess of 3,015% per year over the next few years.
Our bull thesis on Palantir in the Age of AI boils down to three simple things:
- Data is the most valuable asset in the world.
- AI applied to data will unlock huge economic advantages for governments and companies.
- Palantir is the best in the world at applying AI to data.
We believe Palantir is still in the early stages of discovering its true value proposition, much like Microsoft in the 1980s and ’90s.
In the early days of Microsoft Office, folks thought that programs like Word and Excel would be niche office productivity tools. A few decades later, they are in near-constant use, installed on basically every computer in the world.
Similarly, in the early days of Palantir, a lot of people thought of Palantir’s data science platform as a niche productivity tool. But we think that in 10 to 20 years, simplified versions of Palantir’s software could be installed on every computer, putting AI in the hands of every consumer in the world.
Palantir’s launched its Artificial Intelligence Platform — or AIP — in the second quarter of 2023, and already it is setting the gold standard for enterprise AI adoption.
In Q4 2022, Q1 2023, and Q2 2023 — the three quarters before the launch of AIP — Palantir was growing its commercial sales by 10% to 15% every quarter.
In the quarter after the launch of AIP — the third quarter of 2023 — Palantir’s commercial sales growth rate jumped up to 23%.
The following quarter — the fourth quarter of 2023 — it surged to 32%. Ever since, it has remained above 25%.
In other words, the launch of AIP has turned Palantir’s commercial business from a 10% to 15% grower to a >25% grower.
We think this elevated growth trajectory has staying power for the following reasons:
- AIP is a fantastic product.
- AIP is still in the early stages of adoption.
- And companies are more aggressively and urgently looking to invest in enterprise AI software.
We therefore think that Palantir’s commercial business will continue to grow at a robust pace for the foreseeable future, powered by AIP expansion.
Meanwhile, the government business is accelerating, too, from ~10% sales growth a few quarters ago to >20% sales growth last quarter.
For similar reasons as the commercial business, we think Palantir’s government business will stay red-hot, too, as governments upgrade their information technology infrastructure to the AI era. As such, government interest in AI has grown significantly, with a recent analysis showing a 1,200% increase in AI-related government contracts.
For example, Anthropic has announced a partnership with Palantir and Amazon Web Services to provide U.S. intelligence and defense agencies access to its Claude AI models. This collaboration aims to integrate Claude into Palantir’s platform using AWS hosting, making it available in Palantir’s defense-accredited environment at Impact Level 6 (IL6).
The move is part of a growing trend of AI companies seeking deals with U.S. defense customers, with Meta and OpenAIalso pursuing similar relationships. Anthropic’s head of sales, Kate Earle Jensen, emphasized the potential for Claude to enhance analytical capabilities and operational efficiencies in vital government operations.
The partnership will allow U.S. defense and intelligence organizations to use Claude within Palantir on AWS, enabling them to process and analyze vast amounts of complex data rapidly. This is expected to improve intelligence analysis, decision-making processes, and operational efficiency across departments.
Putting it all together, Palantir seems well positioned for several years of >20% sales growth ahead. The company is also driving all this growth without incurring much additional cost. The products are so good that they appear to be selling themselves. As a result, operating margins have soared from <20% in Q3 2022 to nearly 40% today. We see this margin expansion continuing, too, meaning >20% sales growth could translate into >30% profit growth.
That impressive profit growth trajectory should be enough to keep PLTR stock on a winning path for the foreseeable future.
Palantir is unequivocally one of the top AI stocks to buy for the next several years.
The Top AI Stocks to Buy for 2025 #2:
Tesla (TSLA)
As we mentioned earlier in this report, Elon Musk stands to benefit from a successful election push with U.S. President Donald Trump, who appointed Musk to a newly-established government efficiency commission (aptly dubbed “DOGE” for Department of Government Efficiency to slash federal spending. Such a position could provide Musk with enormous influence, especially as it relates to regulations impeding Tesla’s Full-Self-Driving (FSD) progress.
Unless you’ve been living under a rock, you’ve probably heard about Tesla’s (TSLA) Robotaxi.
We got the full scoop from Elon Musk at his Robotaxi event in October, where he unveiled Cybercab (2-seater) and Robovan (20-seater), both without steering wheels or pedals, resembling Cybertruck design.
While details were scarce, the Cybercab is expected to launch before 2027, priced below $30,000. No date was given for Elon’s Robovan, but both appear to be camera-based.
Broadly, Elon expects unsupervised FSD in Texas and California by 2025 for current Tesla cars, pending regulatory approval. But since Musk broadly believes regulations are an impediment to innovation, he could, with his newfound political influence, remove those regulatory hurdles to expedite his goals.
In fact, it’s highly likely Musk will pursue the removal of certain regulations, as several of his businesses — including SpaceX and Neuralink — depend on favorable government regulations, subsidies, and policy.
The centi-billionaire tech magnate’s pro-innovation/anti-regulation philosophy could be a driving force in the Trump administration, allowing Musk to bend AI and FSD environments to his will.
Collectively, Musk’s businesses and products form the foundation for a potentially large business at Tesla around AI. They are unequivocally the future.
And arguably his two most important businesses — xAI and Tesla — are backed by some of the world’s most advanced supercomputers — Colossus and Dojo.
Behind Musk’s xAI venture is the powerful supercomputer Colossus, based in Memphis, Tennessee. Built in just four months, Colossus uses 100,000 Nvidia H100 GPUs, making it the fastest AI training system in the world. This $3 billion investment aims to accelerate AI development, particularly for xAI’s chatbot Grok. Colossus sets a new standard for AI infrastructure, even outperforming other Big Tech giants like Meta, Microsoft, and OpenAI. The system’s vast computational power is expected to enhance Grok’s capabilities and unlock new AI possibilities.
Tesla has been leading AI development in the automotive industry with its FSD technology. While Tesla has its own supercomputer for training FSD systems, Colossus could be used to improve Tesla’s AI projects.
Looking forward, xAI plans to expand Colossus’s capacity, potentially doubling it to 200,000 GPUs in the coming months. This expansion reflects Musk’s ambition to lead the AI revolution.
The supercomputer’s immense processing power and potential for collaboration across Musk’s companies position him at the forefront of AI development, potentially revolutionizing various industries from automotive to space exploration.
Then there’s Tesla’s own supercomputer: Dojo.
If Dojo is the “real deal” – and I think it is – then this could become the leader of the “Artificial Intelligence Boom.”
Wall Street’s AI Boom began in late 2022 with ChatGPT’s launch. Since then, Nvidia has been the poster child for AI stocks. That’s all thanks to burgeoning demand for the firm’s next-generation GPUs, which are used to make and run robust AI models. NVDA stock has surged ~200% higher in the past year alone.
But there is growing concern among some in the industry that demand for Nvidia GPUs is maxing out – and that the big players in the AI Race will start using different GPUs.
Insert Dojo.
Previously, Tesla powered its self-driving operations with a large Nvidia GPU-based supercomputer. But now, Dojo isTesla’s AI-powered supercomputer.
Being the “brain” behind Tesla’s self-driving operations, Dojo parses an incredible amount of driving data to help develop Tesla’s self-driving algorithms.
In other words, Tesla previously used Nvidia GPUs. But now, the EV firm has developed its own supercomputer that uses its own GPUs custom-built for its AI needs.
And it could very well do the same for Colossus.
In the early innings of the AI boom, Nvidia won big by supplying very advanced but very general-use GPUs to companies looking to develop broad AI models.
But as the AI race has matured, those companies are now looking to develop more sophisticated and specialized AI models. For that, they need custom-built GPUs. And economically speaking, it doesn’t make sense for Nvidia to create custom-built GPUs for every single one of its customers.
So, Nvidia’s largest customers are developing their own custom-built GPUs to meet their own specialized AI needs.
Tesla and its Dojo supercomputer are just one example.
The Top AI Stocks to Buy in 2025 #3:
Symbotic (SYM)
Symbotic (SYM) is an AI-powered supply chain logistics company. It got started in 2006 with the purpose of developing next-generation technologies to improve operating efficiencies in modern warehouses.
Over the past 16 years, the company has worked tirelessly to perfect a full suite of AI and robotics technologies to fully automate any warehouse. Today, the company has realized that vision via a single autonomous warehouse system architecture that combines both software and hardware to automate basically every function of a warehouse.
To our knowledge, Symbotic is the only firm in the world that has created a fully autonomous, end-to-end warehouse system architecture that is in operation today.
The science and engineering behind the system is highly complex, but the process is very easy to understand.
Essentially, several robotic arms take inbound pallets at a distribution center and deconstruct them into individual items. Those items are placed on various mobile robots – called SymBots – which drive them to a temporary storage location at the distribution center. Subsequently, when those items are ready to be shipped to a store, the SymBots fetch and deliver them to another set of robotic arms, which construct a new outbound pallet to be delivered to the store.
The whole system is run by an AI software “brain” that informs where packages are stored, when they are fetched, and how pallets are constructed and deconstructed.
It is a single, highly complex solution for order fulfillment.
This system can be outfitted for distribution centers of any size. Typically, a Symbotic system has 400 intelligent robotsand around five to 10 inbound and outbound cells. The whole system is powered by proprietary AI software and is protected by over 400 patents.
The technology is cool. Better than that, it works.
Two summers ago, Walmart (WMT) signed a deal to automate some of its distribution centers with Symbotic technology. Since then, a few of those distribution centers have been retrofitted with Symbotic tech, and they’ve achieved industry-best stock-keeping unit (SKU) counts.
In fact, Walmart was so impressed with the early results of Symbotic’s tech that, just last summer, it dramatically expanded the scope of the initial partnership to include all 42 of its regional distribution centers in America. In other words, every one of Walmart’s regional distribution centers in America will be automated by Symbotic tech by 2027.
Of course, that represents a huge vote of confidence in Symbotic tech. It also represents a massive ~$10 billion revenue contract for the Boston area-based company.
But Walmart is just the tip of the iceberg here.
C&S Wholesale Grocers – the largest U.S. wholesale grocery distributor – is also a big adopter of Symbotic tech and will likely make it a ubiquity by the late 2020s, too. Albertsons (ACI) – the world’s third-largest supermarket chain by revenue – has already integrated Symbotic tech into two of its distribution centers, with more orders on the way. And the distribution centers already live with Symbotic tech are reporting industry-best throughput.
Altogether, Symbotic has a massive order backlog that measures over $23 billion today, and it seems to be growing rapidly every single quarter.
But even that is still just the tip of the iceberg.
There are thousands of warehouses and distribution centers all over North America and Europe that could benefit from using Symbotic’s tech. After all, the estimated lifetime savings of this tech measures $250 million per module.
These cost savings are ubiquitously attractive to warehouse operators. Who doesn’t want to save $250 million per warehouse?
Meanwhile, Symbotic is the only company today with a proven technology platform that can verifiably drive those enormous cost savings. Plus, the company’s existing partnerships with Walmart, Albertsons, and C&S Wholesale Grocers give it ample runway to extend its market leadership in the coming years.
To that end, we believe it is highly likely that Symbotic successfully penetrates a significant portion of its estimated ~$400 billion total addressable market in North America and Europe, across the general merchandise, food and grocery, apparel, home improvement, auto parts, and third-party logistics (3PL) markets.
At just 5% market share, that implies $20 billion annual revenue potential for Symbotic. Management is targeting 25% earnings before interest, taxation, depreciation, and amortization (EBITDA) margins as the business scales. That combination means Symbotic has the potential to produce $5 billion in annual EBITDA within the next 10 years. A simple 20X multiple on that means this could be a $100 billion company within a decade.
The company is worth just $19 billion today.
The long-term upside potential is enormous, even under conservative assumptions. And, just as important, considering early validation of the transformative tech from Walmart, Albertsons, and more, the stock’s ability to realize its upside potential is high.
This is unequivocally one of the top AI stocks to buy for the next several years.
The Top AI Stocks to Buy in 2025 #4:
AppLovin (APP)
Let’s be honest: There are some amazing buying opportunities emerging under a Trump administration. Growth stocks, particularly in the technology sector, are anticipated to be the biggest winners…
The reality is that, no matter who won the Presidential election, technological transformation won’t stop or even slow anytime soon. War or no war, inflation or no inflation, QE or no QE, innovative new tech platforms will continue to reshape our lives over the next several decades.
Therefore, if time is on your side, the best thing you can be doing right now as an investor is buying the AI stocks poised to soar throughout 2025.
Of course, certain buying opportunities look more appetizing than others…
Take AppLovin (APP) — a mobile marketing software company that has created a suite of tools to help mobile app developers publish, scale, market, and monetize their apps. Those tools include:
- AppDiscovery: A machine-learning-powered engine that uses proprietary algorithms to optimally connect the right apps to the right people.
- MAX: An ad-tech platform that allows mobile app developers to maximize revenue with in-app bidding.
- AppLovin Exchange: A programmatic mobile ad exchange that connects ad buyers to open mobile ad real estate.
- SparkLabs: A creative design engine that helps mobile app developers create more engaging ads and content.
- Adjust: An analytics engine that allows developers to automatically adjust their mobile marketing campaigns.
AppLovin is widely regarded as a leader in the mobile marketing software industry, which is scaling very quickly. AppLovin was founded in 2012 and came out of stealth mode in 2014. The company went public via an IPO in April 2021 at $80 per share. Today the stock trades at $250, with an $80 billion market cap.
Last year, the company’s revenues rose 92% year-over-year to $2.8 billion.
The company runs at ~80% gross margins, with 20%-plus EBITDA margins and positive net-profit and cash-flow margins.
AppLovin operates in a very competitive mobile advertising market, but it has cemented itself as one of the higher-quality players in the space with top-tier solutions and big-name clients.
This quality differentiation has only widened over the past 12 months as AppLovin has been the industry’s first-mover when it comes to integrating AI into its product suite. Its latest AI-upgraded platform – called AXON 2 – launched last year, and in just a few quarters, it has helped power ~50% growth across its software business. AppLovin is actively working to expand AI use across its entire product suite and hopefully achieve similar accelerated growth results in other business segments.
Post-election, APP stock shot up almost 50% after the marketing tech firm reported blowout quarterly numbers, driven in large part by the exceptionally strong demand for the company’s new AXON AI marketing placement tool.
In short, AppLovin is the leader in the secular-growth mobile advertising sector with a huge opportunity to drive market share expansion and accelerated growth through new AI tools.
The long-term bull thesis here is pretty simple:
Over the next several years, global advertising spend is likely to rise by 5% per year, in-line with historical standards of being just above average GDP. Digital ads will continue to expand their share of total ad spending, fueling around 6% to 8% growth per year in digital ad spending. Of that, mobile advertising should gradually expand its share, too, leading to ~10% growth per annum in mobile digital ad spending over the next several years.
We believe that AppLovin will be able to leverage its AI-driven product innovation to expand share of the mobile ad industry, leading to 10% to 15% compounded revenue growth. Those new AI products should give AppLovin more pricing power, which will push gross margins higher, while inherent economies of scale should drive positive operating leverage. The sum result? 20%-plus compounded earnings growth over the next several years.
That’s a great growth profile…
Indeed, we see earnings per share rising above $7 by the end of the decade.
APP’s EPS estimates have similarly been on the rise. Full-year 2025 EPS estimates increased from $5.43 to $5.49.
Long term, APP stock looks great. The company is driving sustained >30% revenue growth and sustained >60% EBITDA growth on the back of AXON AI, which we think is still in the early innings of its adoption cycle, so we believe APP can continue to drive 20% to 30% compounded revenue growth and >30% EBTIDA growth for the foreseeable future. All of that growth should help support continued strength in APP stock.
But valuation friction will likely limit further short-term upside in the stock. APP stock now trades at more than 40X our estimated 2025 EPS for the stock. That is a very big multiple for a ~30% profit grower which we think still has cyclical downside risks. Because of its full valuation, we recommend you wait for a better entry point before buying in.
The Top AI Stocks to Buy in 2025 #5:
monday.com (MNDY)
In my experience, people say all sorts of things. Sometimes, they mean it. Sometimes, they don’t. But they pretty much always put their money where their true beliefs lie – and that is exactly why I “follow the money” on Wall Street.
If money is flowing into a certain sector or stock, it’s probably best to follow along.
Right now, the money is flowing almost nonstop into artificial intelligence.
And I’m not talking just any money – I mean the “smart” money.
Microsoft, for example, has given $10 billion to OpenAI – the maker of ChatGPT – to fund the creation of complex large language models. Amazon has poured $4 billion of its own into another AI startup, Anthropic, to help create new generative AI technologies. Alphabet just dropped another $5 billion into its self-driving unit, Waymo. Meanwhile, Meta is investing $30-35 billion this year, largely in data centers to power its AI capabilities.
The list goes on and on.
However, while AI is undoubtedly the hottest sector on Wall Street, we suggest that investors focus on a different type of AI stock than what has dominated the market over the past two years.
That is, ever since the AI Boom started in late 2022, a particular type of AI stock – what we like to call the “AI Builders” – have been the biggest winners. These are the stocks involved in building the infrastructure necessary to support the Age of AI. Think things like AI chips, data centers, networking, and related equipment.
Those AI Builders have been all the rage. For example, from late 2022 to mid-2024, AI chipmaker Nvidia saw its stock soar more than 600%. And AI server supplier Super Micro rallied about 800%.
The ‘Builders’ dominated the first phase of the AI Boom. But now, it looks like we may be moving into this boom’s second phase, wherein the “AI Appliers“ will dominate.
Here’s why:
Information workers – or employees who use a smartphone, PC, or tablet at least one hour every week for work (the modern “desk” job) – only spend about 40% of their work-time actually working.
What’re they doing the other 60% of the time?
Answering emails (28%).
Gathering information (19%).
Internal communications (14%).
All the busy work that’s totally necessary in order to get actual work done, but which isn’t part of the job description.
That’s all according to a new survey from McKinsey, which broadly found that because of inefficient workflow management and communication tools at the enterprise, employees are wasting most of their work time.
That same survey also offered up a very simple solution: workflow management platforms which automate and streamline all that busy work so that employees spend their work time… actually working.
Such workflow management platforms will increasingly become the ubiquitous norm across the enterprise over the next decade as companies remove wasted time and boost employee efficiency.
Yet… only 62% of companies today use workflow management platforms.
Which means that there’s a whole bunch of companies out there (38%, to be exact) who will inevitably transition to workflow management software in the 2020s…
And that, of course, means right now is a great time to buy stock in companies which provide these workflow management solutions.
As I said at the top of this section, the first phase of this boom was all about building the infrastructure necessary to create AI applications. The second phase will be all about applying AI to create real-world value.
And it appears that phase is beginning right now.
Enterprise software provider Monday.com (MNDY) has noted that its new general AI (genAI) chatbot is successfully resolving customer service tickets, allowing Monday.com to address more customers without as many agents. This is driving incremental revenue growth while cutting costs. That’s why the company blew the doors off in its most recent quarter…
The enterprise software provider reported excellent quarterly numbers, which included 34% revenue growth and 131% operating profit growth. But the big story revolves around the company’s genAI chatbot…
That chatbot has been able to automatically resolve ~50% of all the CS tickets it has seen. In fact, it has been so good that MNDY has been able to cut about 30% of its CS staff, while actually doubling the number of CS tickets it handles. That is leading to big revenue growth and margin expansion, which is powering 100%-plus profit growth. Of course, that is also leading to a meaningfully higher stock price, too. Over the past year, MNDY stock added near-40% to top fresh cycle highs.
Folks, to us, the writing is on the wall. Companies are broadly figuring out how to deploy new AI applications to create real-world economic value.
And the AI Appliers — like MNDY — should reign supreme.
That’s why we think those stocks could be the biggest winners as the AI Boom continues to dominate over the next few months.
Clearly, the AI Applier stocks are catching fire. And we think they’ll be the leaders on Wall Street for the foreseeable future.
Be sure not to miss out on this big pivot. It will likely prove to be a fantastic way to profit in the Age of AI.
The Top AI Stocks to Buy in 2025 #6:
Duolingo (DUOL)
For a moment, think back to any old school spy movie… maybe a James Bond flick.
In those movies, the spy – whether male or female – is always sharply dressed, usually smart as a whip, and knows all those nifty action moves. They’re the quintessence of “cool.”
Another characteristic most of these savvy characters share? They almost always speak a foreign language. Because speaking a foreign language is worldly, and being worldly is “cool.”
It’s also very useful. Ever been lost in a foreign country? Or ever wanted to get a job that required multilanguage skills?
Speaking a foreign language is a great asset.
And yet, it’s an asset that many of us do not possess. A 2013 YouGov survey found that 75% of Americans speak only English, with no second language.
Of course, we all know why that’s case: learning a foreign language is hard – hard enough that most of us don’t even attempt it…
Foreign language books are dull and boring. And oftentimes, folks don’t get past the first few pages. Meanwhile, classes are expensive, take forever, and can conflict with our busy schedules. They can also be quite uncomfortable if you’re not a “people person.”
So, the result is that while most of us want to learn a foreign language, very few of us actually do.
That’s all changing right now…
One freshly public tech startup has figured how to make learning a new language fun, interactive, cheap, convenient, and easy. Along the way, it’s eliminated many of the barriers that have kept a majority of Americans from learning a new language.
Indeed, we believe this company’s new digital platform – which essentially gamifies foreign language learning – could dramatically expand the language learning market by many multiples… and that market is already worth $61 billion.
Best part about this company? It’s only worth $13 billion today…
Duolingo (DUOL) is a language-learning education platform that has figured out how to gamify and digitize the language-learning process so that it can be done from an app — at no cost to the user — in a fun, engaging, social, and convenient way.
The company offers 100-plus total courses across more than 40 distinct languages, and each one of those courses is hyperpersonalized; progresses at the pace of the individual user; includes games, tournaments, and friend challenges; has a cute little bird mascot that helps you out; and runs entirely through an on-demand app so that you learn wherever you want, whenever you want.
Trust me. Duolingo makes learning a language as fun as humanly possible. Everyone on our team has tried the app — and loves it.
But don’t take my word for it. Download the app, and see for yourself. There’s a reason the app has a 4.7-star rating on 1.4 million reviews in the App Store.
OK, that’s great and all. Duolingo has figured out how to make learning a language fun. But what’s the bull thesis here? Where’s the upside for the stock?
To answer that, let me give you a number: 80%.
That’s how many Duolingo users in the U.S. were not already learning a language when they began using the app. These are people who were interested in learning a foreign language — but never had the time or money to do so — downloaded the Duolingo app, and got hooked.
That’s most of the users on Duolingo.
In other words, Duolingo isn’t just taking over the language-learning market by making the process more fun and accessible. The company is growing the market by 4X!
Now, that’s a big deal because as it currently stands, the language-learning market is a big one. It measures about $60 billion. Duolingo, then, is essentially creating a new market that could one day be worth upwards of $240 billion.
And yet, Duolingo’s market cap today is just $9.7 billion. That delta implies a huge opportunity for the company. And management is capitalizing on it with flawless execution.
The company is presently growing at lightspeed. And this growth isn’t anything new. Duolingo has been steadily growing its user base throughout its entire business life.
We predicted that there was ample evidence to suggest that Duolingo could one day turn into a language-learning app used by hundreds of millions of people across the globe. As of this writing, Duolingo has 113.1 million monthly active users and 37.2 million daily active users. The language-learning app also has over 500 million registered users, and 113+ million of those are active once a month.
We still believe that Duolingo has the potential to be a $50-plus billion ed-tech giant in the future.
The Top AI Stocks to Buy in 2025 #7:
Axon Enterprise (AXON)
Law enforcement technology company Axon (AXON) has long been one of my favorite growth stocks in the market. Axon is a law enforcement technology solutions provider that is helping police agencies across the globe modernize and leapfrog into the digital era. The company’s core offerings include body and dash cameras, tasers and smart weapons, and cloud-hosted records management and dispatch software.
My bullishness dates back to when Axon was still named Taser International, and traded under the ticker symbol ‘TASR.” At the time, the TASR stock price was $20. Today, AXON stock trades near $500.
The bull thesis on AXON stock this entire time has been shockingly consistent and simple.
Law enforcement agencies across the globe are antiquated. They’re stuck in the 20th Century. They need to modernize and digitize. Axon is creating a suite of compelling products to help them do just that, like body cameras, smart weapons and cloud-hosted records management systems.
The company has virtually no competition in this space, having either acquired or squashed all other relevant police tech companies.
The opportunity is enormous, as police spending in the U.S. measures nearly $200 billion every year — and peaks into the trillions of dollars globally. The business model is highly profitable, as Axon commands pricing power on its hardware products given the lack of competition, and is quickly growing its much-higher-margin software business.
From head to toe, AXON stock is a winner. That much is obvious. But you may be looking at the AXON stock chart and asking yourself: Did I miss the opportunity to buy AXON stock?
No. Far from it. In fact, there’s never been a better time to buy AXON stock.
Here’s why.
With Donald Trump now the President-elect of the United States, police spending in America is in a position to surge over the next few years — and all those dollars will likely get allocated to the things Axon sells.
Here’s the thing.
According to Trump’s campaign, “there is no higher priority than quickly restoring law and order and public safety in America.”
During Trump’s previous tenure as the U.S. President, he threatened to deploy the National Guard into major cities to quash violence. He also aimed to militarize the police, swiftly rolling back President Barack Obama’s executive order limiting the distribution of military-grade weapons to state, local, and federal law enforcement agencies.
So, it’s safe to say that police spending will increase dramatically over the next four years — and maybe even longer.
Over that stretch, sociopolitical pressures will force law enforcement agencies to spend that extra budget on things that actually improve law enforcement operations. Things like smart weapons (to decrease fatal encounters), body cameras (to increase transparency), cloud solutions (to improve operational efficiency), etc.
Axon sells all of those things. Indeed, they sell the best smart weapons, the best body cameras, the best cloud solutions, so on and so forth.
Net net, it looks like Axon is positioned to have a blockbuster next four years — and AXON stock will power way higher during this stretch.
As police spending significantly increases, Axon’s business momentum will continue accelerating — even without expanded police budgets.
In 2024 alone, Axon has done the following:
- Partnered with LVT, a mobile security solutions provider, to enable retailers, businesses, and law enforcement to share real-time security footage and information. LVT aims to improve threat monitoring and response capabilities in areas that are typically difficult to secure. This is cool because of Axon’s newest AI product – Draft One – which uses AI to take video data and craft police reports, so Axon has clearly developed the AI technology necessary to deliver insights from video data. This partnership creates a new avenue for AXON to commercialize that valuable AI tech.
- Provided the U.S. Marshals Service with its TASER 10 less-lethal energy weapon to help its deputies catch fugitives and keep courtrooms safe. With this new weapon, users can shoot probes farther, which allows them to pause and consider their options before attempting to stop a potentially dangerous person. Additionally, the U.S. Marshals Service is also testing a virtual reality training program.
- Teamed up with Skydio to create an integrated solution for drones in public safety. This system lets agencies send out drones to emergency calls, providing real-time information from a safe distance, speeding up response times, and optimizing resource allocation.
That’s all in just one quarter. Talk about momentum.
With all this momentum at its back, Axon is in a great position to turn a surge in police spending over the next four years into a surge in revenues and profits at the company.
As that happens, AXON stock will power higher.
Axon is largely without competition in this space, having either acquired or smashed every other relevant law enforcement tech company out there. Simultaneously, demand for law enforcement tech is rapidly rising, as every police agency is marching toward ubiquitous uptake of cameras, tasers, and cloud software. That combination gives Axon robust visibility to sustain huge growth over the next few years.
Axon stock has been an overperformer for several years, ever since the company pivoted from selling just tasers, to selling a full stack of law enforcement tech solutions. It will remain an overperformer for the next five-plus years.
We view AXON stock one of the most durable tech growth stories in the market, and believe that durability remains undervalued in shares.
The Final Word
Markets are volatile. Tariffs are whiplashing. Musk is feuding with Navarro. And yet, AI is accelerating.
We think this is like 2008 or 2020—a moment where chaos hides enormous opportunity. Our strategy is to scale into winners, stay tactical, and follow the signals coming out of Washington.
After all, the AI revolution is in full swing now, and it’s only going to become more pronounced from here.
Artificial intelligence has been in use for years, but there were no widely applicable solutions until the introduction of ChatGPT.
OpenAI’s focused AI system has completely changed the game, showing the world what AI is capable of. It’s good. It’s really freakin’ good. But regardless of what headlines you may read online, ChatGPT is not gaining sentience and taking over the world … we’re still a long way from having true general AI, which is the kind of artificial intelligence you see in the movies.
General AI is the stuff we see in science fiction movies. Think Jarvis from Iron Man or HAL 9000 from 2001: A Space Odyssey. Those systems are cool, and they’re what we all think about when we think of artificial intelligence. Naturally, then, investors get excited when a company says it is making a general artificial intelligence system like those we’ve seen in movies.
But if you hear a firm make that pitch, run the other way.
Those are startups that will promise the moon but never deliver. They’ll be powered by investor “hopium” until they find themselves in the stock market graveyard.
Avoid those stocks.
Buy companies that have realistic goals and realistic pathways to huge success. Find the ones that are developing world-class narrow AI to do one thing very efficiently. Those are the stocks that will soar thousands of percent over the next few years and establish defensible monopolies in certain sectors of the global economy.
We hope you found this special report useful. Before we go, let us remind you that you’re now also a member of my free Hypergrowth Investing newsletter.
By uncovering early investments in hypergrowth industries, we put you on the ground floor of world-changing megatrends. Keep an eye on your email inbox for my next Hypergrowth Investing article soon. I typically send them every day of the week. In the meantime, you can check out our website by clicking here.
