Come gather, friends, around the ol’ holiday fire, and let us engage in the annual gazing into a crystal ball and predicting market movements in the near future, a tradition as uncertain as it is ubiquitous. Foreseeing market trends is a challenging (if not impossible) game, leading most prognostications to be either too vague, off the mark, or, occasionally, accidentally right. Essentially, the market itself is a sophisticated prediction tool, leveraging the input of all market participants to process an enormous number of variables, including the economic backdrop, corporate performance, and growth potential, somewhat efficiently wrapping it all up in a price.
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Spotting and taking advantage of mispriced probabilities, future trends, or market events takes luck, skill, and intestinal fortitude to seize brief moments of market inefficiency. The unpredictability of the outcome is part of the ride!
While I claim no sophisticated powers of foresight, here are a few trends and stocks I am following into 2025 that are worth monitoring for a potential window of opportunity.
Quantum Computing
Alphabet (GOOG), Google’s parent company, recently made waves in the technology world with the launch of its latest quantum chip, Willow. This exciting innovation completed a benchmark computation in under five minutes—a feat that would have taken the most sophisticated traditional supercomputers an unfathomable ten septillion years. This achievement led to a year-end surge in the shares of quantum computing companies.
Though the commercial use of quantum computing is yet on the horizon, the Willow chip’s prowess in error correction and computation power heralds an inflection point for this burgeoning industry, which is predicted to reach a staggering market size of $850 billion within the next sixteen years. The potential applications of this technology are boundless, as quantum capabilities could solve complex problems spanning fields from medicine and energy to AI and transportation.
While the approach to solving the quantum conundrum differs across these firms, here are a few quantum computing companies that may be well-positioned to give Alphabet a run for its money: IonQ (IONQ), D-Wave Quantum (QBTS), Quantum Computing (QUBT), and Rigetti Computing (RGTI).
Flying Cars
2025 is shaping up to be the year we finally get flying cars, also known as eVTOLs (electric Vertical Take-Off and Landing vehicles). Despite enthusiasm and abundant resources, the industries’ progress to date has been stalled significantly by a complex certification process. While these certifications are essential for assuring safety and operational regulations, they’ve proven to be a tough challenge for both eVTOL manufacturers and regulatory authorities.
As we close out 2024, no company has yet secured all necessary certifications, with over 80% still awaiting certification approval. However, several firms, such as Joby Aviation (JOBY) and Archer Aviation (ACHR), are efficiently navigating this process and are well-positioned to launch towards the end of 2025. The industry expects a significant surge once it reaches the commercialization stage, with these manufacturers already sporting pre-filled order books and targeting annual production of over 500+ units moving forward.
Crypto Mining & AI Data Centers
Cryptocurrency mining has emerged as a potentially profitable avenue, as the top cryptocurrencies have shown strong performance this year. That trend will likely continue with the Trump Administration’s embrace of crypto. As the prices of cryptocurrencies rise, so do the margins for crypto miners, which has led to significant interest in crypto mining stocks. Some of the top-performing amongst these that investors might want to add to their tracking list for 2025 include Cipher Mining (CIFR), Core Scientific (CORZ), CleanSpark (CLSK), Hut 8 Mining Corp (HUT), Marathon Digital Holdings (MARA), Riot Platforms (RIOT), and TeraWulf (WULF).
Many of these companies have leveraged their expertise with high-performance computers (HPCs) to take advantage of the accelerating demand for artificial intelligence and launch ancillary services such as building and managing HPC data centers, suggesting a shift towards a further expansion of their earnings profile.
The demand for these types of data centers could potentially double if generative AI development continues at its current trajectory. Consequently, as this sector continues to expand, it’s clear that both AI-driven data centers and cryptocurrency mining will become increasingly pertinent for investors to be aware of.
Conflict and Geopolitics
The world has become increasingly turbulent, with 56 active armed conflicts this year—the highest number since WWII. This surge in conflict and an uptick in cyber threats have created a booming market for defense-related industries, particularly unmanned aerial systems or drones.
The U.S. drone market alone is predicted to grow to an astounding $82.9 billion by the end of 2032. That’s an impressive compound annual growth rate of 22.2%. Military drones currently dominate this market, claiming nearly half the market share last year.
Companies like AeroVironment (AVAV), Kratos Defense & Security Solutions Inc. (KTOS), and Ambarella Inc. (AMBA) are making the most of this trend.
AeroVironment recently landed a $990 million contract from the U.S. Army for its Switchblade 300 loitering missile systems. Kratos recently clinched a consolidated contract worth roughly $80 from the U.S. Air Force. At the same time, Ambarella has had success producing semiconductor chips designed to integrate ultra-high-definition compression, image processing, and deep neural network processing necessary for drones with AI integration.
The Ride Ahead
As we look to next year, the financial landscape continues to evolve, making ‘certainty’ a word best avoided, especially when making prognostications. Yet, in this uncertainty lies potential: potential to innovate, grow, and prosper. Quantum computing, eVTOLs, cryptocurrency mining, AI data centers, and defense-related industries are all on the brink of significant breakthroughs. While the journey ahead will inevitably be marked by highs and lows – the opportunities, the challenges, and the surprises make it a ride worth taking. Markets never sleep – stay alert, stay informed, and invest wisely. Here’s to a prosperous 2025!
