TECH - Ready For A Bull Run? Analyst Says 'Virtuous Investment Cycle' To Propel Stock Market To Record Profits | Benzinga
The stock market is on the verge of a “virtuous investment cycle” that could drive corporate profits to new heights, according to a recent note from Bank of America.
What Happened: Bank of America’s strategist Savita Subramanian has suggested that the stock market is about to experience a significant upturn, driven by corporate investments in artificial intelligence (AI). This surge in spending is expected to boost S&P 500 earnings per share, reported Business Insider on Tuesday.
Subramanian has revised her 2024 S&P 500 earnings estimate to $250 per share, up from $235. This would represent a 12% year-over-year increase in corporate profits. For 2025, she has forecasted an S&P 500 earnings per share of $275, indicating a 10% year-over-year growth from her 2024 projection.
“We see a potential virtuous cycle forming from AI investments. Semis and networking are the most obvious beneficiaries, but increased power usage and the physical build-out of data centers will lead to more demand for electrification, utilities, commodities, etc,” Subramanian said.
The recent stock market rally has been largely driven by better-than-expected fourth-quarter earnings. Subramanian believes that this trend will continue as AI technologies become more widely adopted, leading ...