Technology intensifies its dominance with the emergence of artificial intelligence

According to Gustavo Martínez, professor of finance at the Francisco Marroquín University, some of the most prominent technology companies are expected to maintain strong growth until mid-2025, driven by innovation in key areas. Some of the ones that see the most potential are Nvidia, ASML and Apple.

In Nvidia’s case, its focus on AI and machine learning, as well as its leadership in hardware and data centers, are boosting its performance, he says. ASML, for its part, is benefiting from the increase in demand for advanced chips, where its lithography equipment is crucial, he says. Finally, Apple continues to expand in digital services and explore technologies such as augmented and virtual reality, which drives its sustained growth, adds Martínez.

According to Javier Hombría, professor of the master’s degree in stock markets and financial markets at the IEB, several technology companies such as Apple, Microsoft, Alphabet, Amazon, Meta, Tesla and Nvidia in the United States, along with ASML, SAP and Ericsson in Europe, project a notable growth until mid-2025.

This advance is supported by several key factors, including a possible relaxation in antitrust policies in the United States, which would alleviate regulatory pressure on technology giants and open the door to freer expansions, comments the expert. Additionally, continued innovation in artificial intelligence and cloud services remains relevant, given the growing demand for advanced digital infrastructure, says Hombría.

According to Tom Demaecker, manager at DPAM, the semiconductor sector remains profitable despite the economic slowdown, driven by demand for AI. Although it faces geopolitical risks, especially in Taiwan, its essential role in the modern economy suggests sustained growth in the medium term. For his part, Cabrera highlights TSMC as the undisputed leader in the foundry of advanced chips, with a dominant position in semiconductors smaller than 5 nanometers, key for AI. Its competitive advantage and economies of scale strengthen its future growth, he assures. Hombría also highlights the investment interest in various technologies. Quantum computing, with advances led by IBM and Google, promises to revolutionize sectors such as cryptography in an environment of increasing defense against China, he says.

Martínez agrees in this regard, pointing out that, in addition to artificial intelligence and data management, quantum computing is gaining attention due to its transformative potential in multiple sectors. IBM, through its IBM Quantum platform, and Alphabet, through Google Quantum AI, are leading innovation in this field, developing advanced quantum systems and algorithms that could redefine processing power to address problems beyond the scope of classical computing.

In telecommunications, Hombría considers that companies such as Ericsson and Nokia are leading the deployment of 5G networks, essential to boost connection speed and new IoT applications. Likewise, cybersecurity companies such as Palo Alto Networks and CrowdStrike become key in the face of the rise in digital threats, he comments.

«One of the sectors that is growing the most is cybersecurity. Beyond the management and processing of data, it is necessary to maintain data security and today cyber attacks are one of the main problems that both private companies and governments can encounter. In that sense, we highlight Palo Alto. The company anticipates that its clients’ future contractual obligations will grow by around 20% in its fiscal year 2025,” says Cabrera. «Other technologies “emerging ones would be the internet of things or biotechnology and digital health,” says Martinez.

Other niches

Regarding other trends, Demaecker, from DPAM, considers that another relevant issue is the increase in demand for GLP1 weight loss medications. “The market for obesity treatments is huge, and these drugs offer health benefits beyond weight loss, such as improvements in sleep apnea and cardiovascular health. Looking ahead to next year, the key issue will be determining the full market potential of these drugs,” he says.

However, despite the interest generated by other sectors, all analysts emphasize the great importance of AI as a megatrend. Among them, Tom Demaecker highlights his conviction in the transformation of cloud computing, driven by AI. As companies migrate data to the cloud, this technology facilitates the adoption of generative AI, improving security, flexibility and costs.

Uncertainty

However, given the rise of large technology companies, some challenges could slow down the dizzying growth expected for the coming years, such as geopolitical tensions, regulatory changes, excessive valuations of some stocks and fluctuating interest rates.

Among the risks identified by Javier Hombría are geopolitical tensions and protectionist policies, which could complicate logistics chains and put pressure on prices. Furthermore, a more aggressive policy in the Middle East, as seen in Israel following the change in the Ministry of Defense, could trigger a rise in oil prices, raising production costs. Semiconductor shortages also remain a concern, with limited capacity affecting production in key sectors. Growing privacy regulation in Europe could intensify restrictions on data handling, even if they are relaxed in the US, except in specific cases, such as the expected ban on TikTok for the benefit of Meta.

Gustavo Martínez highlights that the market will carefully observe business results in 2025, since the performance of technology companies will be key to justifying their current high valuations. Interest rates are also a critical factor: if they rise, financing for innovative projects would become more expensive, affecting the expansion of the sector. In addition, high interest rates reduce the present value of future cash flows, which could reduce the valuations of technology companies, given that their price depends largely on these projections.

For his part, Cabrera emphasizes that an economic slowdown could limit investments in AI, a technology that depends on a context of solid growth. The example of Meta, which in 2023 prioritized efficiency and reduced costs, illustrates this point. If the global economy cools and advertising spending decreases, companies like Nvidia, AMD, TSMC or ASML are also likely to face restrictions on their investments. Furthermore, high interest rates tend to favor safe assets, which could lead to a correction in the valuations of these high-growth companies if market expectations are not met.