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Ameriški trgi so imeli močno leto, ki ga je zaznamovala umetna inteligenca.

Artificial Intelligence (AI) has dominated stock markets over the past year, bringing unprecedented growth to tech giants. It has become an integral part of major companies' products but has also been a source of concern about over-investment. Moreover, further challenges are expected in 2025, particularly as a result of the policies of the new Trump administration, which could have a major impact on the US economy.

Ameriški trgi so imeli močno leto, ki ga je zaznamovala umetna inteligenca.

AI Reigned Supreme in 2024

The year 2024 was primarily defined by artificial intelligence, in which big corporations invested billions of dollars, heavily influencing the stock prices of semiconductor manufacturers and chip design firms. NVIDIA, nearly unrivalled in this field, experienced unprecedented growth. TSMC, a leading chip manufacturer, also had a stellar year, with its stock price doubling.* These components' production remains highly concentrated in Taiwan and limited to only a few companies. Noteworthy as well is British firm ARM Holdings, which designs chip architectures primarily for mobile devices. It achieved strong profit growth last year and is expanding its AI efforts with the help of parent company SoftBank.

At the other end of the supply chain are companies like Microsoft, Apple, and Amazon.com. These firms transform AI processes into products for end consumers, whether software or hardware, and have seen immense potential in AI. Key segments in their financial reports are products and services leveraging AI technology, with revenue growth often serving as an indicator of broader market demand. However, market cycles can cause fluctuations throughout the year. Investors, accustomed to rapid growth in AI revenues and constant beating of expectations, also faced concerns about excessive investments in this technology without clear short-term returns. These worries are likely to carry into the new year.

Snímek obrazovky 2025-01-06 v 13.02.42

Nvidia stock price performance over the last 5 years:* https://www.investing.com/equities/nvidia-corp

Snímek obrazovky 2025-01-06 v 13.03.10

TSMC stock price performance over the last 5 years:* https://www.investing.com/equities/taiwan-semicond.manufacturing-co

Fed Steps in to Support the Economy

On Wednesday, December 18, 2024 the US Federal Reserve cut its main interest rates by 0.25%, bringing them to a range of 4.25% to 4.5%, as expected. This move reflects its effort to support economic growth while continuing to combat persistent, though easing, inflation. The Fed emphasized that inflation is gradually approaching its 2% target but remains slightly above it. This indicates that price declines are slower than ideal, warranting a slight economic boost. The central bank also highlighted lingering uncertainty in economic development and risks to its goals of full employment and price stability.

While economic activity showed remarkable growth, there are signals it may start weakening. By lowering rates, the Fed aimed to encourage investments and consumer spending by reducing financing costs for businesses and households. Alongside rate cuts, the Fed continued gradually reducing its holdings of government bonds and mortgage-backed securities to limit excess liquidity in the economy and ensure effective monetary policy implementation. However, the Fed hinted at potential policy changes if conditions required, raising concerns about possible rate hikes later in the year.

What Lies Ahead in 2025

The year 2025 could bring significant changes. The upcoming Trump administration in the US plans to focus on reducing corporate tax burdens and easing some market regulations. This could lead to faster economic growth but also heightened inflation. [1] A key issue will be the implementation of promised higher tariffs on all imports, which some experts see as a risk to domestic companies, potentially having the opposite effect than intended by the Republicans intentions.

Long-term outlooks require looking beyond short-term developments. Despite Federal Reserve officials' comments on higher-than-expected inflation, price fluctuations remain under control. Former Fed Vice Chair, Alan Blinder, now a professor of economics at Princeton University, has noted that immediate market reactions, like those seen before Christmas, tend to be exaggerated and detached from reality. The fact remains that the US economy is growing faster than the global trend. Moreover, the political uncertainty that burdened markets over the past year has eased following the presidential elections.

David Matulay, analyst of InvestingFox

* Historical data is not a guarantee of future performance.

[1] Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on current economic conditions that may change. These statements are not guarantees of future performance. Forward-looking statements by their nature involve risk and uncertainty because they relate to future events and circumstances that cannot be predicted, and actual developments and results may differ materially from those expressed or implied by any forward-looking statements.

Caution! This marketing material is not and should not be construed as investment advice. Historical data is not a guarantee of future performance. Investing in foreign currencies may affect returns due to fluctuations. All securities transactions may result in both profits and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on current economic conditions that may change. These statements are not guarantees of future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s. regulated by the National Bank of Slovakia.

 

Sources:

https://www.cnbc.com/2024/05/13/softbanks-arm-to-launch-ai-chips-by-2025-amid-explosive-demand.html

https://www.reuters.com/technology/artificial-intelligence/meta-microsoft-lift-ai-spending-worrying-wall-street-ahead-amazon-results-2024-10-31/

https://www.federalreserve.gov/monetarypolicy/files/monetary20241218a1.pdf

https://www.investing.com/news/economy-news/feds-powell-not-ready-to-say-what-trump-policies-will-do-to-economy-3780215

https://www.investing.com/news/stock-market-news/feds-comments-trigger-market-overreaction-says-former-fed-vice-chair-93CH-3781378

https://edition.cnn.com/2024/12/12/business/trump-toy-prices-tariffs-inflation/index.html

InvestingFox je ochranná známka spoločnosti CAPITAL MARKETS, o.c.p., a.s., so sídlom Slávičie údolie 106, mestská časť Bratislava – Staré Mesto, 811 02. Spoločnosť je zapísaná v Obchodnom registri Mestského súdu Bratislava III, oddiel: Sa, vložka č.: 4295/B, IČO: 36 853 054, IČ DPH: 2022505419.

CAPITAL MARKETS, o.c.p., a.s. je obchodník s cennými papiermi podľa § 55 ods. 1 zákona č. 566/2001 Z. z. o cenných papieroch a investičných službách a o zmene a doplnení niektorých zákonov v znení neskorších predpisov (ďalej len „zákon o cenných papieroch“). Dňa 30. októbra 2007 bola spoločnosti CAPITAL MARKETS, o.c.p., a.s. rozhodnutím č. OPK-2297/2007 Národnej banky Slovenska -PLP udelená licencia na poskytovanie investičných služieb podľa § 54 ods. 2 v spojení s § 59 ods. 2 a 3 zákona o cenných papieroch, ktorá bola v súlade s ustanoveniami zákona o cenných papieroch rozšírená rozhodnutím č. OPK-1830/2008-PLP zo dňa 21. apríla 2008, rozhodnutím č. OPK-11601-1/2008 zo dňa 28. januára 2009, rozhodnutím č. ODT-5059-3/2012 zo dňa 23. júla 2012 a rozhodnutím č. ODT-9332/2014-1 zo dňa 21. októbra 2014.

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