Hello fellow investors,
Another year has flown by (way too fast) so its time to stick to tradition and make some fun market predictions for 2025. My last few annual predictions aged quite well (PLTR), earning remarkable 80% returns annually for each (yes, I said each) year so I'm hoping for the same in 2025.
But as we look ahead to 2025, the stock market landscape presents an odd amount of optimism, and that makes me cautious. The last two years were quite incredible for most investors, marking two consecutive bullish years with an impressive 25% growth on the S&P500.
However, the question on everyone’s mind is: can this upward trajectory continue? While enthusiasm remains high, I anticipate a slower, much more tempered pace in 2025, with the S&P 500 likely to see a maximum growth of just 5% by year’s end.
Prediction 1: S&P500 will see modest 5% growth by Year End 2025, larger growth will be concentrated to small amount of big tech stocks and bitcoin
So why only 5%? Well lets take a look at a few things.
In the political arena, Orange man is coming back and as he did before, he will focus on the stock market as a key measure of success, amplifying market sentiment and policy-driven narratives. So early 2025, we can expect enthusiasm and growth, particularly in January, driven by renewed investor confidence. Investors did give him the nickname Donald Pump for a reason.
Check out this graph below. I think its one of the most intriguing factors influencing 2025, the deployment of $7 trillion in cash still sitting on the sidelines. Right now this cash is sitting in Money Market funds, but people will get greedy as they tend to do and throw this cash back in market as they seek higher returns with lowering interest rates. That should raise the markets at a minimum.
However, I'm predicting a significant cyclical pullback is likely to unfold in March or so, testing the resilience of the markets. The catalyst? Could be China, could be tariffs, but I think it will be inflation sneaking back in and spooking the markets.
But overall with interest rates gradually dropping or even staying at current levels, this capital on the sidelines is poised to re-enter the market. The big question is: where will this influx of funds flow, and how will it shape the sectors and stocks of tomorrow?
I'm betting on bitcoin and big tech more than general S&P500.
Prediction 2: Bitcoin will be volatile as always, but it will reach 140k at some point, MSTR will hit $800 per share
I wrote about currency debasement recently so I'm not going to repeat my bull case scenario for bitcoin. But money on the side entering the markets will send bitcoin to a high of $140k before it retreats probably down to the $80-90k range. This in turn will send MSTR flying to a high of $800 in 2025, but it will come back down as well. Still I will keep adding shares of MSTR on dips and will look to sell a larger portion once it reaches my target of $800. MSTR might dip down below $300 but overall it will be a volatile ride for both BTC and MSTR.
Other crypto might perform well but I will stay away from all other coins as I find the majority of them to be absolutely repulsive. One thing I am interested in is a potential Ripple ETF, if this comes out in 2025 (I'm predicting it does), then it maybe something I invest in. But I'll save that for a different post.
The main drivers behind bitcoin's growth will be governments purchasing more coins in 2025 as strategic reserves. The Bitcoin Act of 2024 is being presented to Congress, which states the US Department of Treasury must purchase one million bitcoins over the next 5 years. Will this bill pass? Maybe. Maybe not. But if it does expect every other major treasury in the world to follow. In fact there's already talks in Germany, China, Japan and the Netherlands for governments to start setting up bitcoin reserves. I expect more corporates will purchase bitcoin as well.
Alright on to PLTR, my (and hopefully your) favorite future trillion dollar company.
Prediction 3: Palantir will grow due to Software Phase of AI Revolution
This year was far too good for Palantir. I say far too good as a lot of my former work colleagues reached out to me (after years) to ask me if they would still buy PLTR at these prices. I told them what I tell everybody:
"When it was $8 a share, I told you to buy it since it was going to $100. Now that its $70, does that change that its going to go to $100?"
This year’s growth, driven by outstanding commercial performance, has been nothing short of phenomenal. If you’ve been following my posts, I hope you snagged as many shares as I did when they were trading below $10—and are now well on your way to planning an early retirement. But don’t cash out just yet—there’s still more to come.
As we witness the ongoing AI revolution, it's becoming clear that key players in hardware, software, and data management are positioned for even more growth. 2024's focus was on AI hardware. And on the hardware front, NVIDIA had a parabolic 2024 due to their chips powering the burgeoning AI industry. From training massive AI models to enabling advanced applications, NVIDIA's GPUs are still indispensable in the AI ecosystem.
But I think AI is transitioning into the software phase of its revolution, and Palantir is uniquely positioned to thrive during this period. Over the next four years, Palantir's commercial and government business is expected to experience substantial growth.
Palantir's AI Platform (AIP) is set to attract more corporate clients as organizations seek tools to derive actionable insights from their vast data troves.
Ontology, or the ability to organize and extract value from data, is critical in a world drowning in information. Palantir still remains the only firm capable of delivering this at scale, providing it with a strong competitive edge.
On the government side of things, political ties may further bolster Palantir's business here. The Trump administration has recently brought in individuals with strong connections to PLTR
- Jacob Helberg, appointed as Undersecretary of State, is a senior advisor at Palantir
- Peter Thiel, Palantir’s co-founder, maintains close relationships with influential figures such as Vice President Vance and Elon Musk, who is a trusted.... advisor(?) and confidant to President Trump
- David Sacks, the new AI Czar and a close associate of Thiel, has publicly acknowledged Palantir’s unique AI moat
Furthermore, Palantir’s technology could be instrumental in Trump's promised government cost-cutting efforts. I predict Elon and his Department of Government Efficiency will leverage Palantir's AIP platform to "streamline operations and reduce spending"—professional way of saying they will slash jobs and costs. It might be bad for the market and short term labor market (if DOGE fires too many government employees) but it could provide a good boost to PLTR stock.
So, I'm still bullish and see PLTR's growth (and stock price) continuing in 2025. Will it have the type of growth NVIDIA had in 2024? Probably not, but it will still outperform the market.
Now talking about AI, software and Elon, I have to bring up TSLA.
Did you know that last year, the Tesla Model Y was the best selling car in the world?
Impressive, right? Tesla’s growth prospects remain as electrifying (pun intended) as ever. While it continues to dominate the EV market—with the highly anticipated Model Q on the horizon—Tesla’s true strength lies in its innovation beyond vehicles. Its cutting-edge software (which is enhanced by ontology and AI), expanding charging infrastructure, and advancements in autonomous driving, including the game-changing Robo-taxis, position the company for sustained, long-term success.
With these developments, I'm expecting TSLA to reach a stock price of $600 by the end of 2025.
Are there any other parts of the tech sector that are poised to outperform the market in 2025? I think so.
Prediction 4: Cybersecurity & Quantum Computing stocks will take off
The Western world continues to face relentless cyberattacks from Russian hackers. This issue feels especially personal, as Poland ranks as the most targeted country in the world for cyberattacks on a per capita basis.
In 2025, companies of all sizes will need to prioritize cybersecurity like never before. I anticipate a record level of investment in this critical area, driving cybersecurity stocks to outperform the broader market. Among the options available, I believe the First Trust NASDAQ Cybersecurity ETF (CIBR) stands out as the best choice right now.
Over the past five years, CIBR has been the top-performing U.S.-based cybersecurity ETF, delivering an impressive annualized return of approximately 18.16%. With the increasing focus on cybersecurity, I expect this strong performance to continue in 2025, making CIBR a compelling investment opportunity.
Another area I expect to see significant growth in the market is quantum computing. Google recently made headlines for advancements in its quest to achieve quantum supremacy, a milestone that could revolutionize technology as we know it.
Quantum computing fundamentally changes how problems are solved by leveraging quantum mechanics. Unlike traditional computers, which process information in binary (0s and 1s), quantum computers use qubits that can exist in multiple states simultaneously. This allows them to perform complex calculations at speeds unimaginable for classical systems, unlocking potential in areas like cryptography, drug discovery, and artificial intelligence.
While the field is still in its infancy, I anticipate quantum computing to become a major buzzword in 2025. For investors, it’s important to recognize that the breakthrough could come from anywhere. If it's an American or European firm, there’s a strong chance the company will be listed on the Nasdaq, making ETFs like QQQ a solid way to gain exposure.
However, if a Chinese or BRICS nation company leads the charge, the geopolitical implications could be severe, shifting the balance of technological power. In that scenario, we might be f*cked. Either way, keeping a close eye on quantum computing developments is crucial for staying ahead of the curve in investing.
Did you get all that?
So the markets in 2025 presents a landscape which should make investors cautious and strategic in their moves.
While we might only see modest gains in the S&P 500, there’s real potential to score big in areas like big tech, Bitcoin, and growing sectors like cybersecurity and quantum computing. Making the right moves will be crucial to beating the market.
Wishing you all a strategic and successful year—Good Luck, Merry Christmas and have a fantastic New Year!
