AI is bringing significant change to how stocks are picked by investors due to how fast AI models can sift through data.
These systems can also analyze news, social media, and financial documents almost instantly to give any potential investor of a company a high-level overview of what they are getting into. In fact, a survey showed that over 90% of investment managers are either using or planning to use AI in their investment processes
It’s a good idea to adapt to this trend because AI models can improve stock market predictions to some extent, though predicting the stock market with 100% accuracy is nearly impossible. In my opinion, combining AI’s ability to go through large amounts of data with human scrutiny could give you the best result.
For example, Amplify AI Powered Equity ETF (AIEQ) (NYSEARCA:AIEQ) is mainly driven by AI, and its returns have trailed that of QRAFT AI-Enhanced US Large Cap ETF (NYSEARCA:QRFT), which involves human scrutiny.
I will be replicating the latter ETF’s strategy by asking DeepSeek which stocks it thinks will surge this year and then I’ll give you my take on it. Here are the three stocks DeepSeek thinks will go up the most in 2025:
Nvidia (NVDA)
Despite slowing down over the past couple of months Nvidia (NASDAQ:NVDA) is still the most popular stock in the market right now. It has also been the most discussed stock, so DeepSeek has likely decided to play it safe by going with the crowd with this first pick.
Regardless, the AI model cites Nvidia’s dominance in AI GPUs and its Blackwell platform as to why it thinks it will surge this year. DeepSeek wrote that “DeepSeek’s forward earnings model (55x P/E on $4.51 EPS) suggests significant upside, surpassing Wall Street’s highest target.” Not sure what DeepSeek’s “secret” model is, but it says it expects 82.82% upside to $248 per share by December 2025.
Nvidia could get there if it continues to beat earnings estimates and the broader economy cooperates with the AI rally. The economy has done surprisingly well and companies have doubled down on AI. Plus, most AI companies are trading with a higher multiple than Nvidia right now, so DeepSeek isn’t being that outlandish.
In my opinion, it’s still unlikely since it would require hundreds of billions in new capital. Nvidia’s current valuation already prices in near-perfect execution.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is DeepSeek’s second pick. It is another AI play and DeepSeek thinks AMZN stock will deliver gains due to AWS having a $115 billion run rate and that “Amazon’s cloud dominance positions it to benefit from increased demand for AI.” It pointed out that Amazon is “Trading at 36x forward earnings (down from 44x).”
DeepSeek is less enthusiastic here and sees “25-30% upside” for Amazon. Not too big of a surge, but I think this is pretty realistic if current market conditions persist. Amazon has been on a pretty stable trajectory over the past few quarters and there isn’t anything I can see that could derail this. AWS remains the biggest cloud platform and Amazon also has its own bets in generative AI through its investments into Anthropic.
Wall Street currently has a consensus price target of $260.7 for the stock, which implies 14% upside potential. AWS’ growth accelerated to 19% year-over-year in Q4 2024, and if it can keep accelerating in Q1 and offset Amazon’s soft guidance, it could take AMZN stock even higher than 30% this year.
Fortinet (FTNT)
Fortinet (NASDAQ:FTNT) has delivered 57.5% gains over just the past year. It is another AI-related pick since the cybersecurity sector is now increasingly paired up with the broader AI sector as AI-driven cyberattacks and firewalls rise.
This is driving fresh demand for Fortinet, and it targets the Networking and SASE market. Much like AMZN, DeepSeek also sees a 25-30% upside potential for this stock this year. That said, the consensus price target of $103.72 implies 7.2% downside from here.
I still think that DeepSeek’s price target is realistic if you take current market conditions into account. Wall Street has continuously underestimated Fortinet’s growth and earnings. Q4 2024 revenue trounced estimates and grew 17% to $1.66 billion, along with solid operating margins at 39%. The 2025 outlook points to 13% year-over-year growth at the midpoint of $6.75 billion. Fortinet has also exceeded the “Rule of 45” (revenue growth + free cash flow margin) for the fifth consecutive year.
— Omor Ibne Ehsan
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Source: Money Morning